What Is The Simultaneous Exchange And Completion Of A Property?
Posted on 8th July 2020
At MG Legal, we understand that, when dealing with legal matters, there can be many different terms and phrases to get your head around. See our blog, in which our Preston solicitors tackle conveyancing jargon, here. This is why our team of property experts are on hand to explain the conveyancing process, in ways that are easily understandable, in order to guide you through the process. This way, our clients always know at what stage of the transaction they are at, what this means and what the next steps are.
One important legal phrase relates to a simultaneous Exchange and Completion; our Preston solicitors explain:
Firstly, what is the difference between Exchange and Completion?
Exchange of Contracts and Completion are two vital stages of your conveyance, and both have very different meanings. Essentially, they entail the following:
Exchange of Contracts, also known as the point of no return, is the point at which the transaction becomes legally binding. It is, therefore, imperative that all necessary due diligence has been carried out before this point, and any required arrangements have been made, in anticipation of Completion. This is because, if an issue is encountered following Exchange, the buyer is still legally bound to purchase the property on the agreed date, regardless. Should the buyer wish to withdraw at this stage, they risk losing their deposit, and the Contract being rescinded.
For more on Exchange of Contracts, and its importance, see our blog here.
Completion is the day upon which the matter is deemed legally complete. The funds are transferred to the credit of the client account of the seller’s solicitor. Upon receipt of such funds, the sale is finalised and the keys are released to the buyer. The Completion day is the day that we all work towards, and is, essentially, the day of the big move.
For more on Completion Day, and what you can expect, see our blog here.
So, what does it mean when we are dealing with a simultaneous Exchange and Completion?
When dealing with a simultaneous Exchange and Completion this, essentially, means that the two take place on the same day. This is common when dealing with property transactions, and can arise as a result of many different instances.
As is the case throughout your conveyancing transaction, any decisions made are very much made by way of mutual agreement. Our property experts are here to advise you throughout your conveyance, and take your instructions on how you wish to proceed. Our team are here to work with you, not just for you.
A simultaneous Exchange and Completion is, of course, a matter that should be discussed with your conveyancer, specifically in terms of your transaction and unique circumstances. You may well have had a friend or relative who did not simultaneously Exchange and Complete, and this was fine for them, however, this may not be suitable for your own transaction.
Such decisions should, therefore, be discussed with your property expert, before reaching a conclusion.
In some instances, this may be unavoidable, and may be required to facilitate the matter proceeding.
So, in what instances would Exchange and Completion take place simultaneously, and is this is a good thing?
There can be a number of reasons that Exchange and Completion may take place simultaneously, and these can include the following:
- Notice: Where short notice of Completion has been given, it may simply not be possible to allow time between Exchange and Completion, and the same may need to take place on the same day.
- Lender Requirements: Your property conveyancing solicitor not only has a duty to you, as the client, but also to your mortgage lender. Therefore, when dealing with a lender, as part of your conveyance, there are additional requirements that are to be satisfied. For example, when purchasing a property, your conveyancer would require confirmation that they will release funds in time for Completion and, as such, will not proceed to Exchange without such confirmation. This is because, if funds cannot be released in time, and the matter has Exchanged and been made legally binding, then funds to facilitate the purchase will not be readily available. This could result in a breach of Contract matter, which could bring about a world of further problems. Exchange would, therefore, always be considered in light of any requirements of a mortgage lender.
- Chain: When in a conveyancing chain, more information on which can be found here, it can be difficult to obtain all parties’ involved agreement to dates for Exchange and Completion. It may, therefore, be the case that this, simply, happens on the same day, to avoid any issues up and down the chain.
When would Exchange and Completion take place on different days?
There are, of course circumstances in which allowing time between these two stages is the preferred option. These include:
- To attend to the booking of removals firms;
- To provide certainty that the matter will proceed to Completion on the agreed date;
- In order that any required apportionments (when dealing with leasehold property) can be attended to;
- To attend to noting any meter readings;
- To attend to any required works before occupation of the property is taken, by way of a key undertaking. More on key undertakings, and early access to the property you are purchasing, can be found here.
- To ensure there is no risk of the transaction being gazumped, or indeed, gazundered.
- To book time off work, and/or arrange childcare, for the day of Completion to facilitate the big move.
- To begin organising the transfer of utility providers.
As you can see, there are a number of items that can affect whether a simultaneous Exchange and Completion will be the best option for you. So, discuss the matter with your property conveyancing solicitor, who will be able to advise you, accordingly. For our expert advice, get in touch today, at firstname.lastname@example.org.
Alternatively, if you have any other conveyancing query, submit your enquiry online, here, where our local solicitors will be on hand to assist.
MG Legal – Your Local Solicitors
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