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Late completion of tenanted property

QUESTION: I have exchanged contracts to sell a tenanted property, but my buyer will not be able to complete on the date we have agreed because he cannot secure bank funding. What are my options?

Any delay in completion beyond the contractual date will constitute a breach of contract. Your options depend upon the wording of the sale contract, but the most common position is that the delay should entitle you to serve a notice to complete.

This would make time of the essence so, if the buyer fails to complete on the date specified in the notice - usually within 10 working days - you could:

• terminate the contract
• forfeit and keep the deposit and accrued interest. If you have accepted a deposit of less that 10%, you should include a contractual provision for the buyer to 'top up' the deposit to 10% in the event of failing to complete
• claim damages to recover your loss
• resell the property.

You would usually retain your other rights and remedies. So you could bring an action for specific performace should you so wish.

Alternatively, you may want to proceed with the sale and you could seek compensation for late completion. Any compensation payment is intended to compensate you for the losses suffered as a result of the buyer's delay.

The compensation is calculated at the rate specified in the contract - commonly 4% above the base rate of a UK bank - on the purchase price, less any deposit paid, for the period between the intended date and the actual completion date.

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