Post Completion Conveyancing Disputes and How to Avoid Them

Completion is the date agreed by both parties in the contract when the buyer of the property pays the balance of the purchase price and moves into the new home. It is an important conveyancing milestone.  For the buyer and the seller it is the most important day of the transaction but for the conveyancing solicitor this is by no means the end of the transaction.

Most completions take place by post.  As soon as the funds have been received by the seller’s conveyancing solicitor, the relevant documents must be sent to the buyer’s lawyer. With registered land, title does not pass to the buyer on the day of completion but rather as soon as the registration can take place at the Land Registry.

To facilitate registration, the buyer’s lawyer has to gather together the necessary documents and before this the following processes need to take place: The seller’s lawyer must redeem the mortgage and receive confirmation from the lender that funds have been received, Stamp Duty Land Tax must be paid by the buyer’s lawyer and a certificate received, the transfer deed must be received from the seller’s solicitor.

The Land Registry will not register the property in the buyer’s name without these and other documents.

10 most common completion and post completion disputes

Funds are not received by the date of completion

The transaction may be part of a chain and there may be a problem lower down the chain which may affect more than one transaction.  If funds are not received it is important for the two lawyers to speak to determine whether or not this problem can be resolved quickly and amicably.

Any delay is breach of contract and remedies are subject to the contract that has been exchanged. Unless the relevant standard condition has been amended, time will not be of the essence and so the contract cannot just be repudiated by the party in default.

Normally, each party has the right to serve a Notice to Complete but as soon as this has been served time becomes of the essence and completion will have to take place by a specified date. The party who serves this notice must ensure that they are able to complete within this time frame ( normally ten working days ). Failure to complete by the buyer within the time frame will mean that they lose their deposit and the seller may be able to claim damages. The seller’s failure to complete will mean that the deposit is returned to the buyer with any interest earned. The buyer may have other remedies available to him.

The seller’s mortgage has not been discharged

The buyer’s conveyancing solicitor needs confirmation that the mortgage has been discharged in order to register the property. Failure to do so is breach of contract.

Stamp Duty Land Tax has not been paid

The buyer’s lawyer has 30 days from completion to pay this before a fine becomes payable.

The Notice to the Landlord has not been served

On completion of leasehold transaction, the lease may state that a notice of assignment of lease has to be sent to the landlord or management company with a fee.

The Priority Search has not been kept up to date and there is a new entry on the register

To protect the buyer and the lender during the transaction, his solicitor will apply for and maintain a search of priority of the land. At the start of the transaction office copy entries are printed detailing rights and incumbrances. The register can be changed without the knowledge of the buyer’s solicitor so it is important for a priority search to be applied from the date of the office copy entries. This will give the buyer and lender priority over any incumbrances registered during the protection period.  Failure to keep this up to date until registration could have potentially serious consequences.

The Fixtures and Fittings that the Seller agreed to leave are not in the property

In the early stages of the transaction, the seller completes a list of fixtures and fittings which is usually annexed to and forms part of the contract. If the items listed have not been left, it is important that the buyer’s lawyer raises this with the seller’s lawyer as it may be a simple mistake. This is a breach of contract and the buyer’s solicitor will have to decide how to act taking into account the value of the items.

The property is not vacant – someone is refusing to leave

It is important before contracts are exchanged for the buyer’s lawyer to establish if there are any adults who are not owners living in the property. It might be that this person has an equitable interest in the property. Therefore written confirmation that they agree to the sale must be received prior to exchange of contracts.
Also the buyer’s lawyer must be aware of any rights of a spouse under Family Law Act 1996.

The seller’s have left lots of extra items and rubbish in the property

If the contract states that on completion vacant possession is to be given and the property is not empty, the contract has been breached. Again it is worth trying to resolve this amicably and if not, to decide whether it is financially worthwhile to take incur more legal expense.

The boiler isn’t working

It is usual for the buyer’s lawyer before exchange to enquire whether the heating system is in good working order and usual for the response to be that it is working at that time but no warranty is given. Before contracts are signed it is recommended that a surveyor checks for problems so that you can budget accordingly.

The seller has made physical changes to the property

According to the standard conditions of sale, the buyer accepts the property in the physical state it is in at the time of exchange of contract unless the seller is building or converting it. The solicitor must deal with this breach of contract according to the remedies set out in the conditions of sale and contract.

The best way to prevent these problems from arising is to use an experienced conveyancing lawyer who anticipates these and other scenarios and works with you and the seller’s solicitor to avoid them.