Exchange of Contracts

 

The exchange of contracts in property law is a key moment in the property transaction. Before this point, either the buyer or the seller could drop out of the transaction at any time without feeling any repercussions for doing so. After the exchange of contracts, if either the buyer or seller drops out of the transaction, they can face legal action from the other party for breach of contract.

Normal practice for exchange of contracts is for two identical copies of the contract to be signed, one by the buyer and one by the seller, and then exchanged so that both the buyer and the seller have the copy of the contract signed by the other. At this point a binding contract comes into existence. There are several different ways that a contract can be exchanged and each method will involve the contract coming into existence at a different time.

After exchange of contracts, the legal title to the property remains with the seller until completion, but the seller holds the property for the buyer. During this period the seller is entitled to all rents and profits, but must also pay all outgoings, such as bills.

If you would like to obtain legal advice on exchange of contracts in conveyancing, Caven can put you in touch with a local specialist Property Solicitor free of charge. So, if you have any questions or would like our help in finding local Property Solicitors please call us on 08001 221 2299 or complete the web form above.

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