Our 'buyer' withheld the fact they were proceeding with another property

[KatieP]

Our house buyer has pulled out of the deal one week before exchange of contracts. I know this is not unusual – but I they withheld info that would have meant we wouldn’t have accepted their offer in the first place.

The background:

Our buyers had been due to buy another property but the vendor died, so that house passed into probate. Our buyers then decided to buy our house instead – we knew they’d lost out on a place, but our understanding was that the other house was out of the picture. (I even mentioned our worries about the other house when the buyers came to measure-up several weeks ago – but they told us they preferred our house and garden anyway!)

But they sent a text (!) to my husband yesterday – at 1am – to say they were buying the deceased person’s property now instead of ours, as probate was all sorted. (They did not go through our solicitor, and sent an email to our estate agent only saying “There are some complications”, not being clear that they were pulling out.)

We would not have accepted their offer had they disclosed the fact they still had an outstanding offer accepted on another property.

Is there anything we can do to recoup any of our legal costs, or the cost of the full building survey we had done on the place we’re buying? (Which I suspect we will now lose as they were adamant on a quick sale; which we now can’t provide as we no longer have a buyer).

To summarise – our buyers specifcally withheld the fact they still had an ‘open’ offer on anther property, even when given the chance to fess-up about it.

Is there anything we can do?

[R0b]

Unfortunately, no unless you had some kind of legally binding commitment at the start of the process. Currently, there is no law that obliges a buyer to purchase a property once an offer has been accepted and they can pull out right up until exchange of contracts. It seems to be rare, but possible that both parties could agree in writing to purchase the property or if the buyer pulls out then the buyer forfeits the deposit.

You can get home buyers/sellers insurance that covers you for conveyancing fees and surveys etc. up to a certain value but not many people seem to do this depending on the reason of the non-purchase. When I purchased my property not long ago, I think I paid £50 and got cover for 6 months and it was mainly for peace of mind because of uncertainties with COVID. Also, did you not choose to get a solicitor on a no sale no fee basis? Obviously disbursements are still payable however.

I caveat the above by assuming you are talking about a property purchase in England and Wales, because I believe there is a difference if the property is in Scotland where you could recover legal fees if you have passed a certain point and the buyer pulls out.

[efpom]

To answer your question: "Is there anything we can do?" - in a word "No (if the property is in England and Wales, and you do not have an "Option to Purchase" form of Agreement, with the prospective buyer.)

The reason - there was no contract between the prospective buyer and yourself as the seller.

In English Law, the general rule is that a contract forms when there is an offer to buy and an acceptance of that offer. There is no general rule that a contract must be in writing.

However, in English law, a contract for the sale of land and anything attaching to the land e.g. a building MUST be in writing. As no such writing exists, you have no claim in contract against the prospective buyer, or anyone else involved in this prospective sale and purchase.

You will often see the phrase "Sold - Subject to Contract" on Estate Agent boards outside properties, whose true meaning is that the property has not been sold.

[KatieP]

However, in English law, a contract for the sale of land and anything attaching to the land e.g. a building MUST be in writing. As no such writing exists, you have no claim in contract against the prospective buyer, or anyone else involved in this prospective sale and purchase.

Thanks. And I fully understand that the contract itself must be in writing.

I was wondering, however, if the fact our former buyer withheld information about their position – i.e. at best mislead us, at worst lied – might mean there could be some form of legal redress? (Though I guess lying isn't illegal!)

There's also the fact that some stuff was in writing as the former buyer tracked-down my husband, got his mobile number and had been texting us with updates about their position to proceed – right up until the day before suddenly pulling out.

But I guess the whole thing's just pretty despicable and unethical, rather than illegal?

[KatieP]

Thanks so much – I'll double-check re, the solicitor contract being no sale no feee, but I don't think we'd have thought to do that unfortunately.

And I will be taking out insurance when we hopefully find our next buyer!

[ostell]

Don't you just like the Scots system !

[KatieP]

Don't you just like the Scots system !

Yes! Maybe we should move there …!