Buying
The Gap Between Exchange And Completion
Once contracts are binding but keys have not changed hands, risk allocation, insurance and the consequences of failing to complete all shift in ways buyers rarely anticipate.
Many systems separate the moment a purchase becomes binding from the moment ownership transfers. The interval between the two has its own rules.
Commitment arrives before possession
At the point contracts become binding, both parties are committed to a completion date, and withdrawal ceases to be a matter of changing one's mind.
The buyer typically pays a deposit at this stage, which is at risk if they fail to complete, and the seller becomes obliged to transfer the property on the agreed day.
Whether a transaction works this way, and what the consequences of default are, depends entirely on the jurisdiction, so the local structure has to be confirmed with a conveyancer.
Why a gap exists at all
The interval allows for practical arrangements that cannot sensibly be made while the transaction might still fail: booking removals, giving notice, arranging utilities and coordinating a chain.
It also gives the lender time to release funds and the conveyancers time to prepare the transfer and the accounting between the parties.
Where a chain exists, everyone becomes bound at the same time and completes at the same time, which is why the gap is negotiated collectively rather than individually.
Risk and insurance move
Responsibility for the property during the interval is determined by the contract, and in many arrangements the buyer bears the risk from the moment contracts become binding.
That is why buyers are commonly advised to have buildings insurance in place from that point rather than from the day they receive the keys.
A fire or storm during the interval does not usually release the buyer from the obligation to complete, which is the reason the insurance question is not a formality.
The property should not change
The seller remains in occupation but has agreed to sell the property in the state it was in, including fixtures listed in the contract.
Removing items that were included, or causing damage while moving out, becomes a dispute at completion when the buyer has already paid and has limited leverage.
A final inspection before completion, where possible, is the practical protection, particularly for properties sold with specific fittings or with work agreed as a condition.
Failure to complete has teeth
Missing the completion date generally triggers financial consequences, which may include interest, costs and ultimately the loss of the deposit and a claim for further loss.
Those consequences apply regardless of the reason, including a lender releasing funds late or a bank transfer arriving after a cut-off time.
This is why conveyancers request funds several days early and why buyers should treat the timetable as fixed rather than as an expectation that can slip.
Questions readers ask
Does the tenancy end when the property is sold?
Usually not. In most systems the agreement continues on its terms and the buyer becomes the landlord, which is why the paperwork must be checked before exchange.
Can I buy a tenanted house to live in myself?
You can, but you need vacant possession as a contractual term and a realistic timetable, because ending a tenancy takes time and follows a prescribed process.
