Conveyancing: Hooper v Oates
When purchasing property, both buyer and seller can pull out of a purchase at any point up until they exchange contracts. Past this point however, pulling out would be in breach of contract, entitling the other party to damages.
Where a buyer pulls out, the damages may be restricted to forfeiting the deposit they paid at the point of exchanging contracts. However a recent case has demonstrated that in an unstable housing market buyers should be particularly careful when it comes to pulling out of a sale, as they could be held responsible for any loss incurred as a result.
In the case of Hooper v Oates a buyer failed to complete a house purchase for £605,000 just prior to the housing market crash. Due to the subsequent recession, the sellers were unable to sell the property at that price again, despite further reducing the asking price. Eventually they moved back into the house, at which point it was valued at £495,000.
The Court of Appeal upheld an award for damages against the buyer to the sum of £110,000. This represented the change in value at the point at which the sellers had stopped trying to sell the property, as opposed to the point in time at which the buyer pulled out of the sale.
What the Judgement Means For You
It is clear that buyers who breach their contract and fail to complete on a sale can face heavy penalties and can be held liable for any loss in value incurred by the seller as a result of the breach.
In practice however, being unable to complete on a purchase is a rare event. The very process of conveyancing is a thorough one – as it should to be given that buying a house is usually one of the biggest purchases you will ever make! Prior to exchange of contracts buyers are able to pull out for any reason, from an adverse survey, to financial issues or simply changing their mind. This process is designed to ensure that at every stage every buyer and seller in the chain is fully informed, able and willing to continue with the transaction before contracts are exchanged.
If you have a conveyancing query contact Rosalind Watchorn Solicitors today to discuss your situation. The first CQS accredited solicitors firm in Sheffield, we specialise in conveyancing; wills and probate; tax planning and elderly advice.
Phone Barbara or Stewart for a quote on 0114 2290160.