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It would not be normal for any Seller to agree to reimburse a Buyer, should the Seller withdraw before Contracts are exchanged. Can I therefore ask who has suggested the wording in clause 1.1? Is this clause proposed to be included in the Sale Contract prepared by your Solicitor?
If you ccould let me know, please.
Its an investment company that is buying at a discount but with a guaranteed completion date with the company covering all the costs ie
survey and legals
Thanks for your reply.
However, is this something the investment company want you to sign now
as opposed to being inserted in the Contract for sale?
yes it a contract now prior to the sales contract
Well, it is not normal for a Seller to have to agree to this- what, for example, if you want to pull out because the Buyer drags their feet/wants a price reduction following any survey/other issue which is highlighted?
If you are happy that the above won't happen, I would suggest that the clause be amended to read "reasonable and proper costs and expenses.." as well as adding the following- "provided that if the Buyer is not ready willing and able to complete the Sale within 30 days (or whatever time frame you wish to insert), then the Seller is free to withdraw from this agreement without any liability whatsoever to the Buyer".
I hope this helps and answers your question.
Yes I agree it is unusual but its an unusual situation.
Thanks for the guidance on the contract so far.
In general is it enforceable in its current format or is it unfair ect.
As I see it if I withdrew they could charge whatever they like I have no way of capping the costs
It is enforceable, but that's why I suggested you add the words "reasonable and proper" so they can only claim the usual costs associated with a purchase- ie Solicitors fees (shouldn't be any more than £500) search fees (normally £250) and Survey fee (if applicable, should be £500 at most).
Of course, these costs are only payable if you have a change of heart, so you need to decide whether to agree to it. As I have said, normally, I wouldn't advise a Seller client to accept any such conditions being imposed whatsoever.
Hope this assists.
Many thanks for your help and I would not usually agree to such a pre contract but "needs must when the devil drives" all I can do is a damage limitation exercise. I have now included the wording suggested
11. The Seller hereby agrees that should the Seller for any reason endeavour to cancel or withdraw from this Agreement the Seller agrees to pay all the Buyers reasonable and proper costs incurred with a residential property transaction.
but as we have now established this is a binding contract how do I deal with this
(first cause in the pre contract)
1. The Seller agrees to sell and the Buyer agrees to purchase the Property for the purchase price.
Q. Can I be sued for all of there loss if I withdraw or just the reasonable and proper costs
(happy to raise another question if its a problem)
I am happy to answer this one further question-
Although this initial agreement is binding, it is not the actual Sale Contract and you are only bound to complete the Sale once the Buyer has paid a 10% deposit and Contracts have formally between exchanged between your Solicitor and the Buyers Solicitor.
You are therefor eonly bound and liable for the cost sincurred by the Buyer
the event of you withdrawing at the pre-Contract stage.
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