Property: Delayed Completion

Question 1

When is completion considered delayed?

Answer 1

If purchase money is received after time in contract
- Under Standard Conditions this is 2pm

If after this time completion treated as taking place on next working day

Question 2

What remedies are available for delayed completion?

Answer 2

Always
- interest on full purchase and content price (minus deposit)
- Alternatively can take rental income in lieu of compensation (must notify other party)

If time is of the essence (specified)
- can cancel contract

Question 3

When is time of the essence for completion?

Answer 3

Not under standard conditions of sale
- must be added as special condition

Later by Notice to Complete

Question 4

When and how can rental income be taken instead after completion?

Answer 4

If property has a tenant and be taken instead of interest

Must notify defaulting party

Question 5

What is a notice to complete?

Answer 5

If time is not specified as of the essence

• used to make it of the essence and give option to terminate contract

Question 6

What are the requirements for giving notice to complete?

Answer 6

• completion must not have taken place yet
• Should make sure it is what your client wants
• innocent party must be ready, able and willing to complete

Question 7

Will having a mortgage on the sellers property prevent them being able to serve notice to complete?

Answer 7

No - does not make them unable to be ready, able and willing to complete

Question 8

What is the effect of notice to complete?

Answer 8

Gives other party 10 WORKING days running from day AFTER notice to complete

If buyer is in default then must provide full 10% deposit (if not already)

Question 9

Consequences of failure after notice to complete if Buyer is defaulting party?

Answer 9

Seller can
- rescind contract
- retain deposit
- resell property
- claim damages

Question 10

Consequences of failure after notice to complete if Seller is defaulting party?

Answer 10

Buyer can
- rescind contract
- reclaim deposit with interest
- claim damages

Question 11

What are remedies for breach contract before completion?

Answer 11

1. specific performance
   - from buyer
2. claim for damages
   - put them in position they would have been in had contract been honoured
3. rescission

Question 12

When can a party rescind contract before completion?

Answer 12

1. Failure of other party to comply with notice to complete
2. misrepresentation
3. landlord consent for assignment not acquired 2 days before completion (and was required)

Question 13

Under the standard conditions of sale when is rescission of contract allows for misrepresentation?

Answer 13

1. there was fraud or recklessness
2. Property would be substantial different to what innocent party expected
   - 40% smaller
   - is leasehold not freehold

Question 14

What remedies are available for breach after completion?

Answer 14

1. breach of title guarantee
   - for example if given full guarantee but there is superior title holder
   - Then can claim damages
2. misrepresentation
   - recind contract