Completion deadline

Under the Standard Conditions of Sale (Fifth Edition, as for all previous editions), if the completion money is received by the seller’s conveyancer after 2.00pm, the buyer is liable to pay interest covering the period until the next working day.  This does not stop completion taking place after 2.00pm, but it does mean that the buyer has to pay interest.  As a shorthand, however, I refer to this as the “completion deadline” and to “late completion”.

Some conveyancers, knowing they needed to meet that deadline on their client’s own purchase, would try to bring forward the deadline on their client’s linked sale. While this is understandable, it can become farcical: in a long chain of transactions, if each seller’s conveyancer tries to bring forward the completion deadline, the first buyer could end up having to complete before the banks open! (In all seriousness, often the first buyer’s conveyancer will send the funds to the first seller’s conveyancer the day before, so that there is no delay in starting the series of funds transmissions on the day of completion, but the point is still valid: progressively bringing forward the completion deadline is not a real solution.)

Unfortunately, the latest standard form of contract encourages this: while in all other areas, the Law Society frowns on variations to the Standard Conditions, when it comes to the completion deadline they actively encourage it, by adding a Special Condition virtually inviting the seller’s conveyancer to specify an earlier completion deadline than that specified in the Standard Conditions.

The truth of the matter is that, in a long chain, it is quite likely that at some point someone will miss the deadline. In my view, that is a consequence of the “chain gang” system of conveyancing in this country, and something that buyer’s need to be warned about: there is a risk of having to pay interest for late completion if the banks don’t get the money through on time.

This risk can be minimised by avoiding busy days (Fridays, especially before bank holiday weekends, for instance), to give the banking system the best chance of getting the funds through in time.

Does anyone disagree?