Lock out agreement

magicmcone

Hi there,

I am to make an offer on a property and have been told that due to the seller having two people who failed to go ahead after their after being accepted, they are looking for a lockout agreement to be signed after the offer being accepted and would include a payment from my side in order to provide security to the seller. 

All considered, I would not have problem to do so, as intend to purchase and believe that I’m in a comfortable position to proceed, but not sure if the agreement provided leaves me vulnerable.

What do you guys think?

Many thanks in advance 

SDLT_Geek

There is no right to a refund of your £2,000 if the seller decides not to sell the property to you!  To me, it looks like a lot of money for not very much. 

The "lockout period" referred to is not specified.  Is this only part of what is proposed?  It not, seems wholly defective.

magicmcone

SDLT_Geek said:

There is no right to a refund of your £2,000 if the seller decides not to sell the property to you!  To me, it looks like a lot of money for not very much. 

The "lockout period" referred to is not specified.  Is this only part of what is proposed?  It not, seems wholly defective.

I though “The seller is unable to give vacant possession” covered me if they decide not to sell, doesn’t it?
Agree about the period. Will ask to provide clear timeframes.

Thanks for your help. 

canaldumidi

These types of agreements are so rare that it's the first that's come up on the forum in the 10 odd years I've been here. For a reason.

There is potential for huge disputes (to the advantage of solicitors who earn fees!) over interpretation of those clauses. I would not advise agreeing.

As an example,you can get your money back if 'the seller is unable to provide satisfactory answers to enquiries'. Define satisfactory!

We frequently DO see here arguments over Enquiries. Buyer's solicitor requests A. Seller's solicitor says 'Don't know', or B. Buyer's solicitor says: "Not good eough we need clear answer." Seller says: "It's not critical"...............

GDB2222

The concept of a lockout agreement sounds quite good to me. I would like to know whether this particular version has been professionally drafted, because it seems really rather woolly and one sided?

If the amount being demanded from the OP were say £200, I would suggest just signing it. But for £2000, as a minimum, the seller ought to be paying for a properly drafted agreement, and the OP should be getting some paid for advice.

trix-a-belle

Do you know why the previous 2 offers fell through? That should surely play some part in whether you sign or not, I see there is structural defect as a refund point but what else could the survey throw up on it, would the seller be willing to negotiate or not because they already have you committed?

Slithery

A terribly worded agreement.

What is the meaning of 'satisfactory'? How about 'structural defect' or 'promptly'?

Without detailed meanings of each of these terms it means nothing.

jimbog

Could you agree, but ask for a similar agreement whereby they need to pay £2000 deposit to you which will be retained if the seller decides not to sell?

theoretica

What if the searches turn up something horrible?  If the mortgage valuation comes in undervalue but they will give you a mortgage? 

magicmcone

Thanks all for the input.

I think I will instruct solicitor prior to the offer being accepted so they can hopefully handle that request for me.

Probably better to lose some money in solicitor fees than handing £2000 without much protection there.

Thanks all again.

eddddy

As others have mentioned, you need to quiz the EA on why the other 2 sales fell through.

In the worst case, does the seller ask for a £2k deposit from each buyer - then 'drop a bombshell' which makes each buyer withdraw - and the buyer earns £2k each time for doing nothing?

jimbog said:

Could you agree, but ask for a similar agreement whereby they need to pay £2000 deposit to you which will be retained if the seller decides not to sell?

To make the agreement fair, there would need to be a list of circumstances which would result in the seller losing their deposit...

• The seller has decided not to sell to the OP
• The seller has made a misleading statement about the property - and as a result the the OP is withdrawing
• The seller has omitted to disclose material information - and as a result the the OP is withdrawing
• The seller is introducing new conditions to the sale, which were not previously disclosed
• The seller is not ready to exchange contracts by xx/xx/2022