The Law Society is calling on its members to warn not just clients but also estate agents if there is a possibility that current transactions for ‘additional homes’ may fail to meet the vital midnight March 31 deadline.
In a note to members, the society says the March 31 deadline is putting pressure on all parties involved in transactions - but insists the deadline will be immoveable, and therefore lawyers should inform all those who may be affected if one element of a deal looks likely to threaten the deadline being met.
Specifically it then tells members: “You should warn your client that if completion is fixed for a date on or before March 31 but completion takes place after March 31 then, provided the transaction is subject to the new SDLT provisions, the additional SDLT will be payable. The reasons for a delayed completion will not be material and will include the seller’s default.”
It goes on to say: “You should explain to your clients that there are aspects of the transaction which are to some extent beyond your control, for example, if you are still waiting for a mortgage offer or search results, or if the transaction is leasehold and you are still awaiting information from managing agents and landlords, or if you are not certain that those on the other side of the transaction - or indeed further along the chain - will be in a position to deal when requested and that you are therefore unable to give warranties as to timings.”
The exact provision of the stamp duty surcharge and its implementation timetable will not be known until next Wednesday’s budget, and the Law Society says its members should tell clients of the uncertainties that will exist until that time.
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The situation is becoming more and more complicated and risky. If a fixed completion of 31st March is delayed for any reason, the buyer could end up paying the additional 3%, through no fault of their own. I can see that there will be a significant number of simultaneous exchanges and completions taking place.
In addition, some lenders have extended the time to request the mortgage advance from seven working days to ten. That means that requests will need to be made on or before the 15th March. One day before the budget, and before we all know the final position with regard to the additional SDLT charge. To add more confusion and difficulty, conveyancers should not really be submitting their requests for the mortgage advance until contracts have been exchanged. It’s a no win, no win situation.
If the deadline cannot be met, sellers need to realise that their own slow conveyancers will be blamed when the buyer asks for a price reduction.
The deals we cannot get exchanged are purely down to the selling lawyer taking days and days and days to deal with enquiries.
Not in the month of March! There is no time for the usual slow conveyancers. But there are too many that now exist. Volume outfits are pushed by agents securing vast sums of kickbacks.
But not just volume boys, but those who take on too much and then cannot service it.
Your article is a shoutout to the selling lawyers who are taking too long.
On our sales, buyers' conveyancers are all being prompt.
Might be better pointing the finger at the incompetent behaviour of this Tory government - leaving a decision like this that will affect thousands of people to the last minute with no thought for the consequences - and the long term affect that this decision will have of the market
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