Today’s Guardian reports on “a template for a contract that will deter buyers and sellers from welching on the deal before it reaches the point of exchange” – see Homebuying: A contract to keep the gazumpers from your door. The idea is promoted by The E-Homebuying Forum. According to The Guardian’s article, such a contract would require both parties to proceed at the agreed price unless, for example “the property were found to be suffering subsidence, [in which case] the contract would become nullified. But if the market suddenly dropped and the buyer wanted to reduce the price, the contract would hold firm and the buyer would either have to continue with the deal at the agreed price, or lose their deposit for withdrawing from the deal.” Whether the article is the start of a concerted effort in the private sector to change residential conveyancing, time will only tell.
Readers may recall something similar from the 1980s – the pre-contract deposit scheme – in which both parties would be required to stump up 1.5% of the purchase price, to be forfeited upon an unjustified withdrawal from the deal. The scheme never saw the light of day as an official adjustment to traditional conveyancing procedures, although individual pre-deposit, lock-out or exclusivity agreements were, and are, from time to time entered into . For an historical reminder of the way things were (and were not to be), see the Law Society Gazette archives – 21 January 1987.