Conveyancing confusion exchange vs completion and date!

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    Conveyancing confusion exchange vs completion and date!

    I can't get my head around the confusion I have.

    Buyer and seller agree to exchange contracts. No chain. I think at that point (under standard conditions) buyer has paid a 10% deposit which would be payable to the seller if the buyer withdraws.
    It is said that "once contracts are exchanged a completion date is set". The contract itself does not specify a completion date.

    But why would a buyer agree to a contract at a fixed price where there is no date specified at all (or even agreed in any way) prior to signing the contract - (especially acute with a stamp duty cliff pending in 2 weeks which might influence what price they would have paid).

    And if the buyer does pull out (say because it goes over that cliff) would the seller really be protected via that deposit (say for example if they have committed to an alternative tenancy agreement or have to pay the agent based on the contract). I presume that if the buyer can show that the seller lied to them during the conveyancing process the deposit would be lost, but under what other circumstances could buyer escape without penalty leaving the seller in the lurch).

    I'm being told that the above is just normal, and that the seller (me) is completely safe.

    #2
    Any standard contract prepared by a conveyancer is going to have a provision which states when completion takes place. The date will be inserted on exchange of contracts. If no date is inserted and the contract incorporates the Standard Conditions of Sale the completion date is 20 working days after exchange. If no date is inserted and the contract does not incorporate the Standard Conditions of Sale there is somewhere a rule which says what the completion date is, but I cannot find it by Googling.

    Comment


      #3
      Thank you Lawcruncher that is helpful.

      The contract I am asked to sign says it "incorporates the Standard Conditions of Sale (Fifth Edition - 2018 Revision)"

      It has a contract date field which is blank. So the assumption is that the parties solicitors will agree that an exchange of the contracts they each hold, but each party has already in fact sent off a signed contract.

      The process seems slightly cock-eyed to me. If the solicitor agrees to exchange the contract, the seller (or buyer) might not have agreed with the solicitor that they wish to enter into a contract, even though the solicitor has in their hand a contract which says that their client so agrees..... How could the client argue that they had not agreed to a contract they had signed.

      Nowhere in the communication with the solicitor does it say "I am handing over a signed contract, but that this is just for you to hold until I agree to the terms of that contract as yet unstated (relevant date, whether the other party plans to buy my washing machine, or how the service charge is to be split).

      Am I wrong in thinking that the whole process of law that dictates how these major transactions are managed needs a major re-think ---- or is it just an issue with the solicitors I am choosing.

      Likewise in every other aspect of law in which I have involved solicitors (and there are many) I am always in receipt of any correspondence sent in my name to a third party. In conveyancing this does not seem to apply. I am never sent copies of the exchange of communication in real time, and often not at all even if I ask for it. How do I know that my honest answers to buyer enquiries have been conveyed in a manner I would not wish to correct?

      Comment


        #4
        The system has worked quite well for I do not not how long, but it was in place when I started in the law 50 years ago! The system is set up for for the convenience of everyone. If we did not have the system of exchanging contracts then the parties would have to meet up and sign when both were ready. Imagine the logistical problems if there is a long chain. The system allows the parties to be ready to proceed but not does commit them until contracts are exchanged. When you sign a contract everything is agreed apart from the completion date. If the date were written in and then a different date agreed you would have to sign the amendment. A conveyancer acts in accordance with your instructions on the completion date and they apply until countermanded.

        As to the last paragraph, a solicitor should of course proceed as you instruct. In a conveyancing matter (or at least a routine one) it should not really be necessary for your solicitor to copy you in on everything. You have to let him get on with his job.

        Finally, a conveyancer is entitled to assume that another conveyancer is acting in accordance with his client's instructions. Without that, conveyancing would become near to impossible.

        Comment


          #5
          Originally posted by Lawcruncher View Post
          ...

          As to the last paragraph, a solicitor should of course proceed as you instruct. In a conveyancing matter (or at least a routine one) it should not really be necessary for your solicitor to copy you in on everything. You have to let him get on with his job.

          Finally, a conveyancer is entitled to assume that another conveyancer is acting in accordance with his client's instructions. Without that, conveyancing would become near to impossible.
          Thank you - the concept is clearer (though given the stakes it would still seem that for the instruction "to exchange" should be exceptionally clear and well documented).

          On the last part it does seem to me that in many transactions the exact nuances of the way in which a "problem" is conveyed is critical.

          If the seller reports to his solicitor that there has been a problem with the neighbour, that the neighbour throws stuff over the wall and has threatened with an axe, and chooses to convey the exact correspondence with the neighbour and the police in that regard, then that is exactly what the solicitor should convey. If the solicitor chooses to translate or abbreviate this somehow and more particularly if the seller doesn't even know until after the fact that any translation has taken place, this would seem to make everyone vulnerable. At the very least if there is ANY translation or abbreviation that should be discussed before it takes place.

          Comment


            #6
            Originally posted by AndrewDod View Post
            Thank you - the concept is clearer (though given the stakes it would still seem that for the instruction "to exchange" should be exceptionally clear and well documented).
            When I was ready to proceed I would always ring a client to confirm they were ready to exchange. If they said "yes" I went ahead. I would have regarded that as clear. I would have made a file note so the instructions were documented. Do you think something different should happen?

            There has to be at least some element of trust in a lawyer/client relationship.

            Originally posted by AndrewDod View Post
            On the last part it does seem to me that in many transactions the exact nuances of the way in which a "problem" is conveyed is critical.

            If the seller reports to his solicitor that there has been a problem with the neighbour, that the neighbour throws stuff over the wall and has threatened with an axe, and chooses to convey the exact correspondence with the neighbour and the police in that regard, then that is exactly what the solicitor should convey. If the solicitor chooses to translate or abbreviate this somehow and more particularly if the seller doesn't even know until after the fact that any translation has taken place, this would seem to make everyone vulnerable. At the very least if there is ANY translation or abbreviation that should be discussed before it takes place.
            Fortunately not too many matters are affected by serious problems with neighbours. When disclosing anything a lawyer must not respond in a way which leaves unsaid something significant he has been told. On the other hand, he is employed to be his client's mouthpiece and is entitled to phrase things better than his client might, but not to the extent of being misleading. When alerted to a problem the buyer's solicitor needs to be alert and do some probing if he thinks the response has been "carefully phrased".

            Comment


              #7
              Hi AndrewDod, no exchange can take place without a completion date. This can be either by way of a fixed completion date or by way of completion on notice, subject to the terms of a special condition drafted and agreed between the respective parties lawyers and incorporated in the contract (which is nothing to do with the Standard Conditions of Sale).

              You say "Buyer and Seller agree to exchange contracts"...............you don't say they HAVE exchanged. So if that is the case, then no completion date can be inserted until the exchange has been effected. You can agree several completion dates before exchange of contracts, but once you exchange, you can only fix one date, unless you complete by notice subject to a triggering event, eg. planning etc.

              Comment


                #8
                Originally posted by Lawcruncher View Post
                AIf no date is inserted and the contract does not incorporate the Standard Conditions of Sale there is somewhere a rule which says what the completion date is, but I cannot find it by Googling.
                I have now found something:

                "‘When the language of a contract does not expressly, or by necessary implication, fix any time for the performance of a contractual obligation, the law implies that it shall be performed within a reasonable time. The rule is of general application."

                Hick v Raymond and Reid: 1893

                That does not tell us exactly when completion will be, but it does tell us that a contract for the sale of land without a completion date is not void for uncertainty. I would propose 4 weeks after exchange of contracts as a reasonable time in the absence of any special factor.


                Comment


                  #9
                  Buyer and seller agree to exchange contracts.
                  That was the fundamental flaw when this thread was started.

                  Only if those parties were not legally represented would that be an accurate statement.

                  Once each party appoint a solicitor or a licensed conveyancer to act on their behalf, the decision to draft a contract that sets out the terms of the sale and purchase is in the hands of those legal professionals.

                  Once a draft contract is approved that is when it is sent for signing by the buyer and the seller, who send the signed contract to their legal representatives.

                  It is then that the buyer's solicitor will control the situation.
                  That solicitor will require the deposit to be paid by the client and will need to know the date when funds are available to complete the purchase.

                  Once he has that information that is when contracts can be exchanged and the completion date entered on each of the signed contracts sitting on the desk of the solicitors who communicate by telephone.

                  What I fail to understand is why the OP thinks that there is any other way that such matters should have proceeded?

                  Comment

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