Completion and settlement are the ultimate goals of property conveyancing. The parties involved will agree to a time for completion, within which the buyer should transfer whatever amount is outstanding for the full purchase price.
But what happens if you, as the buyer, are unable to do so? This will, of course, be in breach of your contract and the seller may choose to pursue any of the following courses.
Give an Extension Without Interest
The seller may give you an extension on the time for completion, which can be as long as 14 days. All these details will be highlighted in a notice to complete, a document which the property conveyancing solicitor acting for the seller will draft and serve you.
The terms of the extension, unless otherwise stated, are usually that you will forfeit the deposit and other monies paid so far if you don't pay at the end of the extension. The seller can also go to court regarding damages and losses. These damages include legal fees and the cost of cancelled removals. If you fail to honour this notice to complete, the seller will be free to forfeit your contract and initiate the property conveyancing process with another buyer.
Give an Extension With Interest
The seller may also charge you interest on the outstanding amount. You can always try to negotiate how much interest you will be required to pay. The shorter an extension time you will require, the better the interest rate you can negotiate for yourself.
If you are unable to pay after the agreed time, you can negotiate for a further extension. The seller may stick to the initial interest rate or go higher. Property conveyancing solicitors acting for both sides can deliberate further to find a rate that is agreeable to both the buyer and seller.
Avoiding it All
Unforeseen circumstances can force you into a position where you are unable to fulfil your obligation in the property conveyancing completion. However, with strategy and planning, you can reduce the risk of this happening. By so doing, you can avoid having to deal with the consequences highlighted in either option.
Speak to your mortgage lender at length before you agree to a completion date to ensure that you have the financing covered. Only after making sure that there won't be any obstacles to completion should you exchange contracts with the seller and agree to a completion date.
To learn more, reach out to a conveyancer near you.