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Property completion nightmares: who's to blame and what to do?

Apr 09, 2017
Very few established or busy removals companies will not have experienced the hassle and nightmare of a delayed property completion but some may not know why this happens and what, as a removals company, you should do to protect yourself.

It seems really bizarre that a legal system, which relies on certainty and precision, can result in a situation where after lunch, and possibly later, on the day of a property completion, sellers, buyers and removals people can be in no-man’s land as to what’s going on and whether they can start moving items into a new property. However, whilst not common, this situation is also far from rare. 

Problems and causes of delays on the day of completion/removals 

There can be several causes of delayed completion. Ranked in order of importance/increased risk they tend to be: 

  1. A long chain of transactions completing all on the same day and all being dependent on each other – a long chain inherently increases the risk that money won’t get up the chain smoothly/in time. 

  1. Banking system – banks will only ever confirm same day transfers which means a bank might receive funds from another bank at 10:00am but might not action a payment for an hour or longer. If there are a few linked transactions where banks don’t act quickly, it doesn’t take much to result in a problem, 

  1. Client disorganisation – clients often tend to blame lawyers but with many transactions, in addition to the mortgage advance, the client buyer will need to send some completion funds to their lawyers. If the amount does not arrive or is not cleared funds, this will mean delayed completion. 

  1. Solicitor inefficiency – with any chain of transactions, law firms who undertake conveyancing have the problem of having to check and recheck bank accounts numerous times on the day of completion to see if funds have arrived and to act rapidly once funds are received if they need to be used on an onward purchase. If checks on incoming funds aren’t regular or there is a delay in sending money, this can create havoc further up a chain. 

  1. The contract system – it is standard for contracts of sale of properties to provide that funds must be received by the buyer in full by 1:00pm. If there is any delay, the seller can technically insist on penalty monies being paid and a solicitor might serve a notice to complete which attracts an additional legal fee. Most solicitors and their selling clients allow a period of grace, but some don’t. The buyer or his/her/their solicitors might refuse to pay any additional fee which can create an impasse. There can also be problems if a buyer is waiting at a property and notices that a seller has not fully cleared the property out or has taken fixtures and fittings they said they would leave. 

If there are delays and funds have not been received by a seller, either at the top of the chain or even a seller below, by 3:30pm then no money will arrive that day as there is a cut- off point for money being sent. What happens then? 

In a worst-case scenario, where money has only gone so far up a chain, you can face a situation where completions may not happen and removals vans are loaded but can’t unload. This does happen very occasionally.  

More commonly, according to James Swede, specialist property lawyer with Darlingtons LLP, common sense will prevail. He says, “My law firm deals with upwards of 400 completions every year. Less than 5% involve a problem with completion and some form of comfort may be possible whereby solicitors can confirm to those further up the chain, via a series of undertakings, that money is in place but has just not arrived and that it will be sent without fail as soon as it arrives and/or that non-cancellable instructions to send the required amount have already been lodged with a bank. This often solves the problem but is not ideal and may require a lot of haggling and frantic e-mails after 3-30pm”. 

The above will usually mean that unloading can’t even start until late in an afternoon when removals people have been ready for many hours, expecting to have almost finished by late afternoon. 

In some cases, completion doesn’t happen until after the weekend, meaning removals companies have a headache as well as clients. 

What are the implications for removals companies? 

  • Get your contracts right – delays will cost your business money, staff costs and time spent waiting which may mean you are late on other jobs. Knowing that in some cases your clients won’t be able to allow you to unload or load should mean you think about contract clauses which protect you for those eventualities. 

  • Employment law – can you compel your staff to stay late, for example, if their normal hours are 9-5 but due to delay they can only start the main part of their job at 4:00pm and must work till 9:00pm to unload? If you can’t, where does this leave your customer and your reputation? 

  • Storage risk – in the unlikely event a completion doesn’t happen and you have a van loaded with expensive items, you may have to retain these items in your lorry over a weekend – are you insured for this? What happens if there is a theft or some other problem while you retain a customer’s possessions? 

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