Time is of importance when a residential transaction is dependent on receipt of money from the related sale transaction. The following article explains the significance of time in a transaction.
A conveyancing solicitor should make sure that all arrangements are made for sale to be completed before the purchase of the client’s subsequent land. There should be sufficient interval between the two, so that the money received from one transaction can be used for the subsequent transaction. Ideally, a minimum of two hours is allowed for such transactions. Arranging these is easier said than done, especially when it relates to chain transactions. Such arrangements are complex because of the fact that those at the bottom of the chain must complete the transaction first so that the money is available for those in the upward chain. Also, banks do not accept instructions for same day transmission of funds later than 3pm. Thus, they are usually completed early in the morning to allow subsequent transactions to take place within the same day. However, it is difficult to arrange for completion before 10 am unless the money is deposited with the seller on the previous day.
Even when the sale is not related to any other transaction, the seller should ensure that there is sufficient time for completion thereby allowing sufficient time for proceeds of the sale to be banked on the same day. If this is not done and the seller is required to arrange for the discharge of his mortgage, he loses interest on his money. Thus, a completion time later than 2.30 pm is not advisable by conveyancing solicitors.
Standard conditions 6.1.2 (SCPC 8.1.2)
According to these conditions, if completion does not take place by 2 pm on the day of completion, an interest is payable to the other party as the completion is deemed to take place on the next day. Not undertaking a completion before 2 pm is considered late completion thereby invoking provisions mentioned under SC7.2 and SCPC 9.3. According to these conditions, compensation is required to be paid at an interest rate mentioned in the contract.
However, SC 6.1.2 and SCPC 8.1.2 are not applicable when the sale is with vacant possession and the seller has not yet vacated the property (by 2 pm) on completion date. They are only concerned with payment for compensation for late completion and not make it a provision in the contract that completion should take place within a stipulated period. But if it is desired that the completion should be effected within a specified time on completion day, a special condition to this effect must be added in the contract.
Photo courtesy: Garry Knight
