Protection against non-vacant possession on completion

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  • jeffrey
    replied
    The penalties (for V's failure to complete) are usually set out in the Contract, either in:
    a. the Standard Conditions of Sale implied into it; or
    b. the special terms expressly typed into it.

    V can be made to pay:
    a. interest at 4 percentage points above a reference Bank's base rate;
    b. your legal fees for having to serve the Notice;
    c. damages to compensate for your loss;
    etc.

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  • abygrave
    replied
    Non-vacant possession on completion

    Excellent.

    Jeffrey, you have put my mind at rest. Will not worry about early exchange then, as long as correct wording is in the contract for the Vendor to ensure vacant possession on completion. Will check contract carefully to ensure it is in there as requested.

    thank you


    Annie

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  • jeffrey
    replied
    1. Exchange is not the focus. Completion is.
    2. V will contract to give vacant possession on completion. If V exchanges on that basis, but T is still there on completion, the problem is V's (not yours)- you simply refuse to complete as you're ready/willing/able to complete but V isn't.
    3. Your solicitor would then serve on V a Notice to Complete. There are dire penalties if V fails to comply.
    4. No point getting a letter from T. It's not enforceable no matter what it says.

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  • Protection against non-vacant possession on completion

    Hi fellow Landlords and investors
    my partner and I are buying a property that currently has tenants in it. We want to live in it.

    When we viewed there appeared to be more than 4 people living there although the vendor says she only let to 4 tenants (and only 4 are on the AST). These tenants have been served the Section 21 notice, correctly as far as we can see, 2 months before the end of the tenancy which ends on 17th June. We were going to exchange and complete on 20th June but now the vendor is pushing for an early exchange or she will pull out of the sale. We really didn't want to exchange and be bound to the purchase before the tenants had left but we do want the property and so will need to compromise.

    Anyone know the best ways of protecting oneself from possible non-vacant possession on a purchase? I have asked my solicitor to add to the contract that the vendor and her agent have to physically check the property is vacant on the day of completion, before we will allow completion to occur. I'm going there myself to check with them.

    I've also asked my solicitor to get the tenants to sign a letter, before exchange of contracts, stating they 'have no interest in the property'. Our solicitor reckons the letter is overcautious and doesn't seem to be bothered enough to do it (guess who won't be getting our business again?)

    I don't know what the law says about this kind of situation. What would be the legal position if
    (a) we exchanged on the property, then weren't willing to complete because there was no vacant possession?
    (b) completed and then had to get someone out who had previously been a contracted tenant?
    (c) completed and then had to get someone out who had not previously been on the AST but had been living there anyway?



    All advice appreciated

    Annie B

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