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Your agent

Reservation Agreement

Made on the Homebinding transaction record. Specimen for the property below; the completed agreement is generated from the accepted offer.

Schedule

Property
Whitehole Springs Farm, Whitehole Hill, Leigh upon Mendip, Somerset BA3 5QE
Title number(s)
 
Vendor
 
Buyer
 
Agreed Price
£
Deposit
5 percent of the Agreed Price: £
Stakeholder
 
Vendor's solicitors
 
Buyer's solicitors
 
Signing Date
 
Long Stop Date
25 Working Days after the Signing Date
Completion Period
Working Days after exchange
Named Surveyor and Defect Threshold
 

1. Definitions

1.1"Property", "Agreed Price", "Deposit", "Stakeholder", "Signing Date", "Long Stop Date", "Completion Period", "Named Surveyor" and "Defect Threshold" have the meanings given in the Schedule.
1.2"Working Day" means a day other than a Saturday, Sunday or bank holiday in England and Wales.
1.3"Sale Pack" means the official copies of the register and title plan, the property information forms, the searches obtained by the Vendor, the energy performance certificate and the draft contract held on the record for the Property.
1.4"Reservation Period" means the period from the Signing Date to the Long Stop Date.

2. Deposit

2.1On the Signing Date the Buyer shall pay the Deposit to the Stakeholder.
2.2The Stakeholder shall hold the Deposit and release it only in accordance with clauses 5, 6 and 7.
2.3On completion of the sale of the Property to the Buyer the Deposit shall be applied towards the Agreed Price.

3. Vendor's undertakings

3.1During the Reservation Period the Vendor shall not market the Property and shall not accept, invite or negotiate any other offer for it.
3.2The Vendor shall make the Sale Pack available to the Buyer's solicitors within 2 Working Days of the Signing Date.

4. Buyer's undertakings

4.1The Buyer shall instruct solicitors on the Working Day after the Signing Date and record their details on the record.
4.2The Buyer shall require those solicitors to request the contract from the Vendor's solicitors within 5 Working Days of the Signing Date.
4.3The Buyer shall exchange contracts for the purchase of the Property at the Agreed Price within 25 Working Days of the Signing Date or by the Long Stop Date, whichever is earlier.
4.4The Buyer shall complete within the Completion Period after exchange.

5. Buyer default

5.1If the Buyer fails to comply with clause 4 and none of the events in clause 7 applies, the Deposit shall be forfeited, the Stakeholder shall release it to the Vendor, and this agreement shall end.

6. Vendor default

6.1If the Vendor withdraws from the sale, fails to comply with clause 3.2, or accepts, invites or negotiates another offer during the Reservation Period, the Stakeholder shall return the Deposit to the Buyer and the Vendor shall pay the Buyer a sum equal to the Deposit within 10 Working Days.

7. Return of the Deposit without penalty

7.1The Deposit shall be returned to the Buyer, and neither party shall owe the other anything under this agreement, if any of the following occurs and is evidenced on the record: (a) a defect in the Vendor's title to the Property that was not disclosed in the Sale Pack; (b) a survey by the Named Surveyor reporting defects whose estimated cost of repair exceeds the Defect Threshold; (c) the Buyer's mortgage application, made following a decision in principle verified at the Signing Date, being declined in writing by the lender; (d) the death of the Buyer or the Vendor.

8. Disputes and the Stakeholder

8.1If the parties do not agree whether a release under clause 5, 6 or 7 is due, the Stakeholder shall continue to hold the Deposit until the parties agree in writing or a court orders its release.

9. General

9.1This agreement is not a contract for the sale of the Property and does not oblige either party to exchange contracts. The sale of the Property is governed only by the contract exchanged between the parties' solicitors.
9.2This agreement may be signed electronically on the record and in counterparts. It is governed by the law of England and Wales.
Signed by or on behalf of the Vendor
Name, date
Signed by or on behalf of the Buyer
Name, date

Basis: a lock-out agreement for a fixed period supported by consideration (Pitt v PHH Asset Management [1994]); a genuine deposit at or below the customary 10 percent is forfeitable (Workers Trust and Merchant Bank v Dojap Investments [1993]). The Deposit is held in a third-party managed account with an FCA-authorised payment institution under SRA Accounts Rules rule 11 or the CLC Accounts Code. Working draft for solicitor review.

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