Bank holiday impact on completions scheduled for 19 September
Banks will not be remitting completion monies or mortgage monies. Many of the other professionals involved will also not be working.
This may create issues for those who have already contracted to complete on that day.
We hope this will not affect many transactions, given the day of the week and time of year.
In any case, solicitors and conveyancers are used to unexpected events happening on or before completion and will work hard to deliver results for clients.
What you can do if your clients are contractually bound to complete on 19 September
Explain the issue to affected clients. It should be fairly easy to explain the issue to clients – it has had a lot of publicity.
Everyone needs to be pragmatic, collaborative and consumer focused.
The aim is to enable consumers to complete their transactions with as little disruption and additional cost as possible.
The risk of being unable to pay on the completion date falls upon the buyer as a result of the interest and notice-to-complete provisions as per the Standard Conditions of Sale. However, in many cases, this may not be of importance.
The Banking and Financial Dealings Act 1971 provides that:
- no-one can be compelled to make a payment on a bank holiday, and
- the making of a payment on the first working day after a bank holiday is deemed the equivalent of making a payment on the due date
Consumers should complete on the next date on which banks are able to send CHAPs payments – Tuesday 20 September.
Speak to your clients and the agents and other firms across the chain (insofar as you are aware of them) and agree that the operation of law means completion will take place on 20 September.
If you cannot complete on 20 September, try to settle an alternate completion date.
Agree any issues of interest or other payments in advance of completion and on the basis that any interest or other payments are kept to a minimum.
Recording the changed date and amendments to the contract
There is a difference between agreeing completion will take place on 20 September by operation of law and making other changes.
The 1971 Act appears to defer the obligation to pay completion money to the following day. This is in line with the legal rule that if an act required by a contract is impossible to perform lawfully at a given time, then enforcement of the obligation cannot take place until the act can be performed lawfully (see John Lewis Properties v Viscount Chelsea  67 P&CR 120).
If it’s agreed that completion will take place on 20 September and that the effect of the 1971 Act on the transaction means there is effectively a statutory change, then there doesn’t seem to be any ‘variation’ of the contract. Compliance on the next working day is deemed to be compliance on the bank holiday.
If you can agree 20 September as the completion date, record the agreement between the solicitors and conveyancers across the chain. This likely does not need to be signed by the clients, although you will want to make sure the client understands and agrees.
If completion cannot take place on 20 September – perhaps because it’s not possible to engage removers for that day – and completion is agreed for another day, or, if other changes are made to the contract, it will be necessary to comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 and formally vary the contract.