Stage 9: Completion

Question 1

what are the stages of completion?

Answer 1

1. Buyer’s solicitor sends PP to seller’s solicitor in accordance with contract (i.e. SCPC must be electronic). Seller’s solicitor will also releases deposit.
2. Once received, the seller dates TR1 and hands/sends over any documents
3. Once the TR1 is dated, the lender’s solicitor will date the mortgage deed.

Question 2

when does legal title pass with reg land?

Answer 2

legal title does not pass until the buyer is registered at HMLR

Question 3

when does legal title pass with unreg land?

Answer 3

legal title passes on completion

Question 4

how can completion take place?

Answer 4

Completion takes place in person or by post

Question 5

what is in place for completion by post?

Answer 5

law society protocol

Question 6

what does the law society protocol on post completion provide?

Answer 6

o Seller’s solicitor acts as the buyer’s solicitor at no cost to the buyer. The buyer’s solicitor then gives them instructions as if they were in person.
o There is an implied undertaking to carry out buyer’s solicitor’s instructions
o The seller’s solicitor will confirm to the buyer once complete and the documents are sent by 1st class post or DX.

Question 7

what are the remedies for delayed completion?

Answer 7

1. contractual compensation
2. common law damages
3. rescission

Question 8

what do the SC/SCPC provide in terms of delay?

Answer 8

• SC/SCPC provides that ‘time is not of the essence unless notice is served’

Question 9

what does ‘time is not of the essence unless notice is served’ mean?

Answer 9

o This means there is no immediate right to terminate or rescind the contract if a party is delayed until they have served a notice

Question 10

re: contractual compensation

what is the position under SC?

Answer 10

the buyer and seller can be asked to pay compensation

Question 11

re: contractual compensation

what is the position under SCPC?

Answer 11

only the buyer can be required to pay the compensation

Question 12

re: contractual compensation

how is this calculated?

Answer 12

• Compensation is calculated using the contract rate specified in the contract and calculated at a daily rate. If both parties default those days are ignored.

Question 13

re: contractual compensation

what is the calculation?

Answer 13

o Purchase price - deposit paid (if the defaulting party is the buyer) x contract rate / 365 x no. days of delay = contractual compensation

Question 14

re: common law damages

how are these damages assessed?

Answer 14

• i.e. damages for breach of contract assessed using Hadley v Baxendale i.e.:
  o Putting claim in the position had the contract been properly performed
  o Reasonably foreseeable consequential loss is recoverable i.e. wasted legal costs, storage costs, renting

Question 15

re: common law damages

what are the Haldey v Baxendale rules?

Answer 15

o Putting claim in the position had the contract been properly performed
o Reasonably foreseeable consequential loss is recoverable i.e. wasted legal costs, storage costs, renting

Question 16

re: common law damages

what is the position in terms of common law damages and compensation?

Answer 16

• Can claim contractual compensation and common law damages but the sum is deducted from the award.

Question 17

re: notice to complete

when does this apply?

Answer 17

• Applies to SC/SCPC (otherwise would need to be specifically drafted in)

Question 18

re: notice to complete

when can this be served?

Answer 18

• NTC can only be served after the completion date.

Question 19

re: notice to complete

what is the effect?

Answer 19

• Once served, completion must take place within 10 working days

Question 20

re: notice to complete

what happens if the served party doesn’t comply?

Answer 20

• If the defaulting party fails, the innocent party can rescind the contract & claim damages

Question 21

re: rescission

what do the SC/SCPC say regarding this?

Answer 21

SC/SCPC provides the contract can be rescinded where:
o Failure to comply with notice to complete
o Misrepresentation by seller in a plan, contract statement or negotiations and:
 There has been fraud or recklessness; or
 The buyer would be obliged to accept a substantially different property from what was expected

Question 22

re: rescission

what is the effect of rescission where the buyer is the defaulting party?

Answer 22

seller can forfeit (i.e. keep) the deposit

Question 23

re: rescission

what is the effect of rescission where the seller is the defaulting party?

Answer 23

seller must repay the deposit

Question 24

re: rescission

what is this position re rescission and other remedies?

Answer 24

damages can also be claimed

Question 25

when is rescission allowed for misrepresentation under SC/SCPC?

Answer 25

Misrepresentation by seller in a plan, contract statement or negotiations and:  There has been fraud or recklessness; or  The buyer would be obliged to accept a substantially different property from what was expected