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Reservation fee

Reservation fee

Postby tellme_why » Fri May 22, 2015 9:02 pm

A prospective buyer and a seller signed a "new home reservation agreement - subject to contract" letter.
The main conditions related to the reservation are:
-Subject to the buyer paying the reservation fee the seller agrees it will not market the property until the agreed expiry date to allow for the buyer to exchange contracts
-The buyer has the right to cancel the reservation at anytime
-If the buyer cancels the reservation, the seller agrees to pay back the reservation less any reasonable expenses.

**
Question 1:
On the basis of the conditions state above, if the contract is not exchanged AFTER the reservation expiry date, is the buyer entitled to get the reservation fee less any reasonable expenses?
Question 2:
Is the buyer entitled for restitution of the reservation fee if the seller submits the contract to the buyer only 3 days before the Expiry date (and so making it impossible for the seller to carry out the searches and exchange contract)?
Question 3:
Is the buyer entitled for the restitution of the reservation fee if the seller discuss the contract details with the buyer days after the expiry date and few days later the seller refuses to provide more information regarding a “no-build covenant” and pulls out?

Many thanks
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Re: Reservation fee

Postby atticus » Fri May 22, 2015 9:32 pm

1. No. The reservation period has expired. I assume no breach of terms by the seller.

2. Buyer has a claim for breach of contract. Seller should refund.

3. No. See 1.
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Re: Reservation fee

Postby dls » Sun May 24, 2015 12:45 pm

Again - the reservation fee was a fee paid for a service - keeping the property off the market. The potential buyer has bought something and received it in full. What would there be to repay?
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