Checking the contract for errors

I still remember signing the contract and it was so exciting because it meant that we were nearly homeowners!

We were planning to sign it only after all the outstanding enquiries were resolved but we were chased multiple times by the developer’s estate agents, even though the developer needed to come back to us on outstanding enquiries. We were informed that we needed to be “exchange ready” which meant that the signed contract was with our solicitor, along with the deposit funds. This was so that the exchange of contracts could happen as soon as possible after the outstanding queries were addressed.

It was frustrating to be chased multiple times about the exchange of contracts because our solicitor had already been chasing the developer’s solicitor to respond to the remaining queries so we could exchange contracts. Also, we were told that we could lose the plot because the developer could find another buyer if we didn’t exchange and complete within the new deadline that was set.  I’ve written an overview of our conveyancing process in this post.

I found this very stressful and upsetting as I didn’t want this purchase to fall through since we had already invested so much time on this property.  My rational mind told me that, if the developer was this slow, it’s unlikely they would want to start the process all over again so they were probably unlikely to pull out of the sale.  However, it’s difficult to stay rational when someone on the phone is telling you that the developer will consider pulling out of the transaction if we don’t exchange by a certain date.

We later found out that the urgency was because it was approaching the developer’s year end for its financial accounts! 

Hubby and I were not comfortable exchanging contracts until all the enquiries were answered.  In the end, we agreed to sign the contract and transfer the deposit funds to our solicitor to show our intention to progress with the transaction. However, we explicitly instructed our solicitors not to exchange contracts until the queries were addressed and that they had received an email from us instructing them to exchange on our behalf.

We were particularly careful because when the solicitors exchange contracts, the transaction becomes legally binding. It’s a key document so hubby and I checked the details were correct.

The format of our contract is as follows:

·      Name and address of the buyers and seller

·      Property details (address, plot number and development name)

·      Solicitor names and addresses for both parties

·      Key dates (contract date, completion date)

·      Contract rate

·      Purchase price and deposit amount

·      Lease (when it will be granted)

·      Seller’s title number

·      Title guarantee

·      Warranty provider

·      Planning agreement

·      Terms:

a)     Standard Conditions (The Standard Conditions of Sale (Fifth Edition – 2018 Revision) 

b)    Deposit

c)     The Lease

d)    Vacant possession

e)    Insurance

f)      Access

g)     Title

h)    Completion

i)      Representatives

j)      Other matters

k)     UK finance disclosures of incentives form

Initially, I was very confused where the contract referred to certain conditions and then realised it was a separate document! We found a copy of the standard conditions on the Law Society website. 

I’ve also listed some of our queries and checks below:

·        Checked the sellers company number on Companies House. The seller’s company number was incorrect.  

·        Checked our information was inputted correctly

·        Checked the solicitors’ details and seller’s details

·        Enquired with our solicitor whether there were any implications for us where some Standard Conditions were stated to not apply

·        Asked for clarification on what certain clauses meant

·        Where there were modifications to clauses, we checked if this was standard practice and if there are any implications for us

We received multiple versions of the contracts and I really recommend using Google Docs to compare the different versions because we found it difficult to compare the two documents manually! 

In the final version of the contract, the deposit amount was changed to an incorrect number (with an extra zero!) but it was correct in the earlier versions.  By the time I spotted it, we had already signed the contract and sent it across our solicitor. Luckily we hadn’t exchanged and our solicitor corrected the error by hand.  The reason why we didn’t spot the change was because the comma was in the right place (£XX,0000) and we hadn’t discovered Google Docs could compare documents then!  For steps on how to do this, see this post!

HomeOwners Alliance also have a useful article on exchanging contracts!

This is such an exciting part of the journey, wishing you all the best with yours!

Jess