The vast majority of the time in a residential sale and purchase, a completion (moving) date is set when all parties commit to exchanging contracts.
I am often asked to give practical examples as to any circumstances when a completion doesn’t take place after contracts have been exchanged.
Regrettably, there are a number of reasons why someone would be unable to fulfil their contractual obligations and have to delay completion or withdraw completely.
Please be assured that it rarely happens as people do tend to be fully committed, otherwise they would have withdrawn before exchanging contracts. However, there is a risk that something can happen which is outside the control of the buyers, sellers and their respective conveyancers.
For buyers, it might be a financial reason, such as their mortgage money not arriving on time or a banking/technical issue which can prevent money from being transferred to where it needs to go.
There have been high-profile situations which have been documented on the news involving well-known banks which have suffered issues owing to adverse weather conditions, computer glitches and the financial crisis of 2007.
The contract provides for mechanisms to financially compensate those affected who weren’t at fault, but the reality is an unwanted delay to the moving date. It is essential that those legally represented are advised as to the specific circumstances as these are likely to be different every time and would most likely cause delay.
For sellers, there may be an accident or health issue; or more recently, even a lottery win, as seen by the actions of the couple who won the EuroMillions lottery – reported on the BBC.
There is usually no reason to believe that a sale or purchase won’t go through, but there are a few illustrations of when life can get in the way of a contract. Therefore, it is essential to have good legal representation in case the worst does happen.