Legal Q&A: how do I get out of buying a flat I’m due to complete on in six weeks’ time?
Question: My mother has just died and as I am going to inherit her house, I no longer want to continue with the purchase of a flat I had intended to buy.
The problem is that I exchanged contracts some time ago and I am due to complete in six weeks.
How do I get out of buying it?
Answer: Prior to exchange of contracts you could have withdrawn from the purchase at any time. But as contracts have been exchanged there is a legally binding agreement between you and the seller.
If you fail to complete on time the seller’s solicitor can serve you with a Completion Notice requiring you to complete the transaction within 10 working days.
If you do not do so, the seller can rescind or undo the contract, forfeit your deposit and claim damages/compensation from you for any financial loss suffered as a result of the sale to you falling through.
The seller should, however, mitigate their losses by trying to sell the flat to another buyer as soon as possible and must give credit for the deposit you have paid.
Financial loss could include wasted seller’s solicitor’s fees; the amount of any loss if another buyer pays less than you were due to pay; interest payable on the seller’s borrowings, and the like.
You could try to negotiate yourself out of the contract with the seller. Consider employing an experienced property litigator to do this for you.
Alternatively, you could go ahead and buy the flat, then sell it on or rent it out.
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.
If you have a question for Fiona McNulty, please email legalsolutions@or write to Legal Solutions, Homes & Property, Evening Standard, 2 Derry Street, W8 5EE. Questions cannot be answered individually, but we will try to feature them here. Fiona McNulty is a solicitor specialising in residential property.