Vendor will only sell if he can buy house back - is that legally enforceable?

AnotherJoe

Socksey wrote: »

We had an informal version of this. It made little difference when we sold. .

There's a massive difference between an informal verbal agreement and something in the contract that will cause issues for future buyers and likely is an absolute nono for the mortgage company anyway.

Mgman1965

The seller is mad to insist on such a clause. How old is he ?

As an aside, my parents bought a large plot of land in 1977 when I was 11yrs old and dad built his own house from scratch on it. I loved that house but 5yrs later my father sold it for reasons he never disclosed (think it was due to my mother dying 4yrs after it was built).

From when it was sold I always said I would one day buy it back as it was part of my dad as he built it.

Then, ten years ago it came onto the market :j:j:j. I went to view it almost as a formality and came away shocked and upset. It was unrecognisable, it had been extended massively, internal walls moved and removed and most of the land/garden sold off as Development land and built on leaving it with next to no garden.

Suffice to say, I didn't make an offer or ever want to see it again.

Andypandyboy

I can't see a mortgage company agreeing to this or your solicitor advising you to agree to it.

Sausage11

It seems to me there are two big issues that you need to protect yourself over. The first is that the vendor is not serious and will pull out. The second the complications that would arise and the additional legal fees this will incur.

If you did want to go ahead, would it therefore be possible to have the vendor pay an amount in escrow to cover your pre purchase expenses in case the sale didn't proceed as a result of the vendor pulling out?

Also, you could say that there will be many additional variables that will need to be considered and resolved (use examples brought up in this thread) and this will significantly increase your legal costs associated with purchase. You therefore want these additional legal costs subtracted from the purchase price. You should be able to get an estimate from your solicitor for the likely scale of this additional cost.

davidmcn

AnotherJoe wrote: »

Tlikely is an absolute nono for the mortgage company anyway.

Andypandyboy wrote: »

I can't see a mortgage company agreeing to this

It would be easy enough to set it up in a way which is enforceable against the OP but not against their lender (not that I'm suggesting any of this is a good idea!).

GeorgeDawes_2

A little update on this. Estate agent told him to drop this demand to sell back to him in the event (pre-emption). He then said that he would only like to be notified in writing should we sell. We were so sick and tired of his BS that we stuck to our guns and said no - we're spending over seven-hundred smackeroons and so for that price we should be able to dispose of the property in whatever manner we choose and not have to write anybody letters or tickle anybody's balls. He eventually relented given the urgency to complete before the stamp duty deadline. We exchanged and completed on the same day, before the new rates came in.

He asked for an extra day to shift his stuff out of the flat which if he'd had his !!!! in gear he wouldn't have needed. When we completed and I went round with the keys his fridge was still full of his food. He was going so slowly the next day that he was still there at 9pm and I literally had to tell him to get himself a van to remove the last few bits and pieces (he thought he was going to do multiple runs in his own car). I was gearing up for a confrontation or facing the possibility that he would not move out. Fortunately, by the time I'd gone home and returned with a table, he had just got a large taxi to take away all his stuff. I had to prompt him to give me his set of keys.

Here's a transcript of the communication between the solicitors.

Ours:

Dear A

I have now spoken to my client and she is NOT willing to agree a pre-emption clause in favour of your client. You will appreciate that in any event there is no chance that our clients lender would agree to this or any lender for that matter.

Please could you confirm that your client accepts this and will drop his demand.

Kind regards
J

His:


Dear J,

We have taken our client's instructions and he has informed us that all he requests is that the buyers notify him if the property came back on the market. He has suggested the following letter to be prepared and provided on completion between himself and the buyer:

"Without prejudice always to my obligations to any mortgagee of the Property, as defined below, and in consideration of your agreement to enter into a sale and purchase agreement of even date herewith in relation to the Property, I agree by notice in writing to the Agreed Address and by e-mail to the Agreed E-mail Address, both as defined below, to notify you or procure that you are notified within 7 days of any steps being taken to offer the property for sale.

Property means [address].

Agreed Address means [address] (or such other address as the Vendor may notify to the Purchaser by notice in writing to the Property).

Agreed E-Mail Address means [address] (or such other e-mail address as the Vendor may notify tot he Purchaser by notice in writing to the Property)."

Can you please take your client's instructions on this?

Our client is attending our office at 12pm today to sign all paperwork and if possible could we have their answer by then to discuss with him. Can you also please forward a draft transfer to us for approval and signing.

Kind regards

A

Ours:

Dear GeorgeDawes,

Please see enclosed. Can I have your instructions.

Kind regards
J

Me:


Hi J.

The answer is NO. We are NOT conceding to any formal legally binding clause that they are trying to insert at this 11th hour.

You can tell them that we have no problem informally noting his details and informally contacting him should we ever sell the property in future. However, this will remain at our personal discretion we are NOT going to be bound by any legal clause to do so.

GeorgeDawes

His:

Hello J,

I have seen my client this morning. He is keen to get a letter of the sort suggested to you by A of this office earlier today, and I understand that this has been discussed and agreed between the parties since the outset. I cannot see that there is anything onerous in notifying my client of an intended sale.

In view of the urgency from your client's point of view I would appreciate a reply on this.

I do now hold signed documents and can proceed upon hearing from you. In the absence of a TR1 from your office we have prepared our own.

As my client has travelled from London to South Yorkshire today to sign in order to accommodate the requirement for exchange within the next hour, he is now struggling to get all of his belongings out of the house before the planned completion tomorrow. Although keys can and will be handed over on completion he asks whether he can be allowed an extra day of so in which to remove his belongings and tidy the house for hand over.

In view of the deadline for exchange I hope to hear from you by return.

Regards, N

Ours:

Dear N

I have taken instructions and my client will not agree to the letter or any other form of fetter on the right to sell. Your client must appreciate that it is highly unusual for such a clause or provision to be sought and my client does not feel at all comfortable with this. Such a provision would be fraught with potential difficulties regarding proof of service etc. I have to make the point that in 25 years of practice I have never before been asked to agree to such a provision or the pre-emption clause previously suggested. It is making my clients very nervous .

I really feel that Mr X needs to decide whether he is happy to sell on an unconditional basis. You will appreciate that we have lenders funds which we are holding and which we may have to return if we cannot be certain the sale will complete tomorrow. Because time is not normally of the essence with a property sale we will also need to agree a simultaneous exchange and completion to ensure our client does not fail to complete tomorrow

We hope your client will appreciate our clients concerns to enable the matter to proceed.
Kind regards
J

His:

Hello J,

Thank you for your email.

There is no 'fetter'. It is simply a case of notifying our client if the property is to be re-sold, he then fights with the rest to agree terms. We are told that this was agreed at the outset, so it is disappointing that such a simple requirement is causing problems now.

For myself I have dealt with many rights or pre-emption, options and simple notices such as this - but then I do have a few more years under my belt! I really don't understand why it should be seen as any sort of problem.

I don't follow your reference to time being of the essence, but my understanding was that you had placed a deadline of noon today for exchange and that is why my client travelled north earlier today. If you now want simultaneous exchange and completion then I see no major problem with this.

You did not reply on the matter of a day's grace to remove belongings and tidy up. Please let me have your views.

In the meantime I will seek further instructions.

Regards

N

Ours

Hi N

I am afraid my version of events are a little different. My clients, copied in, have always had reservations about the pre-emption agreement. I spoke to someone at your office, probably A and raised the issue. I was told that your firm did not have instructions to seek such a clause and both I and my clients considered this a dead issue. As far as I can tell the issue of the letter was never raised before today.

An extra day to move out the belongings is fine provided my clients have the keys tomorrow.

You mentioned that you had replied to my earlier letters. Please could you e-mail copies.

The time of the essence point is that if we do not complete tomorrow my client will have to pay the extra 3% stamp duty but will still be bound to complete . Therefore we will need a simultaneous exchange/completion to guarantee completion tomorrow .

Kind regards
J

Malmo

Thank you for coming back and writing the conclusion to your saga, much appreciated. Well done for sticking to your guns.

G_M

Good result.

I'm just amazed you were so understanding about the moving out.

I think I'd have been unscrewing and replacing the locks (I trust you've done that now?), and just locking him out.

No cake for him!

csgohan4

What a muppet,

elsien

Yes, and his solicitors comment about more years under their belt ranks pretty high on the patronising scale as well.