Anyone selling a residential property must now seek legal advice before they place the property on the market either with an estate agent or privately. Laws governing the sale and purchase of residential property now require the seller to have a complete contract prepared and available at the office of the estate agent or the seller if no agent is involved for inspection by a prospective purchaser. There are penalties for not having the contract available when the property is advertised, in any way, for sale.
The contract must be available so that the purchaser can see what is in the contract and obtain legal advice before proceeding any further. It must also be available so that the purchaser can sign the contract, if they so wish, and exchange the contract to avoid being gazumped. If the contract is signed and exchanged in this manner then the purchaser has a cooling off period of 5 working days. (explained in detail later)
When the contract is prepared for sale it must be complete in every way except that it leaves blank the details for the purchaser and the sale price. The contract consists of;
> A printed form of “Contract for the Sale of Land” – this form contains all the terms of the sale and has terms that protect both the seller and the buyer and should need no alteration to the printed terms.
> A complete title search issued frbm Property and Land Information must be attached to the printed form of contract.
> A diagram showing the position of any sewer main issued by the sewer authority must be attached to the printed form of contract.
> A certificate issued by the local council showing the zoning of the property and other details must be attached to the printed form of contract (a Section 149 certificate)
> If available a survey and council’s building certificate may also be attached. These two documents are not compulsory where the other listed documents are compulsory attachments.
The Vendor Disclosure Regulations require the seller to disclose certain matters in the contract and to make certain warranties about the property. The disclosure documents are those compulsory documents listed above that must be attached to the contract. If those documents are not attached the purchaser can rescind (cancel) the contract, provided he does so within 14 days of the date of the contract.
The warranties that the seller must make are that:
> The property is not adversely affected by any proposal from certain government departments and or corporations. Your CPC will request you advise if you have received any notices or proposals from any department that affect the property.
> The land does not contain any part of a sewer main
> The Section 149 certificate attached to the contract is a true and accurate record of the status of the property.
> There is no matter about the buildings that would have council issue a demolition order or work order.
If the purchaser finds that the seller is in breach of any of the warranties then the purchaser may be able to rescind (cancel) the contract at any time up until completion.
In order to rescind the contract the purchaser must show that they were; a) not aware of the existence of the matter, and b) the breach by the seller is a failure to disclose the existence of the matter, and c) the purchaser would not have bought the property if they had known of the matter’s existence.
If the purchaser rescinds the contract because of a breach of the vendors warranties any monies paid by the purchaser are refunded and the parties then have no further liability to the other.
If the vendor is aware of any matter that affects the property it must be disclosed in the contract. If the matter is fully disclosed the purchaser may then not have a right to rescind the contract. You should discuss this with your CPC.