COMPLETION (STAGE 5)

Question 1

4

Definition of Completion

Answer 1

1. Completion is the day that the buyer’s solicitor sends the balance of the purchase money due to the seller to complete the matter.
2. In practice, the money is sent to the seller’s solic-itor’s client account. The date and time of completion will be specifed in the contract.
3. Unless amended in the contract’s special conditions, completion must take place by 2pm.
4. Com-pletion is also the day on which the sellers move out of the property that they are selling and, usually, the buyer collects the keys from the estate agent and moves in

Question 2

METHODS OF COMPLETION

Answer 2

1. Personal Attendance
   If the parties are completing by personal attendance,** the buyer’s solicitor attends the seller’s solicitors’ offices in per-son**. The method of payment is normally a banker’s draft and at that meeting, the buyer’s solicitor takes physical posses-sion of the deeds. This method is rare in practice.
2. By Agent
   If the parties are completing by agent, the buyer’s solicitor appoints a local firm to attend to completion at the seller’s solicitor’s office. This method is also rare in practice.
3. By Post (Most Common)
   This is the usual method of completion. The seller’s solic-tor acts as the buyer’s agent upon completion and** posts all relevant deeds and documents to the buyer after completion **has taken place.

Exam Tip
Do not confuse the above methods of completion with the methods of exchange (the 3 Ps – person, post, and phone). It is not possible to complete by phone (al-though the solicitors will speak on the phone to confirm completion and release of the keys, this is not the point at which completion takes place and is thus not a ‘meth-od’ of completion).

Question 3

Code for Completion by Post

Answer 3

1. The Law Society established a Code for Completion by Post that may be adopted by solicitors.
2. Do not confuse the Code for Completion by Post with the formulae for exchange. The Code for Completion by Post sets out the procedures that enable the matter to complete. The formulae for exchange give the process of telephone exchange some structure and certainty.

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Question 4

5

Key Steps of Code for Completion by Post

Answer 4

1. Parties must agree in advance to adopt it. However, as previously noted, the Protocol implies the use of the Code for Completion by Post unless the solicitors agree otherwise.
2. The seller’s solicitor gives a warranty that they act for the true seller of the property and the buyer’s solici-tor is entitled to rely on this warranty (promise).
3. The seller’s solicitor must confirm in writing which mortgages are to be redeemed on completion
4. The completion monies will be sent by a bank trans-fer of cash.
5. The buyer’s solicitor must provide the seller’s solicitor with a list of those deeds/documents to be marked as ‘examined’

*If they will be unable to comply with the Code, the seller’s solicitor must provide a statement to this effect to the buyer’s solicitor before 4pm on the day before completion.

*The seller’s solicitor must consider the undertaking to discharge mortgages carefully and list only those that they can discharge.

*The seller’s solicitor must agree to complete the transfer documents upon receipt of the sum required to complete. The solicitor must also agree to** confirm the date and time of completion to the buyer’s solicitor** and to whomever holds the keys (such as an estate agent). This confirmation must be given by telephone, fax, or email as soon as possible after completion. The seller’s solicitor must also agree to send** the executed transfer document (typically a TR1)** and any other relevant documents to the buyer’s solicitor. These documents must be sent by first class post or document exchange as soon as possible, but in no event later than the end of the working day following completion.

*Once deeds are posted to the buyer’s solicitor, they are held at the risk of the buyer.

Question 5

3

EFFECT OF COMPLETION

Answer 5

1. Passing of Title
   The efect of completion—when title passes—depends on whether the land is registered or unregistered.** If the land is unregistered, title passes on completion. If the land is regis-tered, title passes when the purchaser becomes registered **at the Land Registry.
2. Merger
   On completion, the contract merges with the purchase deed. This means that the buyer can no longer sue on contract terms, unless the contract states that any clauses will not merge on completion.
3. Non-Merger Clause
   Note, however, that the Standard Conditions of Sale contain a ‘non-merger clause’ that states that **completion will not cancel liability to perform any outstanding obligation under the contract **(for example, a contract term by the seller to give vacant possession). If the outstanding obligation is not performed, the buyer may still sue on this term under con-tract due to this clause.