A moral dilemma

Our lawyer Fiona McNulty looks at the issue of who should wear the costs when a buyer pulls out of a sale
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© Malcolm Willett (www.willett-ink.co.uk)
Question: I was just about to exchange contracts on an apartment when I got cold feet and pulled out. My seller is really mad and I have been asked to pay the seller’s wasted costs. I have also received a bill from my solicitor, even though I am not buying the flat any more. I do feel bad but do not see why I should pay everyone’s costs.

Answer: When you first instructed your solicitor you should have received a Letter of Engagement setting out the terms and conditions relating to the work your solicitor was going to do for you. Unless your solicitor agreed not to charge you if your purchase failed to complete you are responsible for your solicitor’s fees for the work carried out on your behalf, whether or not you end up buying the apartment.

The seller’s solicitor will charge the seller for their work and I expect that the managing agents charged the seller for replying to freeholder’s enquiries. There is no legal obligation on you at all to pay the seller’s solicitors costs, although I am sure that the seller may consider that morally you should pay their costs because they will be disappointed that the sale of the apartment has fallen through and that they have incurred unnecessary expense as a result.

However, provided there is not too much of a delay in finding another buyer the same replies given by the managing agents can be used again, provided they are not out of date. Some of the other paperwork can be reused, provided it is updated accurately, so all is not lost for the seller.

What's your problem?

If you have a question for Fiona McNulty, email legalsolutions@standard.co.uk. We regret that questions cannot be answered individually.

Fiona is a partner in the property team at Thring Townsend Lee & Pembertons Solicitors www.ttuk.com.

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