Unlike other forms of contract which may be made verbally and still enforced, since 27 September 1989, Section 2 of The Law of Property (Miscellaneous Provisions Act) states that;
"a contract for the sale of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or where contracts are exchanged in each."
Therefore, unless ‘all the terms’ of a contract are included in one or two documents and signed and exchanged by the parties privy to that contract, no binding contract for the sale of land can be enforced in England or Wales.
Before 1989 a contract could exist between parties as long as there was a memorandum in writing that contained the terms. This means that it was possible to verbally agree a sale of land as long as the sale terms were agreed in an exchange of letters.
To prevent a misunderstanding and accidentally commit to a sale or purchase before all terms had been properly agreed and all searches, and mortgage offers, etc had been obtained, it was and is still normal practice to head all offer letters and correspondence entered into before formal exchange of contracts as ‘subject to contract’.
Unless otherwise agreed, either party may withdraw from a transaction at any time before the purchase contract has been signed by both parties (or their authorised representatives) and exchanged. At this point a deposit is normally paid in consideration of the agreement and the deal becomes legally binding on both parties in according with the contract terms.
Yesterday
Following recent changes in the Buy to Let market, some investors may find this product less appealing. However, if done correctly, building a buy to let portfolio can be very profitable.
14 days ago
Helping you understand the upcoming changes in stamp duty (SDLT) from April 2025.
UK homebuyers and homeowners are hoping for stability in 2025.
We are hoping that mortgage rates will ease this year, but how drastically depends on inflation trends, swap rates, and the Bank of England’s decisions in which way the base rate should go.
3 Dec 2024
The most wonderful time of the year can easily turn into the most expensive time of the year. Watching the pennies doesn’t mean that the Christmas festivities have to stop, following a few budgeting tips can mean you still have a special Christmas and don’t go into the new year in debt.
29 Nov 2024
December is usually a less desirable time to buy as many people don’t want to move over the holidays. However, prospective buyers do start to look at this time. Selling your home in winter may require a bit of extra attention to showcase your property at its best.
We look at why mortgage rates increased following the Bank of England's choice to reduce the bank rate, and should you fix now?
30 Oct 2024
On 30th October 2024 the Chancellor, Rachel Reeves delivered the Autumn budget which we had previously been warned would be “difficult”. Below we have summarised the main housing points.
23 Oct 2024
In an increasingly cashless society, money is an intangible concept for children to grasp. In the days of coins and notes, kids could see money as something physical you require to purchase goods and services.
In order to help teach your children about money, we have listed some tips below;