Exchange of Contracts Archives

Jul 6

Can we withdraw our offer?

My partner and I have made an offer on a house which has been accepted and we would due to exchange contracts next week. She has now said it is too soon for us to live together but I can’t afford to buy on my own. Can we walk away from this, or is it too late?

Fortunately, it is not too late as you may withdraw from any transaction prior to contracts being unconditionally exchanged. Despite your being virtually on the point of exchanging contracts, it is possible for either party to withdraw from the transaction. You are, therefore, free to withdraw without any obligation to indemnify the seller for any of his abortive costs or for any inconvenience caused.

A late withdrawal like this often infuriates the innocent party as they have no recourse to make any claim for the recovery of their abortive costs. All you can do is apologise to the seller for your late withdrawal, which is due to a change in your personal circumstances which are clearly beyond your control.

Jun 2

Can we withdraw our offer?

Nov 16

Can I charge previous owner to clear rubbish?

The day I moved into my new home the keys were missing to the detached garage. The Vendor’s Solicitor has now produced the key and I have found the garage is full of rubbish left by the previous owner. I will need to hire a skip to dispose of it all. Can I send the previous owner the bill for this?

Sadly, this is far too common an occurrence. It is my firm’s standard procedure to raise a specific preliminary enquiry in the conveyancing process to establish that all keys will be made available to all doors and, indeed, windows for this very purpose. Far too often garages are left without a key, but full of rubbish.

If the query had been raised then any missing keys would have to be replaced and most importantly the Buyer would have the opportunity to inspect all parts of the property prior to exchange of contracts thus ensuring that there are no such surprises in store for you on completion.

Another important question to raise in the preliminary stages is to obtain the Vendor’s confirmation that all rubbish will be removed from all parts of the property. In such circumstances should you find the garage full of rubbish following completion it would be entirely correct for you to look to your Seller to reimburse you for the costs of disposing of all rubbish left by the Seller.

It is essential you ensure that you inspect all parts of the property prior to exchange of contracts and that you establish keys are available for all doors and windows. If the Seller intends to leave items at the property then ensure that these are of value and benefit to you rather than your being left with the privilege of disposing of their rubbish.

Nov 16

Can I stall on house contract exchange?

I have made an offer on a house and am due to exchange contracts next week. Incredibly the house I have really wanted for years has suddenly come on the market with a different Agent. Can I stall on contract exchange to give me time to decide on the second property, and will I be allowed to pull out of the first sale?

Unless contracts have actually been exchanged then either party is entitled to withdraw. There are a number of ways that a Buyer can stall, but this does raise the question of whether one should be open and honest with your Seller.

If you are genuinely undecided because your preferred property has now become available perhaps you should advise your Sellers of this fact.

It would take your existing Seller some time to find an alternative Buyer in any event and at least he would be aware of the prospect of your not actually proceeding.

My view is that provided you are open and honest with those with whom you are dealing then should you withdraw you have at least been open with your Seller.

You can of course withdraw at any time up to the point when contracts are unconditionally exchanged, but to do so at the last minute without warning is a bitter pill for your Seller to swallow.

Nov 16

Can I make a conditional property offer?

I want to make an offer on a house that is about 60 years old and needs a new kitchen extension. To protect myself can I make it conditional that contracts are only exchanged subject to the granting of Planning Permission for the extension.

It is unusual for sales of residential property to be conditional upon the receipt of Planning Permission as the seller will be more concerned with ensuring that the sale has been secured and a conditional exchange of contracts does not give the seller that comfort.

The buyer could, of course, apply for Planning Permission on a property that he doesn’t yet own as you do not need to be the owner of a property to apply for Planning Consent on it. You simply need to notify the Planning Department on part of the application form that you are not the actual owner.

If an application for Planning Permission has been lodged but its consideration by the local Planning Authority has to go to Committee or Appeal for whatever reason, then the seller may well agree a conditional exchange of contracts on the basis that the planning process is relatively far advanced.

Mar 31

Worry free way to sign property contracts

I am buying a new house, but will be abroad on an extended business trip when final contracts are due to signed. What should I do?

You are never sure when contracts are likely to be exchanged and a completion date agreed but, naturally, it is not a good idea to be abroad when you are due to complete.

However, in order to facilitate an exchange of contracts in your absence you can either visit your Solicitor before leaving for your business trip and sign all documentation well in advance – leaving strict instructions as to the basis on which the Solicitor is authorised to proceed in your absence – or you may grant a Lasting Power of Attorney dealing with your Property and Affairs, restricting the authority to the appointed Attorney to simply deal with the signing of all documentation relating to your purchase of your new property.

Unless there are major outstanding items on which your Solicitor will need your specific instructions, or indeed no papers have in fact been received before you go away, then it is normal for you to give your Solicitor strict instructions as to the basis on which you would be happy to proceed.

If you are only buying a property and are in no hurry to move in, then ensure your Solicitor has the relevant amount of money made available to him to allow him to complete on your behalf if you are still abroad.

Oct 22

Who pays post contracts exchange damage?

Having exchanged contracts on a house I am buying I now discover there are some tiles missing from the roof and in the recent heavy rain it has caused water damage to the ceiling in one of the bedrooms. Is this now my responsibility, or can I insist on the vendor getting the roof repaired and the damage made good before I move in?”

This all depends on the terms of the Sale Contract. You are entitled to purchase the property in the same condition as existed when you viewed and, in particular, on exchange of contracts. If the seller remains liable for insuring the property then he may be able to claim for the damage on his own insurance.

If the contract specifies you are responsible for insuring the building on exchange of contracts then any such insurable damage would be your responsibility. On the basis that this damage has happened since exchange of contracts – and clearly not caused by the seller – then arguably it is an insured risk and the person responsible for insuring from exchange will be responsible and will have to make a claim under the appropriate policy.

Oct 22

Could Bridging Loan save dream house buy?

We have had an offer accepted on our house and were due to exchange contracts last week only for our buyer to withdraw suddenly from the sale of our property. We have placed our property back on the market, but are desperate not to lose the property we wish to purchase. Is there anything we can do to convince our vendor not to look for another buyer? Should we take out a Bridging Loan?

Your success in securing the house of your dreams lies entirely in the hands of your seller. If the seller is willing to wait a little longer in the hope that you can find an alternative buyer then you have a chance of rushing through a subsequent sale to a new purchaser and secure the house.

However, if you are under pressure to commit to the purchase while you still have no buyer for your existing property then this can only be done by arranging finance for the full purchase price of the new property leaving you with, effectively, two properties and, probably, two loans.

It is unlikely that any financial institution will look favourably upon providing you with “open bridge” facilities in the current financial climate. This is where the funds are provided for the full purchase price of the new property while your existing property remains unsold, and is a dangerous step as there is no determining when the loan will be repaid.

The simple advice would be – do not consider an “open” Bridging Loan”!

Oct 19

Apologise to seller – and walk away

My partner and I have made an offer on a house which has been accepted and we would due to exchange contracts next week. He has now said it is too soon for us to live together but I can’t afford to buy on my own. Can we walk away from this, or is it too late?

Fortunately, it is not too late as you may withdraw from any transaction prior to contracts being unconditionally exchanged. Despite you being virtually on the point of exchanging contracts, it is possible for either party to withdraw from the transaction. You are therefore free to withdraw without any obligation to indemnify the seller for any of his abortive costs or for inconvenience caused.

Jul 11

Should I check the central heating system?

I am buying a property that was built in the 1980s. Should I check the condition of the central heating?

Of course. Other than the structure of the building, the central heating system is the most expensive component in any property and you are deemed to buy a property in the full knowledge of its state and condition.

I would always advise a purchaser to have the central heating system inspected by a central heating engineer prior to exchange of contracts in order to ensure it is in good working order.

Should your Engineer’s Report condemn the system then you would have identified that it needs either replacing or substantial repair, before making a legal commitment to purchasing the property. This would enable you to re-negotiate the price.

Should you complete the purchase and then arrange for the system to be serviced only to find out that the system is condemned, it would then be too late for you to claim any recompense against the seller, or re-negotiate the purchase price.

* Emyr Pierce is Managing Partner of Emyr Pierce Solicitors in Rhiwbina, Cardiff, Western Mail Conveyancer of the Year, specialising in Domestic and Commercial Property. Contact www.emyrpierce.co.uk or email law@emyrpierce.co.uk