This article explains the importance of choosing the right completion date. It also explains the consequences of a delay in effecting completion.
The date of completion is discussed between the seller and the buyer before the exchange of contract. Such a date is relevant if the buyer’s purchase is dependent on the sale of another property. This date also becomes relevant to the seller who has to synchronise it with purchase of another property. Synchronising these dates is an important aspect of chain transactions and the conveyancing solicitor should take steps to ensure that this chain does not break. In residential transactions, completion date is fixed within a period of two weeks or less from the date of exchange of contract. There must be sufficient time between the exchange and completion so as to allow the transaction to be carried out. But if parties request the completion to take place immediately, some of the steps undertaken in the pre-completion stage can be done before the exchange of contract.
Standard conditions
Standard Conditions 6.1 and Standard Commercial Conditions 8.1 shall be applicable when an express agreement is not in place to fix a date of completion. This condition provides that completion shall take place on the twentieth working day after exchange. However, it is be noted that time is not an absolute necessity for the completion date. Thus, it is just a contractual warranty and not a condition. Thus, although the aggrieved party is allowed to make a claim for compensation, this claim would not entitle the aggrieved party to withdraw from the contract.
A delay in completion usually occurs due to reasons beyond the control of the parties concerned. If time is not to become an essence of the completion date, it should be made clear in the contract by adding the term ‘as to which time shall be of essence’ along with the completion date in the contract.
Photo courtesy: Robyn Gallant
