Once you’ve signed and exchanged the contracts, you’re ready to move towards completion of your new house, the deal is legally binding and it’s all smooth sailing, right?
Problems after exchange of contracts do crop up – whether that be a mortgage deal falling through or roof tiles needing major repairs.
But don’t panic!
We’re going to help talk you through the problems after exchange of contracts, meaning you’re ready to face any issues head on.
We’re also going to help guide you as to who is responsible for repairs after exchange of contracts, just in case that dodgy boiler breaks…
To help you quickly find what you’re looking for, use this handy menu:
- What happens between exchange and completion?
- What can hold up exchange of contracts?
- Problems after exchange of contracts
- Who is responsible for repairs after exchange of contracts?
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What happens between exchange and completion?
After the contracts are signed and exchanged, the deal becomes legally binding and so everyone can now work towards completion (in other words, the moving in day).
Between exchange and completion, as we just said, everyone is working towards being ready to move out and take ownership of their new home. Once you’ve exchanged, you’re now legally responsible for the house so it’s a good idea to sort out your home insurance ASAP, just in case anything was to happen.
Also, between exchange and completion, it’s important to ensure your mortgage is in place as this is an important part of allowing you to complete on the set date, as the funds will be released and transferred to the seller. You also need to make sure you give your mortgage lender a copy of the title deeds, which they will hold until the loan is paid off.
You should also register the transfer of ownership with Land Registry and also inform banks, utility companies, postal services, etc of your change of address.
Another thing you need to organise between exchange and completion is removals – a fairly obvious but important one.
You can also visit the property between exchange and completion to ensure all the fixtures and fittings you agreed on are still in place and also check that nothing has been damaged.
Do I own the house after exchange?
Once you’ve exchanged contracts, you’re legally bound to buy the property and can therefore say you are the new owner. However, even though, as we mentioned earlier, you’re legally responsible for your new house after exchange, the seller still owns the house until completion.
After exchange, though, you can tell Land Registry, utility companies, banks etc of your new address and that you’re going to be the new owner, as the deal is legally bound to go through.
If you’re buying a leasehold property, you can also notify the freeholder that you’re the new owner.
What can hold up exchange of contracts?
There’s no one answer as to what can hold up exchange of contracts, as every moving situation is unique. BUT we’ve got a list together of the most common reasons that the process is slowed before exchange of contracts:
- Solicitors unhappy with enquiries – if your solicitor makes an enquiry and isn’t satisfied with the responses, then they will hold up the process until a suitable solution is found
- Busy solicitors – sometimes a solicitor may have many clients all trying to exchange at the same time and so will mean the process takes longer as it takes them longer to complete the work
- Getting a mortgage – if, like most, you require a mortgage to buy a property, then the speed of the process will also be dictated by how quickly a mortgage lender can sort out and approve a mortgage deal for you
- Slow surveyors – once a survey has taken place, you will have to await the results before being able to proceed towards exchange of contracts. A lot of surveyors can be very slow to give results, sometimes taking up to 2 weeks
- Buyer or seller – sometimes it’s the buyer or seller who may be holding up the transaction. This may not be on purpose and may just be a case of being slow to reply to enquiries. If this is the case, your estate agent can get involved to speed them along
If you have any questions about what is holding up exchange of contracts, it’s best to get in touch with your solicitor to find out what’s going on. Most solicitors will keep you up to date on the process anyway, but should you require any further help they’re the ones to call!
If you ask your solicitor and they inform you it’s an issue with the other party and/or their solicitor, you are within your rights to contact the estate agent to ask them to get in touch with the other party and find out what’s causing the delay and encourage them to speed up the process.
Problems after exchange of contracts
There are many problems after exchange of contracts which you could potentially face, even though the deal is legally binding – you’d think it should be smooth sailing…
Not only can things go wrong within the house, which we’re going to talk more about in the next section, there are also more ‘external’ issues which can arise. We’ve made a list of things that could go wrong, so you know how to prepare yourself, just in case:
- One party is made redundant – one of the problems after exchange of contracts which can happen is the buyer being made redundant, and therefore makes them unable to be able to complete on their purchase. Should you be made redundant you will have to inform your mortgage lender and also try to find a new job ASAP, to minimise the risk of losing the mortgage offer and also failing to complete, which has a lot of financial consequences
- One party pulls out of the sale – it is possible that one of the parties will change their mind and pull out of the sale. Although this is a rare occurrence, it can and does happen and is one of the problems after exchange of contracts that you may face. Should this happen, due to the deal being legally bound, there are consequences that will be faced by the party who pulled out, which you can read more about here
- Mortgage company withdraws offer – this shouldn’t happen often, as when given the mortgage offer, there will be a date at which the offer will expire and so all parties should ensure that completion occurs before this date. If, for whatever reason, this doesn’t happen and the mortgage offer expires/is withdrawn, the buyer should try to organise another mortgage deal before the completion date, to ensure everything can still go ahead
- Death of one party – unforeseen events, such as death of a party, can cause problems after exchange of contracts, making the process a lot more complex. Whoever has been left the property in the will legally can’t do anything until the probate process has been completed and they can take ownership of the property, so this would naturally add some confusion into the mix – one for your solicitor to sort out!
- An issue is found – if an issue with the property is found, which wasn’t disclosed before exchange, this can cause problems after exchange of contracts, resulting in a dispute between both parties. There may be a case of the issue being so big that the buyer wouldn’t have exchanged, had they known about it, but as the deal is now legally bound things could get tricky. The best solution for this would be to speak to your solicitor and see what can be negotiated
- Chain break – if you’re in a chain, you rely on the other members of the chain to complete on their sale in order for your sales/purchases to go through. It’s possible that someone below you in the chain may have a problem causing their sale to not go through, which then impacts the parties further up the chain and could result in your sale/purchase not being able to complete, meaning everyone will be in a breach of contracts
Who is responsible for repairs after exchange of contracts?
Once exchange of contracts has taken place, the deal is legally bound to complete. To find out who is responsible for repairs after exchange of contracts, it’s important that you check the contract when you exchange. Generally, it will be written into the contract stating who is in charge of sorting any repairs which may need to be done before completion.
Normally it’s the buyer who is responsible for repairs after exchange of contracts, as they will be taking ownership once completion has taken place and, like we said earlier, are legally responsible for the property. The seller should inform the buyer of any issues or repairs that need to be carried out, but it would then be up to the buyer to sort it.
The buyer should have organised house insurance so if there’s anything major that needs fixing, they can claim it back on the insurance.
Any small repairs that need doing, for example fixing any leaks, some paintwork, etc most responsible sellers will fix these for the buyer before moving out.
Who is responsible for repairs after exchange of contracts, if the issue was there before?
If, as the buyer, you can prove the issue was there before exchange of contracts and just wasn’t disclosed by the seller, then it’s up to the seller to sort it out. This is normally an unlikely situation, as the buyer should have the property surveyed and so any issues would be brought up by the survey.
Can seller refuse to make repairs?
This depends on who is contractually responsible for repairs and at what stage the repair demands are being made.
If the demands are being made in order for exchange of contracts to take place, it’s unlikely the seller will refuse the demands, as they want exchange to occur so the sale can continue to go through.
Or the seller may refuse to make the repairs but instead give the buyer the opportunity to renegotiate on price, so the money saved by the buyer can be used towards making the repairs.
If the seller is contractually bound to make repairs, then obviously they can’t refuse to make repairs without breaching the contract, which would mean they face consequences.
If the seller is refusing to make repairs just before completion and there’s nothing in the contract to say they must make repairs, then, sadly, they’re within their rights to refuse and there’s nothing the buyer is able to do about this.
So that’s everything you need to know about problems after exchange of contracts and who is responsible for repairs after exchange of contracts. Do you have another question to ask? Or maybe you have a story to share? Whatever it is, don’t hesitate to get in touch!
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Millie is a perfectionist with a passion for property and writing articles. You’ll find her researching the latest housing trends and the newest up and coming areas worth investing in. Read more about Millie here.