Question: My partner and I recently put in an offer on a flat in central London which was accepted and we exchanged solicitors' details. All was progressing well with our mortgage application, when the agents told us the vendors had accepted another offer.
© Merrily Harpur
Given we had a verbal agreement and a written agreement by way of exchanging solicitors' details, what legal recourse do we have? I do not want to view any more properties for fear of something similar happening. Can we sue for emotional damages?
Answer: The Law of Property (Miscellaneous Provisions) Act 1989 requires all contracts for the sale of land to be made in writing and signed by the parties or on behalf of the parties. The contract must incorporate all the terms which have been expressly agreed by the parties.
The purpose of having the contract in writing is to ensure certainty when dealing with the sale of land. The solicitor for the seller usually prepares two identical copies of the contract. Once the buyer's solicitor approves the contract, the buyer and the seller each sign a copy of the contract and when they are both ready to proceed, their solicitors will exchange contracts making the contract binding.
Though you have accepted the buyer's offer and you and the buyer have swapped the details of your respective solicitors, that does not constitute a binding contract and therefore you cannot sue the seller.
Until contracts are exchanged either party is free to withdraw without penalty. This can be very unfair but is the risk you will have to take if you offer to buy another property. Do not make any firm plans until contracts are exchanged.
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Fiona is a partner in the residential real estate team at Thring LLP (www.thrings.com).
These answers can only be a very brief commentary on the issues raised and should not be relied on as legal advice. No liability is accepted for such reliance. If you have similar issues, you should obtain advice from a solicitor.