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What is a Long-Stop Completion Date When Buying a New Build?

What is a Long-Stop Completion Date When Buying a New Build?

By In Blog, Conveyancing On 08/12/2021


A long-stop completion date is the date by which a new build must be finished. If it isn’t, the buyer has the right to cancel the contract and get their money back. Or, the buyer can continue with the purchase. Depending on the terms of the contract, the developer may owe the buyer money for every day the property is not completed after the deadline.

Why have a long-stop completion date?

When you buy a new build, there are two different types of completion date:

  1. The anticipated legal completion date – which is the date the developers think they’ll be finished by; and
  2. The long-stop completion date – which is the date the developers have to be finished by, or the buyer can withdraw and get their deposit back.

This is unique to new builds. This is because no one can be entirely certain when the construction work will actually be finished. There are so many unknown factors when building, including the availability of tradesmen and materials. Then there’s the weather to contend with.

But understandably, a buyer doesn’t want to commit to a purchase with no end in sight. Otherwise, they could be left in limbo for years, having paid a deposit with nothing to show for it. That is why long-stop completion dates exist. They act as a promise to the buyer that their new home will be finished by a specified date.

What happens if a new build is not ready by the long-stop completion date?

To comply with the agreement, the developers must serve the Notice to Complete by the long-stop completion date. If they fail to do so – because the property is not yet ready – then the buyer has two options:

  1. Cancel the contract and get their deposit back; or
  2. Continue with the purchase and extend the completion date

If the buyer goes with option two – continue with the purchase – then they need to be wary of their mortgage offer. Mortgage offers have an expiry date. If the original long-stop completion date comes and goes, the buyer may have to extend their mortgage offer or reapply. However, the good news is that the developer usually has to pay the buyer compensation, should the building works exceed the long-stop completion date.

Can I cancel the contract for a new build?

A buyer can only withdraw from the contract without losing money if the developer exceeds the long-stop completion date. With new builds, contracts are usually exchanged very quickly. The buyer must provide a percentage of the asking price as a deposit. This is non-refundable, unless the transaction has not completed by the long-stop completion date.

Buyer beware

Buyers need to be aware of this, if they intend to commit to a new build purchase. The reality is that you cannot be sure when the property will be finished. Developers often give very optimistic time-frames, but they are not legally bound to comply with any deadlines – other than the long-stop completion date. This is often buried deep in the paperwork and not everyone understands the implications.

The long-stop completion date is often six months after the anticipated legal completion date. However, once the Notice to Complete is finally served, you typically only have 10 days to gather the funds and finalise the transaction. Those who buy new builds don’t always realise this, creating a lot of practical difficulties. For instance, if you sell your current property but the new build isn’t finished by the anticipated date, then you may be forced to rent. But you cannot be sure how long you’ll need to rent for. Things move very quickly when the Notice to Complete is served. You probably won’t have enough time to give notice on your rental property, meaning you’ll need to pay rent and a mortgage concurrently.

Speak to our solicitors

That is not to say that buying a new build off-plan is a bad idea. It can be a great opportunity, especially if you have a lot of flexibility. If not, then you may want to consider whether buying a new build is right for you. In particular, we recommend that you read through the fine print very carefully to see what the long-stop completion date is.

We handle a lot of new build conveyancing transactions. If you are buying a new build, contact us for help. The process differs to other types of conveyancing transactions and requires a specialist hand. We always explain the practicalities of buying a new build to our clients, making sure they know exactly what to expect over the coming months.

Call us on 0191 567 7244 and we’ll be happy to help you. If you would rather contact us online, email us at info@cooklaw.co.uk and one of our team will be in contact with you shortly.


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