Buying a home is a major commitment, and circumstances can change during the conveyancing process. A survey may reveal unexpected problems, mortgage funding may fall through, or the buyer may reconsider.

In England and Wales, the consequences largely depend on whether contracts have been exchanged.

Before exchange, withdrawing usually means losing money already spent. After exchange, it can lead to substantial financial liability.

Written by John Ju, Conveyancing Paralegal

Before Exchange: Generally Free to Withdraw

Before exchange of contracts, an accepted offer is usually “subject to contract”. Neither party is legally committed to completing the transaction. A buyer can generally withdraw without compensating the seller simply for changing their mind. The seller can also withdraw or accept another offer.

However, withdrawing is unlikely to be cost-free. The buyer may have already paid for searches, a survey, mortgage arrangements and legal work. Whether any fees are refundable depends on the provider’s terms and the work completed.

The seller may also incur wasted expenses and delays, particularly where the withdrawal disrupts a chain. In an ordinary transaction, these losses do not automatically become the buyer’s responsibility before exchange.

Separate agreements may change the position. A reservation or exclusivity agreement, for example, may impose payment obligations or limit refunds. Buyers should obtain legal advice before entering into such agreements and check the terms before withdrawing.

After Exchange: A Binding Commitment

Exchange of contracts creates a legally binding agreement to buy and sell the property. Both parties commit to the contract terms, including the completion date. There is generally no cooling-off period, and changing your mind does not release you from your obligations.

A buyer who withdraws without a valid legal or contractual basis risks losing their exchange deposit, commonly 10% of the purchase price. On a £400,000 purchase, this could mean £40,000. Depending on the contract conditions, paying a smaller deposit does not necessarily limit liability to the amount paid.

The financial consequences may extend beyond the deposit. The seller may claim compensation for recoverable losses caused by the breach, potentially including a

shortfall if the property is subsequently sold for less. Any claim must be supported by evidence and assessed under the contract and applicable law.

If completion is delayed, contractual interest may also become payable. The seller may serve a notice to complete, setting a final deadline for completion. Under the Standard Conditions of Sale, this is normally ten working days, excluding the day the notice is given. Failure to comply may allow the seller to terminate the contract, retain the deposit and pursue damages.

What Should a Buyer Do If a Seller Pulls Out?

Before exchange, a seller can generally withdraw without compensating the buyer for costs already incurred. If this happens, contact your conveyancer and estate agent to confirm the seller’s position and establish whether the transaction can still proceed. Your conveyancer can also check whether any separate reservation or exclusivity agreement gives you rights or remedies.

After exchange, the seller is legally bound by the contract and cannot simply withdraw because they have changed their mind. Contact your conveyancer immediately if the seller refuses or fails to complete. Depending on the circumstances and the contract terms, your options may include agreeing a revised completion date, serving a notice to complete or pursuing legal remedies.

If the seller fails to comply with a valid notice to complete, you may be entitled to terminate the contract, recover your deposit and claim damages for recoverable losses. In some cases, it may also be possible to seek a court order requiring the seller to complete the sale. Your conveyancer can advise on the appropriate steps before you agree to any cancellation or commit to another purchase.

What Should a Seller Do If a Buyer Pulls Out?

A buyer pulling out can be stressful, particularly if you are relying on the sale to fund your next purchase. Your first step should be to contact your conveyancer and establish whether contracts have been exchanged, as this determines your rights and the options available.

Before exchange, ask your estate agent to confirm why the buyer has withdrawn and whether the problem can realistically be resolved. If the purchase will not proceed, discuss putting the property back on the market and contacting other interested buyers. Tell your conveyancer promptly if the withdrawal affects a related purchase, so they can review your commitments and help you manage the impact on the chain. Although you may have incurred wasted costs, these are not ordinarily recoverable from the buyer unless a separate agreement provides otherwise.

After exchange, seek legal advice before agreeing to cancel the sale, returning any deposit or committing to sell to someone else. Your conveyancer can assess whether the buyer has a valid basis for withdrawing and advise on the appropriate response, which may include negotiating a short extension, serving a notice to complete or pursuing contractual remedies.

Keep copies of relevant correspondence and records of any additional expenses or losses. If the contract is lawfully terminated and you seek compensation, you will generally need to take reasonable steps to limit your losses, such as remarketing the property promptly. Any claim should reflect recoverable losses and account for any deposit retained.

If you need advice or assistance, please contact us here. Our team will be happy to help.

Need legal advice? We’re here to help.

If you have questions about your situation or need advice on your next steps, our experienced legal team can help.

Call us on 020 7928 0276 between 9:30am and 6:00pm, or email [email protected].

You can also contact us online by completing our short enquiry form. Tell us a little about your situation and we’ll get back to you as soon as possible.

Not sure which service you need? Get in touch and we’ll help you identify the right team.

James Cook

See Full Bio

Buying or selling a home involves several important steps. Two key moments are exchange of contracts and completion. Understanding what happens at each stage can help you plan your move and know what to expect.

Written by Stephanie Chow, Solicitor

What happens before exchange?

Before contracts can be exchanged, the buyer’s conveyancer will usually complete the necessary anti-money laundering checks, review the title documents and search results, deal with enquiries, and report to the buyer. If the buyer is using a mortgage, the conveyancer will also check the mortgage arrangements.

Both parties need to agree the contract terms and a completion date. The buyer should make sure they understand the purchase, have their deposit ready and have arranged any necessary buildings insurance.

Until exchange, either party can usually withdraw from the transaction. An agreed offer by itself does not make the sale legally binding.

What does exchange of contracts mean?

At exchange, the conveyancers formally exchange the contracts signed by the buyer and seller. The agreement becomes legally binding, and the completion date is fixed. If either party fails to complete as required by the contract, this may amount to a breach of contract and have financial or other legal consequences.

The buyer will usually pay a deposit on exchange. The amount and arrangements can vary, so the buyer should confirm with their conveyancer how much is required and when it must be sent.

If you are buying and selling at the same time, the transactions may be linked in a chain. Your conveyancer will coordinate exchange with the other conveyancers so that the linked transactions can proceed together.

What happens between exchange and completion?

The time between exchange and completion varies. During this period, the buyer should:

• arrange removals and prepare for the move;
• send any remaining money needed for completion to their conveyancer in good time;
• check arrangements for collecting the keys; and
• confirm with their conveyancer whether buildings insurance needs to be in place from exchange.

The buyer’s conveyancer will request the mortgage funds, carry out any remaining pre-completion checks and prepare the completion arrangements. The seller should make arrangements to move out and ensure the property is ready to hand over in line with the contract.

What happens on completion day?

On the agreed completion date, the buyer’s conveyancer sends the purchase money to the seller’s conveyancer. Once the money has arrived and completion is confirmed, the estate agent can usually release the keys to the buyer.

The seller should leave the property by the time agreed, remove any belongings that are not included in the sale and hand over the keys as arranged. The seller’s conveyancer will use the sale proceeds to repay any mortgage secured against the property and account to the seller for the balance.

The exact timing can depend on the transaction and whether there is a chain, so it is sensible to avoid making assumptions about when the keys will be available.

What happens after completion?

After completion, the buyer’s conveyancer deals with the post completion requirement. These may include submitting a Stamp Duty Land Tax return in England or a Land Transaction Tax return in Wales, where applicable, and applying to HM Land Registry to register the buyer as the new owner and record the lender’s mortgage, if there is one.

How can you help the process run smoothly?

Keep in regular contact with your conveyancer, respond promptly to requests and send money only using the verified bank details provided by your conveyancer. If your circumstances change or you are unsure what to do before exchange or completion, contact your conveyancer as soon as possible.

Exchange and completion are important milestones, but the details can vary between transactions. Your conveyancer can explain what applies to your particular purchase or sale.

Need legal advice? We’re here to help.

If you have questions about your situation or need advice on your next steps, our experienced legal team can help.

Call us on 020 7928 0276 between 9:30am and 6:00pm, or email [email protected].

You can also contact us online by completing our short enquiry form. Tell us a little about your situation and we’ll get back to you as soon as possible.

Not sure which service you need? Get in touch and we’ll help you identify the right team.

James Cook

See Full Bio

Buying a property is an exciting moment. You found your dream house, survived the estate agent’s enthusiastic description of the “cosy” second bedroom and are beginning to imagine where the sofa will go. Then you discover a few lines of fine print that could turn into a big problem. That is where restrictive covenants come in.

A restrictive covenant is a legal restriction affecting what you can do with a property. It might prevent you from building an additional property, running a business from home, altering the property in a particular way or carrying out certain types of development.

The good news is that finding a restrictive covenant on the title does not automatically mean that your plans are doomed. The important thing is to understand exactly what the covenant says, whether it affects your property and whether it can be enforced.

Written by Wai Ling Chin, Solicitor

What is a restrictive covenant?

A restrictive covenant is essentially a legal promise not to do something with a property. Common examples include covenants preventing an owner from:

• building an additional property or extension;
• using the property for business purposes;
• altering its external appearance;
• using it other than as a single private dwelling; or
• carrying out particular types of development.

Not every covenant found on an old title is automatically enforceable. Whether a particular covenant can be enforced depends on matters including the wording of the covenant, the property concerned and the circumstances in which it was created and subsequently dealt with.

Restrictive covenants and planning permission

Planning permission and restrictive covenants are separate matters. You might obtain planning permission for your extension and still find that a restrictive covenant prevents you from building it.

Planning permission asks: “Will the local planning authority allow this development?”

The covenant asks a rather different question: “Does someone else have a legal right to object to you doing it?”

So you can, unfortunately, get a “yes” from the council and still have a problem with your title. Planning permission does not, by itself, remove or override a private restrictive covenant.

How do I know whether my property is affected?

For registered property, restrictive covenants will often be referred to in the title register. The register may refer to an earlier transfer or conveyance containing the full wording. The precise wording can be critical. For example, “not to use the property for any trade or business” is different from “not to use the property other than as a private dwelling”.

If you intend to work from home, let the property, build an extension or create a separate dwelling, these distinctions may be significant. The title register is therefore an important starting point, but the underlying historic documents may also need to be reviewed.

An eight-point checklist

When assessing a restrictive covenant, consider:

1. Identify – What does the covenant say and which land does it affect?
2. Interpret – What does the wording actually mean?
3. Benefit – Who has the right to enforce it?
4. Burden – Does it bind the current owner?
5. Interest – What was the covenant intended to protect?
6. Scope – Exactly what activity or development is prohibited?
7. Breach – Would your proposed use or works breach it?
8. Remedy – Can consent, release, variation, insurance or an application to the Upper Tribunal be considered?

Can a restrictive covenant be removed?

Depending on the circumstances, it may be possible to negotiate a release or variation with the person entitled to enforce the covenant. Alternatively, section 84 of the Law of Property Act 1925 provides a mechanism for applying to the Upper Tribunal (Lands Chamber) for certain restrictive covenants to be discharged or modified, provided the relevant statutory conditions are satisfied.

What happens if I breach a restrictive covenant?

The consequences depend on the circumstances and the nature of the covenant. If an enforceable restrictive covenant is breached, the person entitled to enforce it may be able to seek a remedy through the courts.

Depending on the circumstances, this could include an injunction requiring the breach to stop or, in an appropriate case, damages. This is why it is generally better to investigate the position before carrying out the work rather than discovering afterwards that a neighbour or another person is objecting.

What should you do?

Do not assume that an old covenant is automatically unenforceable. Equally, its presence on the title does not necessarily mean your plans are doomed. If you are buying a property, tell us about your intended plans before exchanging contracts. If you already own the property, review the title before committing substantial sums to building or development works.

In short, a restrictive covenant is not necessarily a reason not to buy a property, but it is something that should be understood before you commit to a purchase or a particular development.

Our Residential Property team are experts in advising on restrictive covenants on property titles. Contact us here.

Need legal advice? We’re here to help.

If you have questions about your situation or need advice on your next steps, our experienced legal team can help.

Call us on 020 7928 0276 between 9:30am and 6:00pm, or email [email protected].

You can also contact us online by completing our short enquiry form. Tell us a little about your situation and we’ll get back to you as soon as possible.

Not sure which service you need? Get in touch and we’ll help you identify the right team.

James Cook

See Full Bio

Buying a property is one of the biggest financial commitments most people will make. Yet buyers can sometimes make an offer based largely on the estate agent’s particulars, viewing the property and the information contained in the memorandum of sale.

These documents are important, but they are not a substitute for an independent professional survey.

An estate agent’s role is to market the property and facilitate the transaction. An independent surveyor, acting for the buyer, has a different purpose: to provide an objective assessment of the property’s condition and identify defects, risks and areas requiring further investigation.

Written by Felix Otuoke, Company Director / Solicitor

What the survey can uncover

Some problems are obvious. Many are not.

An independent survey may identify issues involving the roof, damp, structural movement, drainage, timber, insulation, windows, alterations, maintenance or other parts of the building that may not be apparent during a normal viewing.

A survey may also highlight matters that warrant specialist investigation or further professional advice.

These findings can be significant because the true cost of owning a property is not simply its purchase price. It also includes the cost of bringing the property into a satisfactory condition and addressing defects that may not have been apparent when the offer was made.

The survey can change the financial equation

Imagine agreeing to purchase a property for £450,000, only for an independent survey to identify substantial defects requiring £20,000–£30,000 of remedial work.

The buyer now has materially different information from that available when the offer was agreed.

That does not automatically mean the seller must reduce the price. However, before exchange of contracts, the buyer can use the survey findings, together with appropriate repair estimates or specialist reports, as a factual basis for reopening negotiations.

The parties may ultimately agree a price reduction, the seller may undertake particular works, or the buyer may decide that the property is no longer suitable on the original terms.

The important point is that the buyer has discovered the problem before becoming legally committed to the purchase.

A buyer with mortgage must bear in mind that where a price reduction is agreed by the parties, it is also very important to inform your lender of the price reduction. By so doing you offer you lender the opportunity to review the initial mortgage offer and to update it in accordance with the agreed reduced price.

Why timing matters

In England and Wales, the period before exchange of contracts is particularly important. Once contracts have been exchanged, the buyer is generally committed to completing the purchase, subject to the terms of the contract.

That is why obtaining an independent survey early enough to consider its findings is so important.

If significant defects are discovered, the buyer has time to:

1. understand the problem;
2. obtain specialist advice where necessary;
3. obtain realistic quotations for remedial work;
4. discuss the findings with the seller or estate agent;
5. reconsider the purchase price; and
6. decide whether to proceed before exchange.

RICS recommends that buyers consider obtaining a survey and explains that survey findings can provide information that may assist with negotiating the purchase price.

Don’t confuse marketing information with a condition report

Property particulars and a memorandum of sale serve a different purpose from a survey.

The fact that a defect has not been mentioned in an estate agent’s report does not necessarily mean that the property is free from that defect. Equally, a buyer should not assume that an estate agent’s description amounts to a professional assessment of the building’s structural or physical condition. A survey provides another, independent layer of due diligence.

Knowledge gives the buyer options

The real value of an independent survey is not simply identifying defects. It is giving the buyer information before the point of commitment.

Armed with reliable information, the buyer can make a more informed commercial decision. If significant works are required, the purchase price can be reconsidered in light of the property’s actual condition rather than its appearance or original marketing.

In some cases, the survey may confirm that the property is in broadly the condition expected. In others, it may reveal issues that materially affect the buyer’s calculations.

Either way, knowledge before exchange is considerably more valuable than discovering an expensive problem after completion.

The bottom line

An independent survey should not be regarded as an unnecessary expense or simply another piece of paperwork in the conveyancing process.

It is an important part of a buyer’s due diligence.

Before committing to one of the largest purchases of your life, make sure you understand not only what the property is being sold for, but what you are actually buying.

A professional survey can provide the evidence needed to make that decision—and, where significant defects are identified, potentially give you the information needed to renegotiate the purchase price before it is too late.

Need legal advice? We’re here to help.

If you have questions about your situation or need advice on your next steps, our experienced legal team can help.

Call us on 020 7928 0276 between 9:30am and 6:00pm, or email [email protected].

You can also contact us online by completing our short enquiry form. Tell us a little about your situation and we’ll get back to you as soon as possible.

Not sure which service you need? Get in touch and we’ll help you identify the right team.

James Cook

See Full Bio