A Seller Has Served Notice To Complete, What Can I Do?
Property transactions in the UK follow a specific procedure, and the buyer and seller must adhere to set deadlines. However, sometimes issues arise that delay the buyer’s purchase, resulting in the seller serving a ‘notice to complete’.
Receiving this notice can be concerning, especially if you don’t understand its consequences. Here, we explain such notices, their implications, and what buyers need to consider after receiving one.
As a firm, we don’t act in conveyancing matters; we’re specialist litigation solicitors. But we do often get involved in property transactions that have gone wrong. This can happen for many reasons, ranging from a change in circumstances to a purchase at auction where the legal pack was incomplete. On occasion, if/where a conveyancer hasn’t given thorough advice, our work can pivot into a professional negligence claim. If you have received a notice to complete and are uncertain what it means and what your options are, read on. If you are looking for litigation support and advice, contact Helix Law. Our property litigation team handle disputes nationally and will be happy to assist you.
What Is a Notice to Complete?
A notice to complete is a legal document sent by the seller to the property’s buyer requiring them to finalise the transaction within a specified timeframe. It’s sent when the buyer fails to execute the purchase by the agreed contract date.
Before completion, the parties exchange contracts and create a mutual legal obligation to finalise the sale by the stated date. If the buyer doesn’t adhere to this deadline, the seller can serve a formal document, usually giving them 10 days to comply with their obligations.
The document will also state the consequences of failing to do so, including the termination of the contract and the loss of the buyer’s deposit.
What Are the Implications of a Notice To Complete?
Receiving a notice typically indicates that “time is of the essence” regarding the contract. This means the buyer must comply with its requirements by the deadline to avoid potential legal and financial consequences.
Failure to execute the transaction by the stated date can result in:
- The buyer losing their deposit
- The seller seeking additional damages for further losses
- The buyer being liable for interest payments on the outstanding balance
- Termination of the contract, meaning the buyer loses the property (if time is of the essence)
- Legal proceedings for specific performance or additional losses.
If you receive a notice to complete, you should seek expert legal advice to protect yourself from financial loss and possible legal action.
What To Do Upon Receiving a Notice To Complete
Review the Document
The buyer should carefully review the terms to ensure they align with the existing contract. The notice may be invalid if the sender doesn’t draft it correctly, includes inaccurate dates, or fails to provide a reasonable time for completion. The timeframe is usually 10 days but may vary depending on the circumstances and the contract’s specific terms. Importantly, the notice will also be invalid if the seller themselves are not in a position to complete the sale at the time of serving the notice.
Seek Legal Advice
It’s highly recommended you seek legal advice if you receive a notice to complete. Speak to a solicitor who can assess the document’s validity and advise you on the next steps to protect your position. A legal professional can also communicate with the seller on your behalf to resolve matters.
Assess Your Ability to Complete
Unexpected issues can arise, and the buyer must determine whether they can proceed with the purchase by the required deadline. Various options may be available, which they should explore with their conveyancers to decide on the best course of action.
Speak to the Seller
You shouldn’t ignore the notice, as this usually worsens the situation. Maintaining open communication with the seller, whether directly or via solicitors, allows you to address issues sooner and more amicably. Sometimes, they will agree to a further extension, giving you more time to arrange completion.
Contact Your Lender
If your mortgage has issues and the release of funds is delayed, speak to your lender as soon as possible and explain your situation. You may be able to quickly resolve the problem by providing simple documentation. Either way, you must confirm that the funds will be available for release on the new completion date.
Consider Alternative Funding Options
Where the buyer’s mortgage financing falls through, they should explore alternatives to allow them to proceed. Options include securing a bridging loan, a personal loan, or borrowing from friends and family. If none of these are viable, the transaction will likely fail, and the buyer should consider how to minimise their losses.
Mitigate Losses
If you know you won’t be able to comply with the deadline, you should discuss your options with a solicitor. You can usually negotiate to settle matters outside court proceedings, saving time and money on legal fees.
What if You Can’t Complete on Time?
If you can’t meet the deadline, always communicate with the seller first and ask for a further extension. Some delays are unexpected or beyond the buyer’s control, and most parties will want to proceed with the transaction wherever possible.
You can also negotiate with the seller to reach a compromise. For example, they might agree to extend the deadline by a further 10 days if you agree to cover their costs for this period.
If you cannot comply due to an invalid document, you should raise this with the seller. This may give you additional time to assess your position and avoid the financial consequences. If you believe the seller is acting unreasonably, consult our specialist litigation solicitors regarding your legal position and the options available to you.
Frequently Asked Questions
What Makes a Notice To Complete Invalid?
A notice may be invalid if it doesn’t adhere to the contract terms or includes an unreasonable deadline. There are a number of requirements for this, including where the seller must serve the document correctly and mustn’t do so before the agreed completion date. The buyer may also challenge it if the seller can’t complete the transaction themselves.
Can a Notice To Complete Be Rescinded?
The buyer cannot generally withdraw a notice to complete, as it makes “time of the essence” regarding the property purchase and forces the buyer to take the necessary steps to execute the transaction. However, parties can negotiate the terms to avoid the consequences of any invalidity or failure to complete and mitigate losses.
Final Thoughts
Understanding your rights and legal obligations when receiving a notice to complete is vital to ensuring your transaction doesn’t fall through and that you mitigate losses. While the process can feel daunting, seeking expert legal advice and assessing your options allows you to find a resolution early and minimise costs.
If you’ve received a notice to complete and need advice on your legal position, the potential consequences of failing to complete, and the options available to you, our team of specialist solicitors are here to help. Contact Helix Law today for expert guidance.
