Contract Terms

Essential Contract Terms

Understanding the key terms in your property contract is crucial for a successful purchase. Here are the most important terms you'll encounter:

Exchange of Contracts

The point at which both parties are legally committed to the sale. After exchange, neither party can withdraw without financial penalties.

Completion Date

The date when the property ownership legally transfers to the buyer, and the remaining balance of the purchase price is paid.

Deposit

Usually 10% of the purchase price, paid at exchange of contracts. This can be forfeited if the buyer pulls out after exchange.

Property-Specific Terms

Freehold Terms

  • Absolute ownership of property and land
  • Rights to make alterations (subject to planning)
  • Responsibility for maintenance
  • No ground rent or service charges

Leasehold Terms

  • Length of lease remaining
  • Ground rent amounts and review periods
  • Service charge obligations
  • Restrictions on alterations

Special Conditions

Fixtures and Fittings

Detailed list of items included or excluded from the sale, such as appliances, curtains, or garden equipment.

Planning Permissions

Any existing planning permissions or restrictions that affect the property's use or potential development.

Conditional Terms

Special conditions that must be met before completion, such as obtaining mortgage approval or completing specific repairs.

Legal Implications

Property contracts are legally binding documents with significant implications. Always ensure you:

  • Read and understand all terms before signing
  • Seek professional legal advice on unclear terms
  • Keep copies of all signed documents
  • Understand your obligations and rights