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Case law: Court clarifies when seller of land is ‘ready, willing and able’ to complete sale

Sellers of land must understand the steps they need to take to prove they are ready, willing and able to complete the sale on the completion date – including compliance with a requirement to give vacant possession of the site – following a recent ruling.

January 2019

This update was published in Legal Alert - January 2019

Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.

An agreement to buy land required vacant possession ‘on completion’. The land was occupied by several licensees whose licences could be ended with short notice. They all agreed that when required, they would vacate the site within a couple of days.

There were problems with the transaction and eventually the seller served Notice to Complete on the buyer, requiring completion within 10 days. When that did not happen, the seller purported to rescind the agreement and keep the buyer’s deposit.

The buyer argued that the Notice was not valid because the seller was not ‘ready, willing and able’ to complete at the time it was given. It said there were industrial boilers, shipping containers and other large items of equipment on the site at that time, and it would not have been possible for the seller to clear the site of these items (and generally) within the 10 days in the Notice. It also pointed out that the seller had made no effort to begin clearing the site during the 10 days.

The seller argued that its agreement with the licensees meant it could have given vacant possession on completion, so it was ready, willing and able to complete when it gave the Notice.

The High Court ruled that the buyer had not been clear or consistent as to whether or not it required vacant possession – it had indicated at times that it might take over the site with the existing licensees in situ.

This means that the steps the seller had taken, and the court’s findings that the licensees could have vacated the site within two to five days, showed that the seller was ready, willing and able to provide vacant possession if required, at the time it gave the Notice.

The Court also found that the buyer was having trouble finding funding, and had only put forward its argument as a delaying tactic. The seller’s purported rescission of the agreement was, therefore, effective, and the seller could keep the buyer’s deposit and sell the site on to a new buyer.

Operative date

  • Now

Recommendation

  • Sellers of land should ensure they understand the steps they must take to prove they are ready, willing and able to complete their sale, including compliance with a requirement to provide vacant possession of the site, on the completion date, following a recent ruling

Case ref: Cantt Pak Ltd v Pak Southern China Property Investment Ltd [2018] EWHC 2564

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