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Completion of the sale and purchase of a property will usually involve the following steps and issues which lead to payment of the balance of the purchase price by the purchaser on the one hand and release of the keys to the property by the vendor on the other.
| 1. |
From the purchaser's perspective
| a. |
If the purchaser is an individual, he should:
| i. |
Confirm with his solicitors several days before completion the exact amount payable on completion. This usually consists of the balance of the purchase price and his solicitors' fee. Assuming that the purchaser has paid 10% of the price as deposit and is using a loan from a bank for 70% of the price, he will need to have 20% of the price from his own resources ready for completion, together with legal fees. |
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| ii. |
Execute all relevant documents at the office of the purchaser's solicitors before completion (including assignment, mortgage and loan facility letter, etc.) and pay the balance of the price and legal fees either by a bank draft drawn in favour of the solicitors' firm or by transfer into its bank account. If payment is by personal cheque, allow sufficient time for cheque clearance. For example, if completion is on a Friday, the purchaser's solicitors will usually require that the cheque for the balance of price be received by the firm not later than Wednesday. |
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| iii. |
Before completion, make an appointment with the vendor through the estate agent for a final inspection of the property mainly to verify the vendor's ability to deliver vacant possession of the property. Carry out the inspection in the morning on the completion date by the latest. After the inspection, inform the purchaser's solicitors as to whether the inspection was satisfactory. |
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| iv. |
Regarding utilities, such as water, electricity and gas, the purchaser should produce the agreement for sale and purchase or obtain a letter from his solicitors confirming the date of completion so that the purchaser can prove to the utility companies his interest in the property and when he will become the owner of the property. The purchaser will have to fill in a relevant form and pay a deposit in order to open an account in his name for each utility. |
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| b. |
If the purchaser is a corporation, basically, the same matters and issues set out in paragraphs 1(a)(i) to (iv) above apply. In addition, the following are necessary:
| i. |
A written resolution or minutes of meeting of the Board of Directors of the company have to be prepared, authorising one or more director(s) or other authorised persons in accordance with the Articles of Association of the Company to execute the assignment and mortgage. |
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| ii. |
The common seal as well as the company chop must be brought along in order to execute all the relevant documents at the office of the purchaser's solicitors before completion. |
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| 2. |
From the vendor's perspective
The vendor should:
| a. |
Ensure that all occupants and items of furniture not sold to the purchaser are vacated from the property before completion in order to deliver vacant possession of the property on completion. |
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| b. |
Before completion, retrieve receipts for the management fee deposit and invoices or receipts for the latest management fee and demand for rates and government rent (if applicable) and produce them either to his solicitors or the estate agent, for them to prepare an apportionment account. |
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| c. |
Deliver keys to the property to his solicitors or estate agents for delivery to the purchaser on completion. |
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| d. |
Execute at the office of the vendor's solicitors the assignment (already executed by the purchaser). If the vendor is a corporation, bring along the company's common seal and company chop to execute the assignment and prepare a written resolution or minutes of meeting of the Board of Directors of the company authorising one or more director(s) or other authorised person(s) in accordance with the Articles of Association of the company to execute the assignment. If the property is a negative asset, confirm with the vendor's solicitors before completion the exact amount payable by the vendor to discharge the existing mortgage and pay the same together with legal fees to the vendor's solicitors on or before completion. |
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