How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Thomas Your Own Question
Thomas
Thomas, Solicitor
Category: Property Law
Satisfied Customers: 7724
Experience:  UK solicitor holding an England and Wales practising Certificate.
28732269
Type Your Property Law Question Here...
Thomas is online now

In April 2017 I put my name down to buy a flat from a

This answer was rated:

In April 2017 I put my name down to buy a flat from a housing association through Help to aBuy. I instructed the solicitor the association recommended. I used a mortgage broker to obtain the mortgage offer. With three professionals to guide me I thought nothing could go wrong.
Contracts were exchanged 30.08.17. I was later told that that would exempt me from Stamp Duty. I heard nothing else from the solicitor or broker.
I regularly phoned or emailed the housing association as the works were running late and I was not being kept informed.
Eventually the building was to be signed of to the housing association at the beginning of February.
On Friday 9th February my solicitor rang to say completion was to be 10 days later on 23.02.18.
A short while later she phoned again, telling me that as my mortgage offer had expired at the end of December I had to apply for an extension or face a fine of approximately £27000, is approx 10 per cent of the purchase price.
This was a tremendous shock. I had assumed as contracts had been exchanged and neither the solicitor, the mortgage broker or the housing association had advised me otherwise, the offer had been taken up and nothing needed to be done.
I asked the housing association if they could extend the completion date, but they’ve declined.
The mortgage broker is trying to fast track me a new mortgage for completion on the 23rd. It was too late to have the original extended.
If this doesn’t happen in time, what will my position and options be?
Thank you

Hi

Thanks for your question. I will try to help.

Firstly, you should ask your solicitor what the consequences of not completing on the contractual completion date will be. The contract which you exchanged will govern that.

Usually a contract will allow the seller to serve a notice to complete on you (via your solicitor). This notice would usually give you 10 working days to complete. This would allow you further time within which to arrange a new mortgage offer and then complete. So, if the contract provides for this then you would be able to complete within the time period specified in the notice to complete when it is eventually served on you by the seller’s solicitors. However, there will likely be some extra legal fees of the seller’s solicitor to pay, together with interest on the balance of purchase monies. However, these should not be particularly large.

As to the expiry of the mortgage offer, I would normally expect the solicitor to advise you of the expiry date of your mortgage at some point prior to exchange and to let you know that if completion is to occur after the expiry date that you should arrange a new mortgage to replace the old one. If they have done this in correspondence to you then you would likely not have a claim against the solicitor. If they have not done this then you may potentially have a claim against them if you are not subsequently able to complete.

In the first instance, I would focus your efforts on getting the new mortgage offer, but also to contact your solicitor to get them to assure you that once the mortgage offer comes in that you will be able to complete without any further issues. I would ask them to reassure you that you have signed all the necessary documents (ie. Land Registry Transfer) they require to complete apart from the mortgage deed (which will be sent to the solicitor with the mortgage offer when it comes). I would also get them to check the validity of your searches, because it is possible that they may have expired by the time completion comes since they must be less than 6 months old at the time of completion. If they have expired then you should ask your solicitor whether search indemnity insurance is available in order to validate the old searches for the purpose of your new mortgage.

My goal is to provide you with a good service. If you feel you have received anything less, please reply back. Please remember to leave positive feedback using the stars at the top of the page.

Kind regards,

Tom

Customer: replied 6 months ago.
Thank you.
To be clear, is the 10 working days you specify in addition to the 10 days from 09/02/18 to 23/02/18?
Customer: replied 6 months ago.
A written answer will be fine, thanks

Hi,

If the property is a new build then then the contract will generall say that completion is "X" amount of days following a notice sent to your solicitor saying that the building is complete. If the contract specified "10" days then your solicitor would have then advised you once the completion date is establihsed. This is what I assume the solicitor was doing when they said that completion is on 23/02.

So, if this is the case then normally if you did not complete on 23/02 the seller would send a notice to complete, which would give you a further 10 days from 23/02 within which to complete.

This is what I expect has happened and I expect you will have 10 days from 23/02 to complete but - importantly - I do not know the details of the contract you have signed and only your solicitor will know this. This is why it is essential that you contact your solicitor now to confirm that 23/02 is the contractual completion date and NOT the date specified in a notice to complete which has already been served on your solicitor.

Please remember to leave positive feedback using the stars at the top of the page.

Kind regards,

Tom

Thomas and other Property Law Specialists are ready to help you