What happens on completion day?
• On completion day, the purchase monies (comprising the buyer’s own funds and any required mortgage) are transferred to the seller’s solicitor, at which point the transaction is completed.
• The seller is usually obliged to vacate the property by 1pm on the day and ownership transfers to the buyer but this time is not fixed unless stated in the contract.
What can cause delays on completion day?
The main cause of delay is usually the transfer of monies. If a mortgage is involved, the funds have to be sent by the lender to the buyer’s solicitor or conveyancer, who must then pass them straight on to the seller’s legal company.
Provided the lender makes the transfer first thing in the morning and the buyer’s solicitor or conveyancer attends to the onward transfer right away, completion can usually take place by 12 noon.
However, if the seller’s legal representative has not received the funds by 3pm, completion may not happen until the following day – although this use to be quite rare, it now happening all the time.
The other thing that can hamper the process is if a party in the chain has miscalculated the monies required to complete, which includes stamp duty and any agents’ fees plus VAT.
Last-minute transfers can mean the transaction doesn’t complete until later in the day.
From a logistical perspective, people not starting the removals process in good time can cause delays.
Sometimes the transaction has completed but a buyer is unable to move into their new home because the seller has not yet vacated it.
In this case, if costs are incurred, such as additional removals charges or there is the need for overnight accommodation, the seller can be pursued for costs.
These are good reasons why it is worth aiming for completion earlier in the week so there is still time to complete prior to the weekend, rather than relying on everything going well on a Friday.
What happens if completion doesn’t take place?
• If either party fails to complete on the contractually agreed date, they are in breach of contract and there are penalties.
Buyer fails to complete:
• They will be served with a notice to complete within ten working days (2 weeks) before contracts are rescinded.
• They are liable to pay interest to the seller on the amount of the purchase monies not sent through – normally calculated at 4% above the Bank of England Base Rate.
• If they do not complete within two weeks, the seller rescinds their contract and the buyer forfeits their deposit.
• The seller can resell their property to someone else and may pursue the buyer for losses incurred if they cannot achieve the same sale price.
Seller fails to complete:
• The buyer can rescind their contract, if it has not already been withdrawn by the seller.
• The seller must return the buyer’s deposit.
• The seller is liable for the buyer’s costs, such as legal, mortgage and survey fees.
What happens after completion?
For the seller and buyer, completion is mainly about physically moving house.
However, for their legal representatives, there are some key transactions that still need to be processed.
Collects the keys from the selling agent and begins to move in.
• Checks that all fixtures and fittings are present as agreed in the contract of sale and informs agent and/or solicitor if anything is out of order.
• Changes the locks.
• Notifies utility companies of new ownership & takes meter readings.
• Informs contacts of change of address.
• Transfers deposit to seller’s solicitor.
• Registers title deed of ownership with the Land Registry.
• Submit Stamp Duty Land Tax Return.
• Pays Stamp Duty Land Tax due to HMRC.
• Sends buyer the Title Information Document, Land Registry holds and an SDLT5 certificate as evidence that the Stamp Duty has been paid.
• Takes final meter readings.
• Vacates property (although they usually move out first thing in the morning, ready for completion).
• Hands a set of keys to estate agent, if not done so already.
• Redeems any mortgage on the property.
• Pays estate agent’s bill.
• Settles their own bill.
• Pays remaining balance over to seller.
The Advisory gives honest-to-goodness practical advice for todays house buyers and sellers. Just click on the link below for answers to all your house buying, selling or moving questions.
The key to your completion day running smoothly is effective planning.
• Put together a list of everything you need to do early in the process and start making arrangements as
soon as you know exchange is on the horizon.
• As Friday is the most popular day for completions, consider doing it on another day when legal companies, mortgage lenders and removals companies aren’t so busy.
• Give yourself and your removals company plenty of time to pack and consider paying for a night of storage so you’re not rushing to get everything out of the property on the morning of completion.
• The best option for everyone is to plan your move over two days so you do not pay for overnight storage. You pack and load the day before then finish the loading of your basic over night items the following morning which gives you the rest of the day to move into your property.
• If things are problematic you have the full day to get it sorted and you can tell your solicitor to send the money in plenty of time to complete on the day of the actual move.
• This is the normal system we employ on all distance removals which takes a lot of the stress out of the actual removal process and in most cases the keys are ready to collect as the other people have vacated the property and handed the keys to the estate agent.
• There is absolutely no reason why this system cannot be used for local removals.
• Set aside all your most valuable possessions – anything you want to keep with you on moving day, rather than leave to the removals company. Get these together early, so you don’t overlook anything and panic on the day.
• Keep a folder of all your important legal, financial and personal paperwork and make sure you’ve always got access to it, in case your solicitor or conveyancer, mortgage broker or insurance company need any information from you.
• Check your belongings are properly insured for removals, via your own content’s insurance and/or by the removals company’s insurance.
• Speak to the estate agent a few days before to make arrangements for collecting the keys. Some agents will offer to meet you at your new property, which can be a big help if going to their office would mean a big detour for you.
• If you have pets and/or young children, it might be a good idea to have them stay with friends or family on the day.
• Have a ‘Plan B’ with alternative accommodation in reserve, just in case anything goes wrong and you can’t move in that day.