Buying Commercial Property · glossary
The contract rate is the interest rate a property contract sets for late completion. If completion is delayed, the party causing the delay usually pays compensation at that rate, worked out on the price, for each day of delay. The Standard Conditions use the Law Society's rate, 4 points above Barclays base rate. A contract can set its own.
The interest rate the contract sets for late completion: 4% a year above the Bank of England base rate. A party that completes late pays it on the balance until the money arrives. It makes up for lateness, but it does not end the contract. Particulars: Contract Rate · Chapter 7
Explained in Chapter 7, The Sale Contract, of Buying Commercial Property.
The price is £4,000,000, “exclusive of VAT”. The deposit is £400,000, a tenth of the price. The rest, the balance, is £3,600,000, paid at completion on 17 June. Late payment carries interest at the Contract Rate, which is 4% a year above the Bank of England base rate.Read Chapter 7, The Sale Contract →
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It is the interest rate in your contract for late completion. Most house contracts use the Standard Conditions of Sale, which set it at the Law Society's interest rate: 4 points above Barclays base rate. Your conveyancer can tell you the rate in your contract.
Under the Standard Conditions, yes: the Law Society's rate is 4 points above Barclays base rate. The parties can agree a different rate. The training contract in this edition uses 4 points a year above the Bank of England base rate.
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