Have you tried to purchase a property and found yourself in a situation where you have been outbid or ‘gazumped’?Or have you tried to sell a property, and found yourself in a situation where a purchaser pulls out during the transaction?
The remedy to the above may be found in an exclusivity agreement between a seller and a buyer. Whilst this is not currently the norm, a seller can agree to remove a property from the market for a set period of time to allow the specified buyer the exclusive opportunity to purchase the property.
An exclusivity agreement can protect a buyer by:
As exclusivity agreement can protect a seller by:
An exclusivity agreement can enable a buyer to recover their costs if the seller breaches any of its obligations. Similarly, a seller can include a provision within such an agreement to impose a financial penalty or costs provision if the buyer breaches their obligations, although this is more difficult to quantify and enforce.
Neither party is contractually obliged to proceed to exchange of contracts and completion once the exclusivity agreement is in place. However, it does provide the reassurance that neither party will withdraw from the transaction within the period to simply negotiate a better deal with a third party.
Here at Pinney Talfourd LLP we actively address issues which could affect buyers either now or in the future to enable transactions to move swiftly to exchange of contracts and completion. We are therefore able to deal with timeframes and deadlines either imposed or agreed with other parties to a transaction.
We support our sellers in responding to additional enquiries raised by a purchaser’s solicitor, again working toward exchange of contracts and completion as swiftly as possible for all parties.
We ensure that a realistic timescale is provided from the outset to manage the expectations of the parties in light of factors which operate outside of the parties’ control.
We can also assist in drafting the exclusivity agreement itself, to ensure that both parties can meet their obligations under the same to help progress matters smoothly. Please contact our Residential Property Team for more information.
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. The law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.