Is this a first?

I have just been informed that my off plan is now ready to complete on time, (The contract states June 30) However I have heavy work commitments in July and have asked if I can delay and complete in September. My solicitor has informed me that the builder is insisting I complete in July as per the contract. (I do not want to sign over power of attorney and I know I should be glad the process has gone through smoothly).

Its the first time on this site I have come accross a property being completed on time, and the buyer trying to delay!!!!!

I don't know whether to laugh or cry!.

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Brian, has the LFO been issued?  You don't mention that.  I would think that it has (you obviously have been a member of this forum for a while so would have understood the significance of the LFO being issued!).

From personal experience, our developers didn't press us to complete, but they were delayed by six months on the contractual completion date, so maybe they couldn't.  But I wouldn't have thought it a big deal to delay completion by a month or so, for any developer.  What do others on your development have to say?


This message was last edited by Pitby on 6/4/2007.

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Thanks for your reply Jan.

I need to talk to the solicitor regarding LFO etc, she took me by surprise with the contact saying the property was ready.

Ours is the final phase of a 3 phase development and I think the other buyers just want to complete ASAP.  (reading some of the experiences on the forum you can see why) and the builder/developer probably would like to sign off the remaining properties before August.

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I would ensure that the LFO has been issued and take it from there.   We, personally, delayed our completion by about five months and know our friends, in the same phase, delayed there's until last week (about eight months), but we did have the fact that the developer was late in completing.

If the LFO has been issued, then just try to ascertain what other buyers are doing (as opposed to just relying on your solicitors' advice) and try for a completion date that suits you.

You can but only .....

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Check if there is an extension clause in favour of developer and if so, ask for an equivalent  justified extension ( even if not agreed in the original contract) for the meeting of your contract obligations. Usually Court Decissions try to put an equilibrium in the interpretation of contracts ( i.e.- in penalty clauses ) and even when not agreed it is understood that equivalent clauses are in favour of the consumer. 

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Maria, Jan 

Thank you for your advice,it is appreciated.

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Maria - I have 3 related questions:

1. As our development is going to be nearly 2 years late, does that mean we can delay completion for several months after lfo is issued ?

2. Is completion the point when we pay the balance of monies??

3. What is the difference between "Completion", "LFO being issued", "signing of Deeds" and "paying balance of monies". Could you please explain the sequence and timing of these activities. Do they all happen at once ? Should they all happen at once ??

4. At what stage or at what point should we start finalising mortgage process ?  At what stage should the developer offer their mortgage ??

Thanks

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Hi Captain 007,

I will try to answer your questions from info I have gleaned on this website and elsewhere.  Maria may well correct me if I am wrong, in any case these are my own observations!

Completion means paying the balance of purchase monies owed to the developer in order to get the key to your property.  Normally this is done at the notary's office by appointment and  the signing of the deeds is also done here. All interested parties must attend i.e. your solicitor, developer's representative, Bank representative if you are getting a mortgage and yourselves if you have not given a power of attorney to your solicitor to complete on your behalf.  Last but not least you must also have the funds available in agreed form and any insurance policies needed.  Usually the developer will notify you or your solicitor when he requires completion and there may be 2 or 3 weeks notice given.  Depending on the provisions of the contract you signed for the purchase you may be liable for penalties if you do not complete within the time frame specified. Given that your development is over 2 years late I imagine it would be hard for the developer to enforce such penalties however I doubt that you can delay indefinitely - it should be possible to get the developer to agree a delay period but an independent solicitor's opinion and advice is strongly recommended to clarify this for you.

The Licence for First Occupation (LFO) issued by the local authority is needed to make the development "legal" for residential use etc and is issued when the town hall is satisfied that all planning and other conditions have been complied with by the developer.  Without this the water and electricity companies will not provide connections.  The process of obtaining this licence can take anything from 6 weeks to many months depending on the problems encountered. Nevertheless it is vital to ensure that the developer has obtained this licence before paying over the final purchase monies for obvious reasons.  Again your solicitor is the person to check this out for you.

Having worked in a bank myself, I think you should at least have mortgage "Approval in principle" agreed a few months before expected completion date and as the date gets nearer keep in touch with your bank to ensure that no conditions have changed and that you will have all the necessary documents life and home insurance etc in place to enable draw down of the mortgage at short notice.  I think the process is much the same for the developer's mortgage except that you go to the nominated bank and avail of the conditions offered as part of that package.  However I would suggest that you shop around on this in order to get the best value. Be aware that there may be some fee charged if you decide not to take up the developer's mortgage and it was included in your contract!

I hope the above is of some help to you and I would stress again that you should avail of the services of a good independent lawyer to clarify matters and protect your interests in such an important transaction.

Regards and best of luck with your purchase,

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DEAR CAPTAIN AND ALL:

 

ANSWERING YOUR QUESTIONS ( CAPITAL LETTERS).

Maria - I have 3 related questions:

1. As our development is going to be nearly 2 years late, does that mean we can delay completion for several months after lfo is issued ?     NOT NECESSARILY, IT MEANS THEY ARE IN CLEAR BREACH OF CONTRACT BUT... IF ARRIVED THE TIME THEY REQUIRE YOU FOR COMPLETION, YOU WILL HAVE TO EITHER STATE THAT YOU ARE NOT COMPLETING DUE TO THE PREVIOUS BREACH OF CONTRACT, BETTER IF BEFORE, OR TRY TO NEGOTIATE THAT EXTENSION AND IT IS NOT CERTAIN THEY WILL GRANT IT AND YOU ARE NIOT REALLY ENTITLED TO POSTPONING IT BUT TO A COMPENSATION FOR THE DELAY. DELICATE. BETTER GOOD LEGAL ADVISE WHEN THE MOMENT ARRIVES ( BETTER IF BEFORE).

2. Is completion the point when we pay the balance of monies?? YES IT IS, SOMETIMES A LITTLE BIT EARLIER. IT DEPENDS ON WHAT IS AGREED BY CONTRACT.

3. What is the difference between "Completion", "LFO being issued", "signing of Deeds" and "paying balance of monies". Could you please explain the sequence and timing of these activities. Do they all happen at once ? Should they all happen at once ?? AGAIN, IT DEPENDS ON CONTRACT. BUT OF COURSE NO COPMPLETION SHOULD BE PERFORMED BEFORE LFO IS GRANTED. ALSO. OBVIOUSLY YOU PAY BALANCE AT COMPLETION. AND YES COMPLETE TRANSACTION HAPPENS IN SPAIN WHEN THE OFFICIAL TITLE IS PRODUCED AT THE NOTARY´S OFFICE ( SIGNING OF DEEDS), THEN YOUR RIGHT NEEDS TO BE FULL REGISTERED IN THE LAND REGISTRY TO HAVE FULL OWNERSHIP RIGHTS BEFORE THIRD PARTIES.

4. At what stage or at what point should we start finalising mortgage process ?   WHEN COMPLETION IS ARRIVING.At what stage should the developer offer their mortgage ?? IT DEPENDS, SOMETIMES IT IS OFFERED AND ACCEPTED WHEN THE INITIAL CONTRACT IS SIGNED, SOMETIMES AT ANY MOMENT DURING THE PURCHASE PROCESS ( TIME BETWEEN DEPOSIT AND DEEDS). WHWT IS CLEAR IS THAT YOU ARE NOT OBLIGES TO SUBROGATE IT AND MORTGAGE CANCELLATION FEES CANNOT BE IMPOSED ON YOU IF YOU FIND OR WANT ANOTHER MEAN FOR FINANCIATION.

Thanks

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