When Things Go Wrong on the Day of Completion...

Let’s set the scene. You are all ready to complete, you are anxiously waiting for your keys, you’ve got the champagne waiting, everything on your sale has been packed up and the only thing to go into the removal lorry is perhaps your kettle, a couple of cups and a bed and the excitement is beyond belief.

Could anything possibly now go wrong?

There are two scenarios to consider here.?Firstly, if you have not exchanged you will not be as affected because there is no contractual commitment to move.?Still frustrating and upsetting, I know, but the contractual commitment is not attached.

However, consider the situation where you have exchanged contracts and the day for completion has arrived...

The most usual situation for a delayed or lack of completion is a mortgage down the chain somewhere – that has not arrived, whether it’s yours or somebody in the chain below.?

We’re anxiously waiting for the money to come through the chain (this can take a good few hours as on the day of completion we are very much in the hands of the banking system). Should anything go wrong on the banking system then we won’t be able to move you into your house and get keys released. ?But that’s another story.

Your removal people will be pressing you as they may have to move onto their next job and you will be chasing us to let us know when you can move into your house. You will also be asking us when we can release keys on your sale so that your buyer can move in because they may be outside waiting to move in.

However for this scenario let’s consider that its your buyer’s mortgage that hasn’t yet arrived with their firm of solicitors.?

It now gets to 2pm and still no money has arrived and the buyer’s solicitors now confirm to us that they haven’t got mortgage monies and they haven’t got an explanation from their lender.

A lot of lenders these days are very difficult to get hold of and have a two hour call waiting list!?

People are now getting very anxious and want to know are they going to be moving, what do they tell the removal men??When can they get their keys??When they can let the buyer have the keys? We don’t have answers for this until we have received your buyer’s money into our bank account.?

The time is now 3.30pm and we still don’t have any money and the buyer’s solicitors still don’t have any idea of why they have no money from their lender.? Because of the emotions involved people forget about the common sense scenario and desperately want to move - however there are repercussions of doing that.

We’ve got lenders involved and you don’t have a buy to let mortgage so you can’t let somebody else come into your house without repaying your mortgage.?You can't repay your mortgage until your house is sold, i.e we have the sale money.

On your onward transaction you’ve got no money to send to the seller’s solicitors so you can’t buy the house that you’re going to live in but you do need to either stay at your house or move into the purchase property.?

You have an existing mortgage on your own property, which means you can’t let anybody in without redeeming that mortgage unless you change it to a buy to let mortgage (this isn’t going to happen in a day and especially not on the day given completion).

If the seller has a mortgage then again they can’t let you into the property without changing that mortgage to a buy to let mortgage and indeed getting the lender’s consent to allow you into the property.

Lenders in this situation are unlikely to a) give the consent and b) if they do give the consent verbally, they are unlikely to give it to you in writing, on that day and especially in the timeframe allocated.?Now we have to consider what if the money doesn’t arrive.

Possession is nine tenths of the law as is commonly known; ?if you let your buyer in and the seller lets you in so that the chain and the transaction can move and everybody moves their goods in so that the removal men can make their way to their next appointment then you’ve created what is known as a licence allowing people to reside in the property.?

That is all well and good if the money is in the buyer’s solicitor’s account and they provide an undertaking to us to send the money or confirm that they’ve put the money in the system already so that it will be in our account first thing the next working day (if you are completing on a Friday the next working day would be the Monday).

This is the more likely scenario to allow access in the chain.

However, if the buyer’s solicitors haven’t yet got the money in their hands then we have to start asking why.

It is possible that the mortgage has been withdrawn and nobody has let the buyer or their solicitors know (because lenders often don’t do this) until you apply for the mortgage advance.

It could be that the buyer has gone on a spending spree doing "Buy Now, Pay Later" and had a very small loan to value.?In this case your buyer’s mortgage affordability has changed; the lender will usually do a check before completion to see if the buyer’s mortgage circumstances have changed.

If a Buy Now Pay Later scheme has been set up then this may affect the ability to repay the mortgage.?

In that situation the money won’t be coming at all and everybody may well have moved into their house and you now have the issue of removing them which can only really be done under a Court Order and this is going to take time.

Your lender will want your mortgage to be repaid instantly because you don’t have a buy to let mortgage, yet you have let someone else move in.

The matter has now become highly litigious

The saga continues...

I am happy to guide you through the complexities of conveyancing, so please do get in touch.?

Angie Dooling | Consultant Residential Conveyancer

?? adooling@setfords.co.uk

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