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Stuart J
Stuart J, Solicitor
Category: UK Property Law
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Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street practice
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I am in process of drafting up a contract for sale and need

Resolved Question:

I am in process of drafting up a contract for sale and need advice on adding a special condition and how to write the clause:

As part of the sale it has been agreed that after completion (aimed for 27th November) we can stay in the property until 1st March rent free. Also if completion does not happen before the end of the year and it is through no fault of our own we will charge an additional £750 per month to the asking price(agreed by the buyer provided we pay utility bills)

Normally you guarantee vacant possession on completion, please could you advise on how this clause can be added.

Thanks in advance
Submitted: 1 year ago.
Category: UK Property Law
Expert:  Stuart J replied 1 year ago.
Why isnt the solicitor doing this?
Why dont you exchange now and complete March?
Does the buyer have a lender?
If it doesnt complete Nov. bearing in mind u r staying in occupation, what loss will you suffer?
What is the sale price?
Customer: replied 1 year ago.

Answers below:



1) I am doing my own conveyancing.


 


2) As part of the agreement of sale, I will receive the asking price of £110,000 (received on completion) but as part of the offer I will be allowed to stay in the property rent free until 1st March (effectively I am saving on the interest). If I complete on 1st March I will lose out on this free rent which was why I accepted the offer.


 


3) In the early stages (just received the memorandum of sale) so not heard from the buyer yet as to whether a mortgage lender has been arranged.


 


4) The loss will be the free rent as part of the agreement.


 


5) Sale price is £110,000 provided completion happens before the end of the year. If it is delayed the price will be increased and prorated at a nominal rental fee of £750 per month to ensure I benefit from the free rental period.


 


 


 

Expert:  Stuart J replied 1 year ago.
I am away from my desk at the moment. I have seen your reply and I will get back to you as soon as I have a keyboard in front of me. No need to reply to this post. Thanks
Expert:  Stuart J replied 1 year ago.

So are you using the standard conditions and simply wanting to modify them?

I have to ask the question as to whether you are actually competent to do your own conveyancing (forgive me for being blunt) because this type of thing is standard conveyancing procedure.

Is the property that you have mortgage free?

Customer: replied 1 year ago.

That is right - I simply wish to modify the standard conditions of sale to include this clause. In the conveyancing I have done and seen in the past I have used the standard special condition: Vacant possesion will be given on completion.


 


Of course this doesn't apply in my case so I am airing on the side of caution hence why I am seeking advice and checking how this clause can be written first and I appreciate the assistance (hence why I am on the forum and will gladly accept when you reply).


 


It is not mortgage free and I know where you are heading with this: I will still need to instruct a solictor to act in its interests. I am just doing the conveyancing side

Expert:  Stuart J replied 1 year ago.


Thank you. I was just checking that you knew what you were doing
because many people seem to think that they can do it themselves and are
surprised when they get a bill from the solicitor acting on behalf of the
lender which is actually the same amount of money that they would have paid to
have the solicitor do the job in the first place!

There is an issue with the buyer if the buyer is buying with the
aid of a mortgage because the buyer will have to disclose that you are staying
in occupation after completion and that it is not vacant possession the lender
may refuse to lend on that basis or may insist on a buy to let mortgage. If
this proceeds regardless, and the buyer it ignores that, the buyer is in breach
of mortgage conditions. It is obviously not of concern to you but you do need
to be aware.



The reason I ask about the £750 is that for it to be enforceable
it must be a genuine measure of loss that you would incur for late completion.



On a sale price of £110,000 at 5% interest that is of just over
450 quid per month so it may be that your £750 is overstated and not
enforceable. I mention that the completeness in case it ever comes down to an
argument. There is no problem putting it in the contract would if the buyer
doesn't pay, the chances are you would not be able to enforce it. There is the
other argument of course which is that you are staying in the property and so
you haven't lost anything. At least you know the background.



The buyer will pay special damages at the rate of x per month in
respect of any delayed completion and a pro rata amount in respect of any part
of any month.



The parties agree that this is a genuine measure of damages that
the seller is entitled to in respect of breach



The lender will insist on an assured short hold tenancy which
must be for at least six months although you can end it earlier by mutual
agreement.



Completion should be stated as first of March 2014 or early by
mutual agreement



you need to consider what happens with insurance between exchange
and completion and completion and vacation and who pays for it and arranges it.



You need to covenant to keep the property in good repair during
your period of occupation.



You need to consider who is responsible for structural repairs.



You are responsible for all the utilities during your period of
occupation



you need to actually grant yourself the right to remain in
occupation and that should actually be the subject of a hold tenancy agreement
on its own



does that answer?



We are obviously not allowed to draft the document for you but
simply give you points

Stuart J, Solicitor
Category: UK Property Law
Satisfied Customers: 20662
Experience: PGD Law. 20 years legal profession, 6 as partner in High Street practice
Stuart J and other UK Property Law Specialists are ready to help you
Customer: replied 1 year ago.


Thank you that is a very detailed answer and I am very impressed with the service received it has helped put my mind at rest as this is much more complicated than normal (especially with a separate tenancy agreement). You are also right about costs, in this case given the complexity, I will have to reconsider whether doing my own conveyancing is the right choice as this is unusual.


 


Thanks once again, very helpful.


 


 

Expert:  Stuart J replied 1 year ago.


I am glad to help.

If ever you want me in future, you can of course request me but
if you also put my name at the top of the thread, the other experts will tell
me that you are waiting.



Kind regards

Customer: replied 1 year ago.

I just wanted to confirm you received the payment - I tried to rate the service but it did not go through. Please let me know how I can pay if it has not come through.


 


Thanks,


Marc

Expert:  Stuart J replied 1 year ago.


Try rating it again and if it doesn't work, I will send it to
admin and they will resolve.

Thank you

Customer: replied 1 year ago.


Tried again but still hasn't gone through May have to get admin to resolve unfortunately (they can send me an email if they need me to authorise payment). I'll also give them a call.


 


 

Expert:  Stuart J replied 1 year ago.
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Stuart J
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PGD Law. 20 years legal profession, 6 as partner in High Street practice