Completion day and money transfers.
On completion day the buyer's solicitor sends to the seller's solicitor the balance of the money due on the agreed purchase price.
Once the money has been sent, your solicitor confirms recipt of the money and the seller's solicitor releases the keys to the buyer.
5.00pm is the cut off time for most solicitors to be able to complete because the CHAPS banking system closes down.
The CHAPS system opens at 6am each working day. Participants must be open to receive by 8am and must send by 10am.
CHAPS closes at 6pm for bank-to-bank payments. Customer payments must be submitted by 5.40pm. If both the seller and buyer's solicitor bank at the same bank then the buyer's solicitor can send over completion monies up until 5pm.
There are three simple steps you go through on the day of completion.
1. Buyer's solicitor receives the mortgage money from the lender and transfres the balance to complete from the buyer.
2. Buyer's solicitor sends the completion money to the seller.
3. The seller releases keys to the buyer directly or via the estate agent as a vacant possesion property.
If it is that simple why do so may things go wrong on completion day and what can i do if we do not complete?
You can choose to complete on any day the sellers and buyers agree to because it is your choice when you want to complete not the solicitors or the agents.
Why clients are told to move on Friday.
Most people are told to choose Friday as their completion day even though the cost of removals are higher and most removals companies are booked up.
The main reason for moving on Friday is financial.
If you choose a mid-week day to complete you are more likely pay less for the removals company and you are less likely to have problems when transferring the money outstanding for completion.
Reasons to not move on a Friday.
The biggest problem with completing on a Friday is failing to complete. If you do not complete on Friday you have to wait until Monday before you can do anything. Unfortunately you may have moved out of your house and you
may not be allowed to move into your new house.
This means you will have to find somewhere to stay, pay your removals company to put your belongings into store and then arrange redelivery once you have sorted everything out. This in turn means you may have to start legal proceedings against the breaching party to cover your extra costs over the weekend or until the completion has been finalised. You are paying for the removal twice because someone did not do their job correctly.
If the completion money is received by the seller's solicitors too late, they may not have enough time to redeem their mortgage on the property.
What happens if we are unable to complete.
In cases like this, it is common for the seller's solicitor to not complete and the buyer won't be given access to the property.
If this happens the seller's solicitor serves notice to complete on the buyer's solicitor and the buyer will be liable for the cost of the notice fee and any other costs incurred by the seller as set out under the exchange contract.
(removal costs, hotel costs, storage fees, redelivery from store, etc.)
Not completing on contracted completion day.
Completion should take place on the next working day which could be Monday
if you fail to complete on Friday. Not completing on Friday leaves you with no other option but to go into storage over the weekend then find a hotel or stay with friends and family until the problem has been resolved.
Whatever the reason is for not completing, (if either the buyer doesn't transfer the balance of the purchase money or the seller doesn't release the keys), the breaching party is at fault and will be liable for the costs for late completion. The breaching party is served a notice to complete by the other side’s solicitor and then has 2 weeks (10 working days) to complete before the contract is rescinded. The costs for failing to complete a purchase are considerable.
Collecting your house keys.
What time you collect your keys from the seller on completion will depend where you are in the chain and how on the ball your solicitor is. It can also depend on how ready the seller is to move out of the property.
You normally collect your keys from the selling estate agent after you complete, however you sometimes collect them directly from the sellers. You should speak to the estate agent to find out if they hold all the keys to the property and if not, confirm where the seller will be so you can collect the keys after they have been released.
Under the terms of the exchange contract, the seller normally has until 5pm to provide vacant possession of the property.
Most sellers want to complete quickly and are organised and ready for their removal and relocation.
Unfortunately some clients are not organised and they leave everything to the last minute to pack and move out of the property.
Once the seller’s solicitors have received the funds from your solicitor, the seller’s solicitor will contact your solicitor and also the estate agent to advise that keys can be released. You will then be able to go to the estate agents to collect the keys. If it is a private sale, you will need to make separate arrangements with the seller to collect the keys then you can move in. It is in your best interest not to hand over the keys until you have been told to by your solicitor.
If you have a lot of property to move either make arrangements with the buyer via your solicitor for a later time for the key exchange.
It is much better if you have the later time added to your contract so everyone in the chain or the buyers know exactly when and at what time you are exspected to be moving out of your house or leaving it as vacant possession.
When buying or selling a property, ‘vacant possession’ means that the property is empty on the day of completion. Therefore the sellers or tenants have moved out and removed all of their belongings, only leaving behind items that have been agreed with the buyer.