(Not) ready, willing and able to complete?

(Not) ready, willing and able to complete?

The sale and purchase of land and property in England and Wales must comply with the prescribed legal formalities - otherwise, it may be unenforceable in law. A recent ruling following a commercial dispute concerning a completion notice - and whether the seller was ‘ready, willing and able’ to complete the transaction - is important reading for those in the legal and construction industries and the commercial property sector.

Readers will know that an agreement for the sale of land and property is not legally binding unless it is set out in writing, signed by all parties and incorporates the terms expressly agreed between them (section 2 of the Law of Property (Miscellaneous Provisions) Act 1989).

As the transaction progresses, the purchaser’s legal advisors will undertake full commercial due diligence. This includes a thorough investigation of title to the land and property, including checks to see what, if any, restrictive covenants affect the land as well as ensuring that all rights of way, services etc are or will be in place. Where there are title defects, such as an absence of a legal easement or missing title document, title indemnity insurance can cover the risk to enable completion to take place promptly.

Preparations for completion can then be made. However, what if completion is delayed and a Notice to Complete needs to be served? What are the legal implications when the land is not vacant where a Notice has been served? In the case of Cantt Pak Ltd v Pak Southern China Property Investment Ltd [2018] EWHC 2564, the High Court had to consider an issue which is critical in every land sale and purchase, that is, when the seller of land is ‘ready, willing and able’ to complete.

Notice to Complete

Once contracts are exchanged, the parties are bound to complete the purchase on the contractual completion date. If completion does not take place, the party not in breach can serve Notice to Complete on the defaulting party which makes time of the essence.

Crucially, the party giving Notice must itself be ‘ready, able and willing’ to complete under the contract of the Standard Commercial Property Conditions (2nd Edition) (‘SCPC’ 8.81), i.e. that it could be ready, able and willing to complete were it not for the default of the other party.