I'm confused about the various forms of completion that can follow on from exchange of contracts in a property deal. What is completion on notice? What are long stop dates? Can you advise?
In the majority of cases, the date on which a deal should be legally completed is noted in the contract and is then binding on all parties. The buyer and seller have to find a date to which they can both agree. There is no real minimum or maximum time limit, but normally they fix a date between a week and a month after contracts are exchanged.
Particularly when you are dealing with a brand new property, contracts will be exchanged before the actual build has been finished and so it's not possible for an exact completion date to be set. Instead, the contract will usually give an anticipated date and the developer will give formal 'notice' to the buyer once the property is structurally complete and ready for occupation - although there may still be some minor 'snagging' items to be sorted out, such as the garden turf. The buyer will then have to complete the purchase within a week or two. This is 'completion on notice'.
To prevent contracts like this being potentially open-ended and to prevent the build dragging on, it's now recommended that contracts also include provisions allowing the buyer to withdraw from the deal and have their deposit returned, if there are significant delays. The length of the acceptable delay can be up to 12 months from the anticipated date - called the 'long stop date' - and will depend on the type of property and whether the property is at least weatherproof at the time contracts are exchanged.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.