Buying a Property? Don’t Jump the Gun!

Selling property involves an exchange of contracts, followed by completion, and any lawyer will warn you how vitally important it is that you do not jump the gun. In one case, a buyer who, without authority, carried out substantial work on a house prior to completion ended up more than £100,000 out of pocket.

The buyer had agreed to pay almost £800,000 for the house and had put down a £73,000 deposit. The sellers granted him access prior to completion so that he could tidy up the garden. However, he embarked on a programme of works, including removal of the kitchen, demolition of a fireplace, and construction of an extension and a new access route. He also felled protected trees in the garden.

He failed to cease work on the property when challenged by the owners and even after the local authority ordered him to stop. The council eventually obtained an injunction against him, prohibiting further work. The sale ultimately fell through and an issue arose as to whether his deposit was repayable.

The buyer claimed to have improved the property, increasing its value, and that the work he carried out had been broadly approved. However, the High Court found that he had exceeded the permission given to him by the sellers and that the latter had been entitled to withdraw from the sale. The buyer’s deposit was declared forfeit and he was ordered to pay the seller’s £47,000 legal costs.

(Shakespeare v Lewis)