A contract, or also known as an agreement is prepared by the seller’s solicitors. The contract is the legal document that binds the seller and the buyer for purchasing or selling the property and once it is exchanged and greed upon it legally binds all parties on the contract.
The contract includes vital information regarding the transaction and provides information such as the price of the property, the date the transaction will be completed, the terms of the contract and other details such as the deposit amount, title number etc.
The typical contract will start off by detailing the seller’s and purchaser’s full names and current addresses and also the full property address that the transaction concerns. Normally, the seller’s name on the contract is the name that is on the Official Copies as the Registered Proprietor. This is not the case if there are circumstances such as Power of Attorney (in which case, the contract should state the persons who is acting on behalf of the registered proprietor), Executors if the registered proprietor is deceased or if the property has been repossessed.
The Title Number (registered land) or Root of Title (unregistered land) is inserted in the contract prior to contracts being exchanged for clarity for all parties which land is being sold or bought. The agreed completion date is also inserted on the contract to indicate what date the transaction will take place. Depending on the type of property being purchased, some contract may read the completion date to be on notice which will then be referred to a special condition also included within the contract.
Purchase price and deposit monies are also included on the contract which are confirmed by both legal representatives with their client prior to exchanging contracts with the opposite side party. There is also a section that refers to any chattels that may be included and agreed upon the parties. These could be any items that is being left behind in the property at an additional cost to the sale price. The chattels will be agreed prior to the exchange of contracts and will be detailed on the contract.
There may be special conditions that will be inserted within the contract depending on if the transaction included any unique conditions. The contract also explains if the property is being sold with a vacant possession clause, which is applicable where the property is buy to let and is being sold with a sitting tenant.
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