When it comes to buying or selling a property, there is a crucial point in the process known as the exchange of contracts. This is the point at which both the buyer and seller become legally bound to complete the transaction. However, there may be circumstances that arise after the exchange of contracts that could prompt one party to pull out of the deal. So, what happens when you pull out after exchange of contracts?
Firstly, it`s important to note that pulling out of a property sale after contracts have been exchanged is not a decision to be taken lightly. The consequences can be significant and will depend on the specific circumstances of the situation. In general, the party that pulls out will be in breach of the contract, and there will be financial and legal implications to consider.
If the buyer chooses to pull out after exchange of contracts, they will likely forfeit their deposit and could face legal action from the seller. The seller may also be entitled to keep any costs they have incurred in relation to the sale, such as legal fees and survey costs. In some cases, the seller may also be able to claim damages for any loss they have suffered as a result of the sale falling through, such as if they have already bought another property in anticipation of the sale.
On the other hand, if the seller pulls out after exchange of contracts, the buyer may be entitled to receive their deposit back, along with any costs they have incurred in relation to the sale. However, the buyer may also be able to claim damages from the seller if they have suffered any losses as a result of the sale falling through, such as if they have already sold their own property in anticipation of the purchase.
It`s worth noting that there may be some circumstances where pulling out after exchange of contracts is justified and legal. For example, if the seller fails to disclose important information about the property, such as structural issues or disputes with neighbours, the buyer may have the right to pull out of the sale and recover their deposit. Similarly, if there is a significant change in circumstances, such as if the buyer loses their job or the seller becomes unable to complete the sale due to illness, this may also justify pulling out of the sale.
In any case, it`s important to seek legal advice before making any decisions about pulling out of a property sale after exchange of contracts. A knowledgeable solicitor can provide guidance on the specific legal implications of the situation and help to ensure that any decision made is in the best interest of all parties involved.