How Property Contracts Affect You

Author: Garry Crystal

Written property contracts are a necessary requirement regardless of whether you are buying, leasing, or renting. Property contracts are used as evidence of the agreement between the person who has the property and those that wish to buy or rent it. Once the contracts have been signed and exchanged they will then become legally binding documents.

Use a Solicitor

If you are planning on leasing business premises or buying a property then obtaining the services of a solicitor should be a priority. Choosing a solicitor that specialises in property law will ensure you obtain the best deal for your money. Property solicitors will of course have a great deal of expertise in this area.

They will be able to negotiate on the buyer’s behalf, make searches that ensure the title of the property is in order, and conclude the purchase within the quickest timeframe. Good property solicitors will also be able to carry out searches to ensure that there are no problems with the property, and make sure that all of the property contracts’ terms and conditions are agreeable. Banks will also be able to verify with solicitors that the property to be purchased is actually a good investment deal.

Terms and Conditions

The terms and conditions of any property contract will be all important. They set out the requirements, expectations and obligations of both parties involved. They are also there to protect the rights of the purchaser and to make sure they obtain a fair deal. Most contracts will have standard details throughout but the terms and conditions should be worked out and agreed by both parties.

Of course the terms and conditions of most property contracts will have a number of consumer rights set into them that will be standard. However, there should be room for negotiations depending on the type of property contract. For example business lease contracts are require by law to allow for the negotiation of the terms between landlord and tenant. No contract terms and conditions should ever be set in stone before the contract is signed, there should always be room to negotiate to ensure that both parties have a say in the deal.

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Exchanging the Contracts

Once all of the terms and conditions have been agreed and funding is ready to be released then the property contracts will need to be exchanged. This will take place on the completion date; this the date that the buyer holds the legal title to the property. Once the contracts have been exchanged then the buyer is legally bound to buy the property. There will also be a deed transfer, which means that there will be an official record of the new owner held at the Registry of Land.

Your situation may be slightly different. ask a question below ↓ and our editorial team will reply with our advice.

Stamp Duty

It is a legal requirement that any deed transfer officially receives a stamp. Stamp duty is a tax made by the UK government on any properties over £60,000. A solicitor will make all of the arrangements for stamp duty if they are required. Also included in the details will be the mortgage lenders interest in the property.

Sale and Purchase Transactions

Apart from finding the cost of the property, first time buyers do have it easier regarding fees and contracts than the second time buyer will. If you are selling and purchasing a property then this will count as two separate transactions. All the paperwork will usually be handled by a solicitor, but it will mean extra work and will mean extra solicitor’s fees. Solicitors will normally have a single transaction fee as standard and will view sale and purchase transactions as two separate transaction fees.

There is no doubt that property contracts can be confusing for the inexperienced buyer. This is why solicitors are always used to hold the hands of first time buyers and guide them through the whole process. Solicitor’s fees may be expensive but they are required, and are the best way to ensure the protection of rights for anyone who is about to enter into the world of property contracts.

The Next Step

Now that you have read through the advice above, you might want to put it into practice. Our Contract Red Flag Checker lets you describe a contract you are about to sign and get a plain English summary of the clauses that could hurt you. Takes about 2 minutes. Try it now →

5 questions

Ask Contracts and Agreements a Question

x 19/03/2018 at 3:39 pm

I need to know if someone paid the mortgage on a property but their name was not on the deeds, are they entitled to the property?
So.. my Nan had lived in her flat for over 50 years and one day her son calls her asking if he wants him to buy the flat for her. They have meetings and its agreed that he will buy the flat, she will pay him £100 per month (she was to pay all water, gas, electric and council tax herself) turns out that he was only paying £100 per month mortgage, so surely that means she was paying him back the money he paid for the mortgage, right?
Also because she had been living in the flat for so long he got a discount price (I believe it was almost £40,000 off)
very sad but then his wife died and the mortgage got paid off and my Nan continued to send him £100 per month. Until one day he called her up and told her, he was in financial trouble so would she mind moving in with him and rent out the flat (he received all of the rent money from the tenants) . My Nan agreed to do this. after a few years of mistreatment from her son, my Nan decided to move back into the flat. Obviously when she moved back into the flat he stopped getting rent, her name on the deeds, her property right? the flat had been paid off, he had made his money back (and after claiming that the flat was shared, why did he not split the profits with my Nan?)
them he wanted my Nan to sign over 100% of the flat over to him so when my Nan dies, my Mum (who has been caring for my Nan since she moved back into the flat) gets nothing. They have come to an agreement (after a lot of bullying from him) that she will only have a 27% share in the flat.
Does he have any right to frighten my Nan into signing over such a massive chunk of the flat over to him (especially when hes taken so much from her already and treated her badly?!?)

Kt 04/11/2015 at 10:05 pm

My parent has been divorce over 30 years there was two house in the divorce it was splt 51% and 49% My house she got 51% and the other house dad got 49% . The house dad stay in he had paid the house off and remodel the home. He had paid the taxes on the propery for years. No he passed away he left power of attorney to his two kids. Now, my mom say the house is her that he was staying since she still have the deed to the house. but both house was split in the divorce decree. I feel this is not my mom house she has been divorce from my dad 30 years.. Need so advice..

Ahmed 27/05/2015 at 10:40 pm

Thank you very much for response. I am really sorry, asking one question more. Actually one person is living on rent in my house. This person has contract with my sister. As I have told you , she give me this house as gift. The rent is still coming in my sister account. She told me that six month more rent will be come in her account, because she told me that I have contract with him. She told me if I change now , then I will pay again for contract. Because property dealer is dealing with the person who living in this house.Please can you tell me , all this effect on my ownership at the end of day or not. Thank you.

nobby 30/08/2014 at 9:58 pm

I paid mortgage of 10 years ago
I have the original title deeds
I have since remortged but still have original deeds at home.
What would happen if I Defaulted

Omlette 18/07/2011 at 12:05 am

I am GP who along with another GP who retired in March, both have our name on the title Deads. We have recently discovered that another partner who does not have any rights to the building and who is not mentioned in the Deeds. Has somehow managed to have a clause placed on the deeds saying that the property cannot be sold without his permission. I Would like to know if this is legally binding considering that myself and the retired partner knew nothing about this and did not even give our consent.

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