Ideas on how to legally word a "get-out" clause?
Discussion
Hello guys,
First off, I'm not looking for legal advice as we already have a solicitor who seems very competent. However I would like ideas from you guys on wording if possible, and then take this to the solicitor for a final draft.
We are purchasing a bungalow with a lot of land at the back. The house is unoccupied and the seller is very motivated in selling quickly. There are no agents involved. Our architect has said planning for a four-bed house at the back might be possible but no guarantees can be made.
We've made an agreement to purchase the house but with the proviso that we obtain planning permission first. The trouble is the council planning department at the pre-application meeting would not give any indication if they would approve unless they get a full application from the architect (which costs around £2,500 not including the architect's fees).
So to this end, the seller has agreed to take a deposit from us on exchange of contracts but before completion whilst we apply for planning, and also to sign a "get-out" clause that means that if, for any reason, we don't get planning permission, he has to return our deposit before completion.
He has agreed a long completion time of 6 months in order for us to get the planning application in and approved. That way, I'll not be annoyed at losing £thousands on planning fees and architect fees.
I want the wording to be iron-clad and I would also insist on a clause that states the seller is liable for our legal fees if we have to claim against him if he tries to wriggle out. For instance, he could argue that if we get turned down for construction of a four-bed dwelling we could try again for a three-bed dwelling and that he doesn't have to return our deposit until we resubmit our application etc etc.
Our solicitor has so far been excellent so I trust him to do a good draft but I'd appreciate some of the intelligent folks on this sub-forum to perhaps give me some wording ideas that will be iron-clad and that I can take to the solicitor for his approval.
Thanks
First off, I'm not looking for legal advice as we already have a solicitor who seems very competent. However I would like ideas from you guys on wording if possible, and then take this to the solicitor for a final draft.
We are purchasing a bungalow with a lot of land at the back. The house is unoccupied and the seller is very motivated in selling quickly. There are no agents involved. Our architect has said planning for a four-bed house at the back might be possible but no guarantees can be made.
We've made an agreement to purchase the house but with the proviso that we obtain planning permission first. The trouble is the council planning department at the pre-application meeting would not give any indication if they would approve unless they get a full application from the architect (which costs around £2,500 not including the architect's fees).
So to this end, the seller has agreed to take a deposit from us on exchange of contracts but before completion whilst we apply for planning, and also to sign a "get-out" clause that means that if, for any reason, we don't get planning permission, he has to return our deposit before completion.
He has agreed a long completion time of 6 months in order for us to get the planning application in and approved. That way, I'll not be annoyed at losing £thousands on planning fees and architect fees.
I want the wording to be iron-clad and I would also insist on a clause that states the seller is liable for our legal fees if we have to claim against him if he tries to wriggle out. For instance, he could argue that if we get turned down for construction of a four-bed dwelling we could try again for a three-bed dwelling and that he doesn't have to return our deposit until we resubmit our application etc etc.
Our solicitor has so far been excellent so I trust him to do a good draft but I'd appreciate some of the intelligent folks on this sub-forum to perhaps give me some wording ideas that will be iron-clad and that I can take to the solicitor for his approval.
Thanks
I think you should be giving the solicitor your requirements, not the wording. The wording is the solicitors responsibility and what they might be liable for if the wording of the contract isn't in line with your requirements.
PHers may be better able to help you to identify your requirements around what should be considered eg. what happens if planning is declined, what happens if planning is agreed subject to conditions you're not happy with etc.
Other PHers may have experience of exactly this type of situation.
PHers may be better able to help you to identify your requirements around what should be considered eg. what happens if planning is declined, what happens if planning is agreed subject to conditions you're not happy with etc.
Other PHers may have experience of exactly this type of situation.
This is an odd one. You say the seller is very motivated in selling quickly, but also that he has agreed a completion time that would take up until Christmas.
Equally, you are going to be paying for planning permission which would greatly increase the value of his land (as it would not yet be yours (as Mattt has highlighted).
I also agree with LeoSayer in that if you give your solicitor specific wording then this is not their responsibility.
Anyway, I think you are looking for something along the lines of a fair wording, such as this:
"The Vendor fully acknowledges that this offer is entirely conditional on planning permission being granted for a four bedroom dwelling house within the curtilage of the property.
Any and all deposit placed by the purchaser shall be held in escrow by the Vendor's solicitor and returned immediately to the Purchaser should said planning permission not be granted to the reasonable satisfaction of the Purchaser.
For the avoidance of doubt the Vendor warrants and undertakes to keep the Purchaser fully indemnified against any and all legal and ancillary costs involved in recovering said deposit(s) and the Purchaser warranties and undertakes to waive any right or claim against the Vendor for costs involved in an unsuccessful planning application."
Equally, you are going to be paying for planning permission which would greatly increase the value of his land (as it would not yet be yours (as Mattt has highlighted).
I also agree with LeoSayer in that if you give your solicitor specific wording then this is not their responsibility.
Anyway, I think you are looking for something along the lines of a fair wording, such as this:
"The Vendor fully acknowledges that this offer is entirely conditional on planning permission being granted for a four bedroom dwelling house within the curtilage of the property.
Any and all deposit placed by the purchaser shall be held in escrow by the Vendor's solicitor and returned immediately to the Purchaser should said planning permission not be granted to the reasonable satisfaction of the Purchaser.
For the avoidance of doubt the Vendor warrants and undertakes to keep the Purchaser fully indemnified against any and all legal and ancillary costs involved in recovering said deposit(s) and the Purchaser warranties and undertakes to waive any right or claim against the Vendor for costs involved in an unsuccessful planning application."
JulianPH said:
This is an odd one. You say the seller is very motivated in selling quickly, but also that he has agreed a completion time that would take up until Christmas.
Equally, you are going to be paying for planning permission which would greatly increase the value of his land (as it would not yet be yours (as Mattt has highlighted).
I also agree with LeoSayer in that if you give your solicitor specific wording then this is not their responsibility.
Anyway, I think you are looking for something along the lines of a fair wording, such as this:
"The Vendor fully acknowledges that this offer is entirely conditional on planning permission being granted for a four bedroom dwelling house within the curtilage of the property.
Any and all deposit placed by the purchaser shall be held in escrow by the Vendor's solicitor and returned immediately to the Purchaser should said planning permission not be granted to the reasonable satisfaction of the Purchaser.
For the avoidance of doubt the Vendor warrants and undertakes to keep the Purchaser fully indemnified against any and all legal and ancillary costs involved in recovering said deposit(s) and the Purchaser warranties and undertakes to waive any right or claim against the Vendor for costs involved in an unsuccessful planning application."
Nothing in this wording prevents the vendor selling to someone else.Equally, you are going to be paying for planning permission which would greatly increase the value of his land (as it would not yet be yours (as Mattt has highlighted).
I also agree with LeoSayer in that if you give your solicitor specific wording then this is not their responsibility.
Anyway, I think you are looking for something along the lines of a fair wording, such as this:
"The Vendor fully acknowledges that this offer is entirely conditional on planning permission being granted for a four bedroom dwelling house within the curtilage of the property.
Any and all deposit placed by the purchaser shall be held in escrow by the Vendor's solicitor and returned immediately to the Purchaser should said planning permission not be granted to the reasonable satisfaction of the Purchaser.
For the avoidance of doubt the Vendor warrants and undertakes to keep the Purchaser fully indemnified against any and all legal and ancillary costs involved in recovering said deposit(s) and the Purchaser warranties and undertakes to waive any right or claim against the Vendor for costs involved in an unsuccessful planning application."
As above, OP needs to provide his requirements to his solicitor to draft and if his solicitor gets the drafting wrong, he makes a claim against the solicitor/the solicitor's PI cover.
85Carrera said:
Nothing in this wording prevents the vendor selling to someone else.
As above, OP needs to provide his requirements to his solicitor to draft and if his solicitor gets the drafting wrong, he makes a claim against the solicitor/the solicitor's PI cover.
I know, that is why I said he needs his own solicitor to draft this. I was just trying to give a steer as to the point raised.As above, OP needs to provide his requirements to his solicitor to draft and if his solicitor gets the drafting wrong, he makes a claim against the solicitor/the solicitor's PI cover.
Changing it to this would afford some cover on your point, though.
"The Vendor fully acknowledges that in accepting any deposit he is bound to complete the sale under the terms contained within this contract and that this offer is entirely conditional on planning permission being granted for a four bedroom dwelling house within the curtilage of the property.
Any and all deposit placed by the purchaser shall be held in escrow by the Vendor's solicitor and returned immediately to the Purchaser should said planning permission not be granted to the reasonable satisfaction of the Purchaser.
For the avoidance of doubt the Vendor warrants and undertakes to keep the Purchaser fully indemnified against any and all legal and ancillary costs involved in recovering said deposit(s) and the Purchaser warranties and undertakes to waive any right or claim against the Vendor for costs involved in an unsuccessful planning application."
Or something like that!
This is a fairly standard conditional contract, conditional upon achieving a satisfactory planning permission, subject to a long stop date.
This is not something that is possible for you to word and your solicitor to simply tweak and implement. You are looking at going from a sale contract of a couple of pages long, to one which is likely to be over 30 pages long. It is not as simple as "adding a few lines". There are many obligations involved which make this a whole lot more complicated, to a layman at least.
This is not something that is possible for you to word and your solicitor to simply tweak and implement. You are looking at going from a sale contract of a couple of pages long, to one which is likely to be over 30 pages long. It is not as simple as "adding a few lines". There are many obligations involved which make this a whole lot more complicated, to a layman at least.
Muncher said:
This is a fairly standard conditional contract, conditional upon achieving a satisfactory planning permission, subject to a long stop date.
This is not something that is possible for you to word and your solicitor to simply tweak and implement. You are looking at going from a sale contract of a couple of pages long, to one which is likely to be over 30 pages long. It is not as simple as "adding a few lines". There are many obligations involved which make this a whole lot more complicated, to a layman at least.
^^^ This. 100% agreed.This is not something that is possible for you to word and your solicitor to simply tweak and implement. You are looking at going from a sale contract of a couple of pages long, to one which is likely to be over 30 pages long. It is not as simple as "adding a few lines". There are many obligations involved which make this a whole lot more complicated, to a layman at least.
Bog standard conditional contract, your solicitor should be able to write it, if he can’t you have the wrong lawyer.
If it can wait until later, I will cut and paste our standard clause.
Make sure you allow for Judicial Review.
Have you done all the site investigations? Or go you need to be conditional on that stuff too?
If it can wait until later, I will cut and paste our standard clause.
Make sure you allow for Judicial Review.
Have you done all the site investigations? Or go you need to be conditional on that stuff too?
ATV said:
Hello guys,
So to this end, the seller has agreed to take a deposit from us on exchange of contracts but before completion whilst we apply for planning, and also to sign a "get-out" clause that means that if, for any reason, we don't get planning permission, he has to return our deposit before completion.
As a seller I'd run a million miles from this kind of thing. You could back out for any reason up to the point where permission is granted. Maybe you find a nicer house/realise the markets gone down/whatever. So to this end, the seller has agreed to take a deposit from us on exchange of contracts but before completion whilst we apply for planning, and also to sign a "get-out" clause that means that if, for any reason, we don't get planning permission, he has to return our deposit before completion.
silentbrown said:
ATV said:
Hello guys,
So to this end, the seller has agreed to take a deposit from us on exchange of contracts but before completion whilst we apply for planning, and also to sign a "get-out" clause that means that if, for any reason, we don't get planning permission, he has to return our deposit before completion.
Just about every development site ever is done on this basis. (There are a few exceptions )So to this end, the seller has agreed to take a deposit from us on exchange of contracts but before completion whilst we apply for planning, and also to sign a "get-out" clause that means that if, for any reason, we don't get planning permission, he has to return our deposit before completion.
As a seller I'd run a million miles from this kind of thing. You could back out for any reason up to the point where permission is granted. Maybe you find a nicer house/realise the markets gone down/whatever.
blueg33 said:
Just about every development site ever is done on this basis. (There are a few exceptions )
Residential properties with "potential" round here seem to come with an uplift clause payable when permission is granted, or something similar.OP, could you offer the seller something like that?
silentbrown said:
blueg33 said:
Just about every development site ever is done on this basis. (There are a few exceptions )
Residential properties with "potential" round here seem to come with an uplift clause payable when permission is granted, or something similar.OP, could you offer the seller something like that?
If they don’t get planning they end up with a property they don’t want.
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