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Compensation for delay in closing sale?

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  • 04-04-2019 10:26pm
    #1
    ClaudeB
    Registered Users Posts: 2 ✭


    Hi,
    We are selling a property. We (and the buyer) signed contracts in late 2018. We wanted to close by end of year (for CGT reasons) but buyers solicitor said 'no can do'. No reason was given but our solicitor mentioned a date for closure in mid-January 2019. This new date came and went with no word from buyer. A 28-day completion notice was issued by our solicitor. This time too elapsed with no communication from other side. The 10% deposit was issued to us at our request and remains in our possession. Within days of the completion notice elapsing, the buyer's solicitor made contact to say they were now ready to close. No explanation was given for the delay. We agreed to this but asked for compensation for the additional expense we had incurred in interim (mortgage payments etc.) Buyer's side initially offered nominal compensation but has now said no compensation is owing and has threatened litigation if we do not proceed with sale as per terms of original contract. Does anyone have experience of this scenario and advice on where we stand legally as vendors in this situation? Thank you.
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    #2
    how.gareth
    Registered Users Posts: 1,150 ✭✭✭how.gareth


    ClaudeB wrote: »
    Hi,
    We are selling a property. We (and the buyer) signed contracts in late 2018. We wanted to close by end of year (for CGT reasons) but buyers solicitor said 'no can do'. No reason was given but our solicitor mentioned a date for closure in mid-January 2019. This new date came and went with no word from buyer. A 28-day completion notice was issued by our solicitor. This time too elapsed with no communication from other side. The 10% deposit was issued to us at our request and remains in our possession. Within days of the completion notice elapsing, the buyer's solicitor made contact to say they were now ready to close. No explanation was given for the delay. We agreed to this but asked for compensation for the additional expense we had incurred in interim (mortgage payments etc.) Buyer's side initially offered nominal compensation but has now said no compensation is owing and has threatened litigation if we do not proceed with sale as per terms of original contract. Does anyone have experience of this scenario and advice on where we stand legally as vendors in this situation? Thank you.

    Surely your solicitor is the best person to advise you on this?


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    #3
    uck51js9zml2yt
    Closed Accounts Posts: 18,268 ✭✭✭✭uck51js9zml2yt


    Have the contracts been Signed by you both?

    As above, what does your solicitor say?


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    #4
    Nic_Col
    Closed Accounts Posts: 97 ✭✭Nic_Col


    Solicitor! (This is what you're paying them for!)

    We closed sale and moved in in January.

    I forget the exact details but there was definitely a penalty clause in the vendor contract we signed, it was a high daily interest rate for each day over the agreed closing date had they not received our funds. It was something like 8% per day. I'd have to look at it again to be sure of the exact details.

    Our solicitor was unconcerned by it, said it wasn't unusual for such a clause to be included in the vendor contract.


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    #5
    q85dw7osi4lebg
    Closed Accounts Posts: 3,502 ✭✭✭q85dw7osi4lebg


    Sales take time, (the average is 200 days at present),mad to go looking for compensation from someone who is buying your house. If you think that has been a drag imagine how long litigation will drag out!


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    #6
    ClaudeB
    Registered Users Posts: 2 ✭ClaudeB


    Thanks for all advice/ opinion. We are to meet with our solicitor again- who had advised seeking compensation. No clause in vendor contract to cover event of late closure. Just interested to hear of any similar experiences so we have some sense of what might be ahead.


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    #7
    sk8board
    Registered Users Posts: 3,312 ✭✭✭sk8board


    Hi,
    I’ve been through this process a lot over the years - a good solicitor will have a clause in the contract with a daily rate of compensation - ONLY for passing the agreed closing date, usually about €75-100/day. If that’s not there, then forget about it.

    Even so, it’s VERY rare to enforce however, as the buyer usually gets themselves together once they are reminder of that clause - I’ve only ever (as a buyer), been threatened/reminded once, and I was delaying closure until the sellers management company could confirm that the management fees were up to date - which happened after the agreed closing date.
    It turned out they weren’t paying the fees and let’s just say no compensation was ever paid and the seller had to pay everything due.

    One thing I would say - conveyance always takes longer than you think, from sale agreed to having keys could easily be 6 months in my experience - and for no obvious reason, perhaps bar slow solicitor correspondence.


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    #8
    voluntary
    Registered Users Posts: 871 ✭✭✭voluntary


    Yeah, you might be eligible for an late payment interest, which is 8% APR this year and was also 8% last year. This equals 0.022% per day.
    So, if there was end date of 30 days before payment and the payment was let's say 300k Euro, then you calculate like:

    300k x 30 days x 0.022% = €1980




    https://dbei.gov.ie/en/What-We-Do/Supports-for-SMEs/Late-Payments/Late-Payment-Interest-Rate-/


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    #9
    uck51js9zml2yt
    Closed Accounts Posts: 18,268 ✭✭✭✭uck51js9zml2yt


    Our buyers insisted on a closing date which we moved out on and then delayed payment for a week.
    We had a penalty Claus in but never dreamed of enforcement.
    I wanted then to buy!


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    #10
    Muahahaha
    Registered Users Posts: 19,646 ✭✭✭✭Muahahaha


    Disappointing to hear that your solicitor did not enter the standard enough 8% interest fee for late payment, it is right there as a blank space on a pro-forma Contract for Sale, all it takes is to enter in 8% and then it is clear that compensation will be owed.

    Nonetheless the buyers solicitor threatening litigation after they ignored a 28 day completion notice is a bit rich. Hold out for your compensation if you wish, it was the other side who didn't complete in mid Jan as agreed so they are being a bit cheeky now throwing around legal threats when it was you who were discommoded. Are you prepared to lose the sale and put it back on the market? If so one option in a sellers market with a lack of supply is a game of brinkmanship, ask your solicitor to tell theirs that without a fair compensation for your extra mortgage payments they caused you're thinking of putting it back on the market because you feel prices have risen. You don't have to be serious on this threat, you just have to make the purchasers think you are so they panic at the thought of losing the house and they pay up. But like others said sound your solicitor out about the options because the details are important here and no-one can properly say what you should do without all the facts, your solicitor is the person for that.


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