Contracts signed - completion date missed - 28 days notice of termination.

54and56

Hi,

Curious to know what happens in the following situation:-

• Contracts for sale of residential property signed between vendor and purchaser with (for example) April 4th 2016 as the stated completion date and a €10,000 non refundable deposit paid.
  
• Purchaser isn't able to complete on time due to the sale of their own property falling through.
  
• Vendor is anxious to sell and can't wait for purchaser to resolve their difficulty which could take 3-4 months.
  
• April 6th the vendors solicitor issues 28 days notice of termination of contract as the completion date of April 4th was not adhered to by the purchaser.

Questions:-

1. Can the vendors estate agent recommence marketing the property to potential buyers and invite offers etc during the 28 day notice period or do they have to wait until the 28 day notice period has elapsed before they can start any marketing activity?

2. In practice do vendors actually get to retain the purchasers non refundable deposit when the purchaser fails to complete as agreed?

Cheers.

TheDriver

Any solicitor wouldn't let a purchaser sign a contract until they also have sale one to sign. And on pt 2, not only is depost gone but vendor can sue for remaining amount plus interest

seamus

Question 1 depends on the contract. If the contract prohibits advertising the property then they have to wait until the contract has been terminated. Otherwise there is no restriction.

The auctioneer may be prevented from RE-advertising due to their code of conduct, but there is no legal bar to it.

Henry Ford III

The purchasers in that scenario were ill advised to sign a binding contract and pay a non refundable deposit.

It meant essentially that they were committed to go through with the sale, or lose the deposit and risk litigation against them if they didn't.

MarkAnthony

Only the amount of damages can be retained out of the deposit. The vendors EA in this case is being very much above board by attempting to mitigate damage as much a possible allowing all parties to get out as 'whole' as possible.

4ensic15

MarkAnthony wrote: »

Only the amount of damages can be retained out of the deposit. The vendors EA in this case is being very much above board by attempting to mitigate damage as much a possible allowing all parties to get out as 'whole' as possible.

House deposits are an exception to the penalty clause rules. Purchaser risks losing his deposit and can be sued for losses resulting from his breach of contract. Any competent solicitor would have insisted that the contract be subject to the first sale and if the vendor persisted would have explained the consequences to his own client.

54and56

Thanks everyone, appreciate the feedback.