Exchanging contracts on land

[52classic]

Not sure if this is the right section of the forum but I have been asked a question that I am expected to know but I do not!

If contracts have been exchanged only, can the purchaser withdraw without giving a reason and if so would you consider it right protocol for the purchaser to offer a contribution to the vendor's reasonable costs?

[scotal]

If contracts have been exchanged, the purchaser is legally bound to buy the land I think, so their deposit will be forfeit at least.

[LittleRedHead]

Depends on whether it's simultaneous exchange and completion or if they have been done separately. If purely exchange, I'm pretty sure you can still back out but you would lose any deposit that has been paid...

[52classic]

Knew I could rely on PH for a quick response!!! Thanks very much.

This is a supplier asking me for advice.... Like they think I'd know!!

Essentially they are buying land for a new factory but the bank have withdrawn the mortgage offer just days after exchange.

Probably more to it than they are telling me but doesn't look like anything has been signed and there's no suggestion of simultaneous completion.

[Carfiend]

As opposed to exchanging them in a submarine or a helicopter?

[LittleRedHead]

52classic said:

Knew I could rely on PH for a quick response!!! Thanks very much.

This is a supplier asking me for advice.... Like they think I'd know!!

Essentially they are buying land for a new factory but the bank have withdrawn the mortgage offer just days after exchange.

Probably more to it than they are telling me but doesn't look like anything has been signed and there's no suggestion of simultaneous completion.

Sounds like the exchange would have been conditional on the mortgage offer then...in which case, yup, they should be able to walk away as contracts won't have been completed until the vendors sols had a copy of the offer in their sticky mitts...