If the seller fails to complete after exchange...

middlecat

I have been reviewing my draft contract and noticed that the penalty is a lot more severe when the buyer fails to complete compared to the case when the seller fails to complete.

When the buyer fails to complete, he/she loses the deposit (i.e. 10% of the contract price).

When the seller fails to complete, he/she only needs to return the deposit with some accrued interest.

Please advise if that is correct. If so, it seems rather unfair for the buyer. It seems that the seller can pull out of an exchange without too much of a penalty (apart from the accrued interest)?

GDB2222

The buyer can force specific execution of the sale contract through the courts or is entitled to damages for breach of contract. There was a case of this on MSE about two years ago, and in the end the buyer found somewhere else fairly similar and accepted a substantial sum in damages from the seller.

timmyt

rewiewing your own contract? if you are doing the legals yourself then clearly you are not sufficiently knowldegable to do so - it is the legal process so use a lawyer - and if you are using a lawyer, then rely on them.

G_M

Not very helpful Timmy. My interpretation was that the OP is using a solicitor ( or conveyancer), has been sent the contract to approve/sign, and wishes to understand it.

Nothing wrong with that, in fact blind faith in any professional is unwise.

Of course, if the OP is doing his own conveyancing them, yes, I agree - he clearly does not know enough to be doing it.

Some buyers (and particularly sellers) of course, can quite competantly do their own conveyancing.

timmyt

I am not a Timmy, its a user name.

Well if that is the case, then ask his lawyer as answers on here will not be conclusive - though I'd agree with GDB

middlecat

Hi G_M and timmyt,

G_M is right, I have a conveyancer. I like to understand things properly, after all I am the one signing the contract the living with the consequences. Do they not also say "trust but verified"?

My observation is that the penalty seems rather one-sided in favour of the seller. This actually happened to a cousin in another country. She paid the deposit and the seller changed his mind. He repaid the deposit and walked away scot free!

TrickyDicky101

middlecat wrote: »

My observation is that the penalty seems rather one-sided in favour of the seller. This actually happened to a cousin in another country. She paid the deposit and the seller changed his mind. He repaid the deposit and walked away scot free!

Another country, another set of laws. There's no point trying to correlate what happens elsewhere to what would happen here when it comes to property transactions.

middlecat

TrickyDicky101 - I understand that.

Growing up and prior to entering into my first property transaction, I always thought the story of my cousin's experience seemed really unfair. What surprises me is that the UK contract appears to indicate the same.

The buyer "automatically" loses the deposit if he changes his mind.
The seller does not "automatically" suffer greatly if he changes his mind. The buyer can pursue the seller for damages or a forced sale but this requires additional effort.

G_M

timmyt wrote: »

I am not a Timmy, its a user name.

Well if that is the case, then ask his lawyer as answers on here will not be conclusive - though I'd agree with GDB

You're kidding me! G_M is my real name!

Come on - since Timmy is the name you use, Timmy is the name I'll call you by!

You claim to be a solicitor. Either use your legal knowledge and experience to answer the OP's reasonable question, or...... save the tips of your fingers from wearing out.

kingstreet

G_M wrote: »

Come on - since Timmy is the name you use, Timmy is the name I'll call you by

I expect a penchant for a certain brew from Mr Taylor's famous brewery. 'Landlord' by any chance?

http://www.timothytaylor.co.uk/OurProducts_Landlord.aspx

If timmy won't do, how about TSIKAT? That's short for "The Solicitor Informally Known As Timmy?"

G_M

kingstreet wrote: »

I expect a penchant for a certain brew from Mr Taylor's famous brewery. 'Landlord' by any chance?

http://www.timothytaylor.co.uk/OurProducts_Landlord.aspx

If timmy won't do, how about TSIKAT? That's short for "The Solicitor Informally Known As Timmy?"

Ah! But what an assumption! We only have his word that he is one. His posts certainly wouldn't inspire me with the confidence to become a client.....