Buyer who ‘withdrew unreasonably’ from property sale to pay £35,000
Landmark case brought by Gazeal is understood to the first of its kind in the UK and, the firm says, shows such agreements are legally sound.
A buyer has been told by a court to pay £35,000 to a vendor following a landmark legal case brought by Gazeal, the reservation agreement guarantee service backed by Phil Spencer.
Its service enables a buyer and seller to enter into an agreement that compensates either side should the other pull out ‘unreasonably’ or take too long to complete the conveyancing process, and hopes to stop both gazumping and gazundering.
Each party makes the same commitment to pay the other the same a sum should this happen. In the case that has now come to court, this agreement has been enforced after the two parties completed the firm’s adjudication process, which is overseen by a retired Senior County Court Judge and King’s Counsel.
“Adjudication is rare,” says its CEO Bryan Mansell, “It has only happened 16 times in more than 2,000 cases, and to date all parties have accepted that it is fair.
Tested
“But now, for the first time, the process has been tested in the courts, [it has been] affirmed as being legally binding on both parties, and the defaulting party has been ordered to pay the debt owed to us as a result of it honouring the guarantee it gave to both parties.”
No deposit is paid by either side when entering into an agreement, and Gazeal offers a guarantee of each party’s obligations to each other.
If the defaulting party fails to pay, as in this case, the firm honours the payment under the guarantee, and the debt is assigned to Gazeal which then recovers it through the courts.
In this landmark case, the buyer had pulled out unreasonably, the judge found, and Gazeal sought to recover the £35,000 it had paid the ‘jilted’ vendor after both sides had been through the firm’s adjudication process.
Executive Chairman of Gazeal Limited, Duncan Samuel LLB (Hons) and a non-practising solicitor, says: “It is very satisfying, and a great validation of the work that the team has put in to create a fair, balanced and transparent reservation process and adjudication procedure in which both parties to a sale, and the agent, can have confidence.”
Broker
Mansell adds: “This result will give agents confidence in our process. We have been very careful to design our service to be the independent, honest broker, in a sale, bringing clarity and fairness where previously there was none. Agents can have confidence that when they start our process, their sellers and buyers are getting the protection they need.”
