What happens if I do not complete my purchase on time?

If you delay completion as a buyer after exchange of contracts, the consequences can be serious and costly. Once contracts have been exchanged, it is legally binding. This means that the buyer is contractually obliged to complete the purchase on the agreed completion date. Failing to do so constitutes a breach of contract.

Here is what can happen if you delay completion:

• Daily Interest Charges

If you do not complete on the agreed completion date, the seller’s solicitor will usually serve a Notice to Complete which gives you 10 working days to complete. During this period, you may have to pay contractual interest (called “daily interest”) on the outstanding balance of the purchase price. This rate is set in the contract and is often 4% above the Bank of England base rate.

• Forfeiture of Deposit

If you fail to complete within the 10-day notice period, the seller can rescind the contract and keep your deposit with accrued interest.

• Seller’s Losses

The seller may take legal action against you to recover additional financial losses they have suffered as a result of breach of contract. This could include costs of re-selling the property, loss in sale value if prices decrease, legal fees and storage or accommodation costs.

• Mortgage Complications

If you are purchasing with mortgage finance, you may risk the mortgage offer expiring and therefore cause further delays or even prevent completion altogether.

Sometimes delays are due to genuine problems (e.g. bank transfer delays, solicitor errors etc.). In those cases, the seller may grant a short extension informally to allow for completion. However, this is entirely at the seller’s discretion and not guaranteed. Delaying completion as a buyer is a breach of contract unless agreed by both parties in writing. If you foresee a delay, please inform your solicitor immediately so they can negotiate with the seller and potentially avoid penalties.

This article is complied by Asia Gurung – Legal Assistant

Please call our team on 01271 443888 or email info@wollens.co.uk if you need support.