An interesting range of answers, some of them on the right lines, some less so!
eisman wrote:I would question whether there has actually been 'late completion' for condition 7.2 to apply.
What seems to me to have happened is that completion took place at 1pm (assuming the balance of purchase consideration was paid then) and, from that point onward, the vendors were trespassing in the buyer's property.
No, the contract is for sale with vacant possession. It's therefore the other way round from your interpretation. Completion takes place not when the money arrives in the seller's solicitors' bank, but when the seller gives vacant possession, i.e. moves out.
In this case because the seller hadn't moved out by 2:00 pm completion had not taken place by the contractual time, so the seller is treated as being in default - condition 6.1.3.
In fact, considering the contract terms were prepared by eminent property lawyers the wording is remarkably sloppy. Although it provides that if the buyer is late in delivering the money completion is treated as having taken place the next working day there's no equivalent provision where the seller is late moving out. However, in practical terms they would also be treated as having delayed completion till the next working day.
Late completion triggers condition 7.2. This says that `automatic' compensation will be calculated as being the amount of interest that has become payable as a result of the default. The interest rate is `the contract rate', and this is defined at condition 1.1.1 (e) as the rate set by the Law Society. This is 4% p.a. above Barclays' base rate, so currently 7% p.a.
Condition 7.2.2 says that where it's the seller who's at fault interest is charged on the whole of the purchase price. So if the property is selling for £1m the interest is £70k p.a. or approximately £192 per day.
If the next day is a working day then the automatic compensation is just one day's interest. However, as most completions take place on a Friday this means that the provisions are rather more severe, as completion is not deemed to be just one day but three days late, giving rise to an interest charge of about £575.
So that's your starting point. However, it's important to understand that this is
not a mechanism to fix the amount of compensation payable. It's merely a starting point.
So in the OP's case assume that they had to pay the removal men £200, accommodation charges of £300, and £500 in additional legal charges, giving a total loss of £1,000. The seller is
automatically obliged to pay them £192, but the OP could then sue them for the additional £808.
Such a claim should be fairly straightforward, subject to the usual arguments on reasonableness - for example taking a suite at the Dorchester at £10k a night would not normally be allowed - and in practice if the OP wanted to make a claim it would probably be dealt with informally by negotiation.
Having said all that the 2:00pm is treated as a target more than a trigger. It's very often the case that the money doesn't arrive until well after that, particularly where there's a long chain. In many cases it doesn't even arrive until the next working day, which could well be a Monday.
However, conveyancers tend to take a pragmatic view, and if one of them tells the other it's on its way they will usually treat it as having been received, and release the keys, simply to avoid their clients going through the ordeal described by the OP.
In many cases the clients won't even know that completion was technically late, or that they could theoretically claim compensation, simply because their conveyancer takes the view that they've suffered no actual loss and that there is therefore no point rocking the boat (or more likely these days because the conveyancer doesn't even know that these rights exist). Whether this is a good or bad thing I will leave for others to decide!
