Banks will not return completion funds or mortgage funds. Many other professionals involved will not work either.
This can create problems for those who have already committed to completing that day.
We hope this will not affect many transactions, given the day of the week and time of year.
Either way, lawyers and transfer agents are used to unexpected events that occur before or during completion and will work hard to deliver results for clients.
What you can do if your customers are contractually required to finish on September 19
Explain the problem to the affected customers. It should be fairly easy to explain the problem to customers – it’s been widely publicized.
Everyone should be pragmatic, collaborative and consumer-focused.
The goal is to enable consumers to transact with as little disruption and additional cost as possible.
The risk of not being able to pay on the due date is the responsibility of the purchaser due to the interest and execution time clauses provided for in the General Conditions of Sale. However, in many cases this may not matter.
The Banking and Financial Transactions Act 1971 provides that:
- no one may be compelled to make a payment on a public holiday, and
- the execution of a payment on the first working day following a public holiday is assimilated to the execution of a payment on maturity
Consumers should finish by the next date banks are able to send CHAP payments – Tuesday, September 20.
Talk to your customers and agents and other businesses in the chain (as far as you know them) and agree that law enforcement means completion on September 20.
If you can’t complete on September 20, try setting another completion date.
Agree on all issues of interest or other payments before completion and on the basis that interest or other payments are kept to a minimum.
Registration of the modified date and amendments to the contract
There is a difference between agreeing that completion will take place on September 20 as of right and making other changes.
The law of 1971 seems to postpone until the next day the obligation to pay a completion indemnity. This is consistent with the legal rule that if an act required by a contract is impossible to perform legally at any given time, performance of the obligation cannot take place until the act can be legally performed (see John Lewis Properties v Viscount Chelsea  67 P&CR 120).
If it is agreed that completion will take place on 20 September and the effect of the 1971 Act on the transaction means that there is indeed a statutory change, then there does not appear to be any “modification” of the contract. Compliance on the next business day is deemed to be compliance on the public holiday.
If you can agree on September 20 as the completion date, record the agreement between lawyers and transfer agents across the chain. This probably doesn’t need to be signed by the customers, although you want to make sure the customer understands and agrees.
If completion cannot take place on September 20 – perhaps because it is not possible to hire movers for that day – and completion is agreed for another day, or, if further changes are made to the contract it will be necessary to comply with section 2 of the Property (Miscellaneous Provisions) Act 1989 and formally amend the contract.