Failure to complete and the notice to complete (SCS 5th ed, condition 6.8)
Aisha is selling her flat in Croydon to Ben. The contract incorporates the Standard Conditions of Sale (Fifth Edition, 2018 Revision) without amendment, except for a special condition under which Ben paid a deposit of 5% of the purchase price on exchange. Completion was due on a Monday, but Ben's lender failed to release the mortgage funds and he did not complete. Aisha is ready, able and willing to complete. At 10am on the Tuesday, Aisha's solicitor hand-delivers a notice to complete to the office of Ben's solicitor.
Which of the following best describes the effect of the notice to complete?
Choose one answer to see the reasoning.
Worked answer
Correct answer C: Ben must complete within ten working days, excluding the day the notice was given; time is of the essence, and he must forthwith pay a further deposit making up 10% of the price.
THE RULE TO REMEMBER
Under SCS 6.8, a notice to complete requires completion within ten working days (excluding the day given), time being of the essence; a buyer who paid under 10% must top up the deposit immediately.
Failure to complete and the notice to complete (SCS 5th ed, condition 6.8)
Under condition 6.8.1, at any time after the time applicable under condition 6.1.2 on completion date, a party who is ready, able and willing to complete may give the other a notice to complete. Aisha meets that test and the notice is given the day after completion date. Condition 6.8.2 requires the parties to complete within ten working days of giving the notice, excluding the day on which it is given, and makes time of the essence for this purpose. Condition 6.8.3(b) adds that a buyer who paid a deposit of less than 10% must, on receipt of the notice, forthwith pay a further deposit equal to the balance of that 10%. Giving a notice to a party's conveyancer has the same effect as giving it to the party (condition 1.3.2). If Ben then fails to complete in accordance with the notice, condition 7.4.2 allows Aisha to rescind, forfeit and keep the deposit, resell and claim damages.
Why A is wrong: Condition 6.8.2 expressly excludes the day on which the notice is given.
Why B is wrong: Twenty working days after the date of the contract is the default completion date under condition 6.1.1, not the period allowed by a notice to complete.
Why D is wrong: Condition 1.3.2 provides that giving a notice to a party's conveyancer has the same effect as giving it to that party.
Why E is wrong: Condition 6.8.2 makes time of the essence once a notice to complete is given, and condition 7.4 gives the seller the right to rescind if the buyer fails to comply.
That's today's practice done. Another featured question tomorrow.
Related questions
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How much compensation, if any, is payable under condition 7.2, and by whom?
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Which of the following best describes the position under the Standard Conditions of Sale?
Risk of damage between exchange and completion (SCS 5th ed, condition 5.1.1)
Which of the following best describes Tomasz's position?
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