Buyers legal rights?

Legacy_user

A friend had an offer on a house accepted and both parties signed contracts last December. The completion was held up very slightly by Land registry (just a few days) but my friend is still keen to buy the property. However the vendor has now noticed that a property similar to theirs sold for £20,000 more and now wants more money and if they don't get it they say they will refuse to sell it.
In the last week or so my friend offered reluctantly to increase their bid by £6,000 but this was refused and the vendor has now offered to pay £1,000 towards any costs my friend has incurred.

Surely since contracts have been exchanged the vendor is legally obliged to sell the property. Can anyone advise what my friends rights/options are in this case. I think her solicitor wants to pursue the matter in court but she is wondering what the chances are of her winning.

I've never heard of this happening before and I'm amazed the vendor is doing this as they are now currently having to pay for 2 properties as they have moved to their new home.

Raggie

If contracts have been exchanged then your friend should not have offered any further monies.

A contract of sale is just that.

There are large penalties for not completing at this point, from memory I think 10% of purchase/sale price.

Let the solicitor do their job, and take it to court, if as I said contracts are in place then it is as near to water tight as any case can be.

Jorgan_2

From waht you have said, your friend hasn't yet exchanged contracts. Signing the contracting isn't the same as exchanging, although many people do confuse the two.

I'd be surprised if she would get anything from a court case. Up until contracts are exchanged the buyer or seller can withdraw, try to re-negotiate etc. If your friend had exchanged the seller would be legally bound to sell at the agreed contract price. If they have exchanged, the solicitor wouldn't have to got to court as they are in breach of contract.

Raggie

good point Jorgan.. I assumed form the OP that they had exchanged.. from reading it again they may have just signed them..

not the same thing at all..

NervousYetFeisty

Raggie wrote:

I assumed form the OP that they had exchanged.. from reading it again they may have just signed them..

not the same thing at all..

(from an ignorant, lamb-to-the-slaughter ftb)

What's the difference?

Bossyboots

NervousYetFeisty wrote:

(from an ignorant, lamb-to-the-slaughter ftb)

What's the difference?

The formal exchange of contracts is the point where the deposit is paid to the seller's solicitor and the transaction is legally binding.

Just signing the contract is simply that. It is signed but has no legal status until the actual exchange takes place.

jenniferpa

On the other hand, why would the vendor offer the buyer £1000 to go away if they hadn't exchanged? Also if the buyer's solicitor wants to persue it in court, it does sound as if contracts have been exchanged.

Jennifer

Bossyboots

To be honest the first post doesn't make much sense. In the circumstances outlined, when you exchange contracts the completion date is set and cannot be changed. Also, the terms of the contract cannot be changed and the buyer's solicitor should have told them this and told them they did not need to offer anything else. The seller cannot just refuse to sell, they have entered into a legally binding contract. I cannot see how the Land Registry could have been responsible for holding up completion unless they failed to promptly return the bankruptcy search but even this issue needs clarifying. If the seller failed to complete by the completion deadline inthe contract, the buyer's solicitor should have issued a Notice to Complete and compensation would be payable on a daily basis until completion. If completion then does not take place, the buyer has recourse in the courts.

If the seller is now seeking to break the contract then the buyer needs to work out whether the £1000 offered is adequate compensation and if it covers any financial losses they have incurred. Their solicitor should be able to offer some guidance on this.

The crux of this situation though is whether or not contracts were actually exchanged.

silvercar

Sounds to me that contracts haven't been exchanged, merely signed.

The vendor realises they could get a lot more money for the property so wants to re-market at a higher price. The vendor feels a certain responsibility to the buyer and is offereing to make a payment of £1,000 in view of the legal and survey costs the buyer would have incurred in persuing the property.

So on the one hand the vendor is being greedy in trying to get a higher price for their property due to market changes. On the other they are trying to be Mr NiceGuy and paying the existing buyer's costs.