Completion
Completion of the contract
The terms of completion are governed by the contract. The sale shall be completed and the balance of the Purchase Price paid by the Buyer on or before the Closing Date. Completion usually involves the furnishing of vacant possession of the property in return for payment of the purchase price.
It will also involve the delivery of the deeds, other legal documents related to the property together with the transfer deed and ancillary documents signed executed or declared/ sworn by the seller in accordance with the contract and pre-completion requisitions and replies.
The buyer will pay the money. Formerly this was paid by bank draft but an electronic transfer of funds is now more common. The documents to be delivered should be pre-agreed in the earlier phases.
Arrangements
The buyer’s and seller’s solicitor traditionally met to exchange the “completion” or “closing documents”, the purchase monies and keys. The default position is that completion is to take place at the seller’s solicitor’s office. It has become common for completion to take place without a completion meeting, in particular in residential sales. The latest edition of the Law Society General Conditions of Sale makes detailed provisions that apply unless amended, where an in-person completion is not required.
An in-person meeting is more likely to take place in relation to a commercial property where the buyer is obtaining secured finance. The buyer’s solicitor may no longer give certain undertakings in relation to a commercial property purchase so that the lender is in effect obliged to appoint its own solicitor. It is more likely in this case that the completion will take place at the office of the buyer’s lender’s solicitor. Provided the parties’ solicitors can comply with the requirements in relation to commercial undertakings, a non-personal completion may be possible and agreed.
Not In Person Completion
Where completion is agreed not to be in person, the following provisions apply. They will apply most typically to a residential property purchase. In this case, in contrast to a commercial property purchase, the buyer’s solicitor will typically have given an undertaking and certificate of title to the buyer’s lender drawn down the purchase money is in advance of the completion.
The seller’s solicitor will send documents on trust retained to the seller’s solicitor’s order by the buyer’s solicitor to enable the buyer’s solicitor to check them to verify that they conform with what has been agreed. Beforehand or on the same day, the monies are typically transferred by electronic transfer of funds from the buyer’s solicitor to the seller’s solicitor to be held on trust and to the buyer’s solicitor’s order by the seller’s solicitor pending completion. At the moment of completion, the documents and money are respectively released unconditionally to the buyer’s solicitor on behalf of the buyer and to the seller’s solicitor on behalf of the seller.
General Conditions
Where Completion is to take place otherwise than at the office of the Seller’s solicitor then, unless otherwise agreed in writing, the following provisions shall apply. The buyer’s solicitor shall nominate not less than five Working Days prior to the Closing Date the manner in which all completion documents are to be dispatched (registered post, by hand or courier, DX, collection or other agreed mode of dispatch). The mode of dispatch is at the buyer’s solicitor’s sole risk and expense provided that the seller’s solicitor uses the mode of dispatch nominated by the buyer’s solicitor or otherwise agreed
Not later than three Working Days prior to the Closing Date the buyer’s solicitor shall send to the Seller’s solicitor a list of closing requirements in accordance with the terms of the contract and as agreed in replies to Requisitions and Rejoinders (if any). It is the responsibility of the buyer’s solicitor to ensure that closing searches are furnished to the seller’s solicitor on or before the Closing Date and failure to do so will not be a reason to postpone Completion.
When the Seller’s solicitor is immediately able to satisfy the above closing requirements, then where applicable, redemption figures for any mortgage or charge on the Seller’s title shall be furnished to the Buyer’s solicitor. The seller’s solicitor shall undertake with the Buyer’s solicitor in the following form
“In consideration of the completion of the within sale and in consideration of your furnishing the balance of the purchase price to us (in the agreed manner) we hereby undertake with you to immediately furnish copies of all the completion documents to be signed by the seller properly executed and to act as your agent (without charge) in accepting delivery of the deed containing the receipt clause (thereby complying with Section 77(3) of the Land and Conveyancing Law Reform Act 2009) and immediately thereafter to dispatch to you all of the completion documents in accordance with the agreed list of completion documents and the mode of dispatch nominated or otherwise agreed.”
Completion shall take place at the office of the Seller’s solicitor when the Seller’s solicitor has received the balance of the Purchase Price and is in a position to satisfactorily explain, all acts appearing on any closing searches received and is in a position to satisfy all of the Buyer’s closing requirements in accordance with the terms of the contract. All of the completion documents are thereupon be dispatched to the buyer’s solicitor by the mode of dispatch nominated or otherwise agreed to include satisfactory explanation of all acts appearing on searches and the property’s keys or authority for their collection.
The Seller’s solicitor shall communicate with the Buyer’s solicitor in a recorded form advising that Completion has taken place and thereupon the Seller’s solicitor shall be entitled to release the purchase money and the Buyer shall thereupon be entitled to vacant possession.
Pending Completion in accordance with the Conditions any money received in advance of Completion by the seller’s solicitor, other than any deposit held as stakeholder, shall be held by the Seller’s solicitor as trustee for the Buyer.
Obligations at Completion
The seller’s solicitor must at a minimum, deliver a deed executed (signed and witnessed) by the seller transferring the property to the buyer. Invariably, a substantial amount of other documents including supporting declarations by the seller and others, the title deeds in the case of unregistered title property and a range of compliance documents arising from the requisitions and replies, the contract and pre-contract correspondence are to be delivered at the completion/ closing.
The seller is to give vacant possession of the property (unless otherwise provided in the contract). This requires handing over keys, alarm codes and controls. It also requires that the property be cleared out of items not included in the sale or agreed to be left. Vacant possession usually requires the removal of rubbish and waste from the property.
Some outgoings are not apportionable in the sense that they do not attach to the owner of the property as such. Utility bills are contractual in nature and the liability does not apply to the successor owner. Some utility providers may refuse connection to the property if there are arrears from a previous owner. However, this is unlikely to be legitimate having regard to their obligations as a regulated utility (sometimes monopoly) suppliers.
The payment of such outgoings is usually dealt with informally. The seller will be liable for sums owed and billed which generally arise in arrears. Bs best practice that the seller requests that a final statement is given by the utility provider with reference example to a meter reading (preferable agreed with the buyer) on the closing day and sent to him at a new address. The buyer should enter new contracts for supply as and from completion.
Undertakings
Undertakings are an important part of the conveyancing process. Solicitors’ undertakings are enforceable both as a disciplinary matter and under a special short form court application. See the sections under banking law in relation to direct enforcement of solicitors’ undertakings and the court’s supervisory jurisdiction in such cases.
In a number of cases, the court awarded compensation to lenders by reason of a solicitor’s failure to comply with the undertakings. This was pursuant to the inherent supervisory jurisdiction over solicitors. The effect of certain later cases was that a compensatory award should at most should be made. The court should not make an award of the gross sum the subject of the undertaking by way of punishment. The principal sanction should be a disciplinary sanction against the solicitor.
Failure to honour a financial undertaking is likely to constitute very serious misconduct and will frequently lead to the solicitor being struck off, almost inevitably if it involves a failure to honour a financial undertaking.
Commercial Undertakings Prohibited
Following a number of high-profile instances during the so-called Celtic Tiger period, where solicitors’ undertakings were not complied with, the Law Society revised its recommended and legally acceptable practices. Solicitors’ undertakings in relation to the below-mentioned matters may no longer given in commercial property cases.
Effectively, anything other than a principal private residence or a not-for-letting holiday home is a commercial property for the purpose of the regulations. The regulations specifically provide that ‘buy-to-let’ properties are classed as commercial property.
- An undertaking given to a lender to provide the lender with a certificate of title relating to any commercial property.
- An undertaking given to a lender to provide the lender with title deeds to any commercial property.
- An undertaking given to a lender to pay or procure the payment of any stamp duty or to register or procure the registration of title to any commercial property.
- An undertaking given to a lender to discharge or procure the discharge of a commercial mortgage or other security or a com
Accordingly the lender must in effect retain its own solicitor or legal department to handle the monies.
Searches
Searches will usually be undertaken on the date of completion to vouch the position in respect of ownership and certain critical matters such as bankruptcy filing, planning enforcement, judgements/ pending litigation and certain other matter.
Searches are usually made or updated on the day of completion and any apparently adverse entries may need to be explained. If they show a problematic matter, the completion may be postponed and legal consequences may follow. Undertakings might be given for required particular to deal with this charge of the seller’s mortgage.
The bankruptcy search shows adjudications of bankruptcy and also insolvency arrangements. A sheriff’s search and revenue sheriff’s may be undertaken in respect of leasehold property. Theoretically, leasehold property can be seized although this has not happened in modern times. The 2009 Act restricts the possibility further. The fines legislation also provide for the possibility of seizure of property by way of enforcement of a fine. Accordingly, a receiver of fines (the sheriff revenue sheriff) search will also be commonly undertaken.
Handing over Documents
Traditionally the closing appointment involved the buyer solicitor receiving the closing document in accordance with a pre-agreed list. The buyer solicitor will check that the agreed documents have been given and have been properly signed and executed.
In the case of an unregistered title this will usually include the originals of the deeds, copies of which have been furnished.
The sellers and buyers will not usually attend the completion meeting. The buyer’s solicitor will usually have met the buyers-execute the mortgage and security documentation as well as any supporting documentation required under the loan facility in advance. Execution is in escrow pending completion.
The seller’s solicitor will usually have had the seller execute he purchase/sale deed in escrow together with other supporting deeds and documents as required. When a document is signed in escrow, it takes effect once the relevant condition is satisfied. In this case the condition is the completion of the sale. The deed will have a receipt clause and the seller’s solicitor will then have authority to receive the purchase money. In some cases, it may be appropriate to have this authority specifically approved proved
If part only of an unregistered title is sold, certified copies of the deeds may be furnished together with a statutory acknowledgement and undertaking in the deed itself as to the originals. In this case, the originals will not be furnished, but will be required to be produced if required, for example in court proceedings to prove title.
Payment
Under the default General Conditions when furnishing an Apportionment Account for the closing of the sale, the seller’s solicitors will furnish to the buyer’s solicitors a statement from the seller’s mortgagees setting out the amount required to redeem the mortgage as at the closing date together with the accruing daily rate of interest thereafter.
Under the default General Conditions ( which are often amended to provide for EFT) the buyer is to l furnish to the seller separate bank drafts for the amount required to redeem the mortgage and for the balance of the purchase monies respectively. The seller (by his / her solicitor) will forthwith discharge the mortgage debt to the seller’s mortgagees and furnish to the Buyer proper evidence of such discharge and will furnish to the Buyer such release of the mortgage as may be appropriate.
The seller’s solicitor will usually give an undertaking to discharge the seller’s mortgage from the proceeds of sale in a residential mortgage case. A contractual condition should deal with the matter, if the default provisions are not to apply. The buyer solicitor will require proof of up-to-date redemption statement from the mortgagee / lender to show that there are sufficient proceeds to discharge the mortgage. If the mortgage secures a number of loans, then the release must be agreed in return for a specific payment (less than the price).
Post-Completion Seller’s Solicitor
After completion, the seller’s solicitor is obliged immediately, to discharge any such loan finance and make arrangements to procure a documentary or electronic release of the seller’s mortgage in accordance with the undertaken given.
After completion, the seller’s will usually notify the estate agent if there is one, as to completion. If the keys are not handed over at the completion appointment they may be authorised to be released to the buyer from the estate agent. This would be necessary or alternative arrangements will be required in respect of the keys where there is not an in-person closing.
The seller’s solicitor will notify appropriate authorities such as the rates authority and other bodies as the circumstances may require. There are statutory obligations to notify changes of ownership to the rating authority within 14 days failing which financial penalties may, in effect arise. In the case of residential property, steps must be taken to change the local property tax account after completion.
Post-Completion Buyer’s Solicitor
After completion, the buyer’s solicitor must attend to certain matters. The purchase deed must be the subject of a stamping return within 30 (extended to 44) days and stamp duty must be paid. The purchase deed should be lodged for registration in the Land Registry. If the seller’s title is not already registered, an application will be required first registration which is now compulsory on every sale.
The buyer’s solicitor commonly will have given an undertaking in a standard format to the buyer’s lending institution which covers stamping of the purchase deed and registration both of the purchase deed in the Land Registry and registration of the mortgage/charge by the seller to the lending institution over that title in the Land Registry.
Formerly deeds were physically stamped by presentation to the Revenue Commissioners. In 2012 the system of stamping ng was revised to provide instead for an electronic return and payment followed by and an online unique certificate. Stamping is required before the deeds can be lodged for registration. The land registry is not permitted to register without evidence of stamping. The certificate is placed with the deed.
The form of undertaking will require the seller solicitor to return all the title deeds post-registration, when the title has been registered in the Land Registry. This will include the mortgage deed, together with proof of registration of the title to the buyer to the property and the title of the lender to the mortgage/charge over the property. It will also include the quasi-legal compliance documents required to sell the property in the future.
In the case of leasehold property, there may be an obligation to notify the ground landlord and /or the a management company and furnish them with a copy of the assignment/transfer within a certain period. A fee may be payable.
References and Sources
Primary Texts
Law society of Ireland: Conveyancing 9th Ed Brennan et al.
Investigating Unregistered Title- Magee 2012
Irish Conveyancing Law- Wylie & Woods 4th Ed 2019
Irish Conveyancing Precedents- Laffoy
Irish Conveyancing Statutes – Wylie 2020 6th Edition:
eConveyancing and Title Registration quantity
Complex Conveyancing Law Society PPG Hession 2nd Edition
Registration of Deeds and Title in Ireland – Deeney 2014
UK Textbooks
Conveyaning Handbook 28th Ed. Silverman et. al (annual)
A Guide to Conveyancing Residential Property by Alan Stewart
A Practical Approach to Conveyancing (22nd ED) Robert Abbey and Mark Richards
A Practical Approach to Commercial Conveyancing and Property 5th Ed Robert Abbey