How to protect a purchase from an unreliable vendor?
Firstly, a big thank you to Neil Patterson, for some timely advice on this deal earlier. This is a commercial 3 story building. We plan to keep the ground floor as a carpet shop and get Planning Permission to revert the upper levels to residential.
The trouble is, the vendor pulled out on Friday, having done a deal with someone else, behind my back. Well, my phone has just rung and the vendor now wants me to buy it again.
This will not be straight forward (but it is a good deal), as planning permission will be required in order for me to get any commercial/development funding, and it currently takes 4 months to obtain in this area (all being well). Also, any Planning Permission we obtain BEFORE completion will benefit the vendor who could again let me down and sell it with planning, onto someone else, for a higher price.
I need to protect this deal for a minimum of 9 months, in order to be able to turn the project around and sell one unit to pay off the bridging.
Would an RX1 and an Option agreement be of any use or are there better ways to deal with my security?
Good advice from the experienced members of this excellent forum, will be much appreciated
Chris Mayger
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Member Since February 2011 - Comments: 3453 - Articles: 286
3:12 PM, 17th June 2015, About 11 years ago
Hi Chris,
Thank you very much. I know a little about option agreements and Land Registry Restrictions (RX1), but definitely not approaching enough to attempt giving you any advice about whether this would be enough for your protection.
You need fully qualified and insured legal advice and you could try our conveyancing team at Hawkins Ryan >> http://buytoletconveyancing.co.uk/contact-us/
I am cautious by nature, but I am hoping there are readers who have experience in this sort of scenario 🙂
Member Since October 2013 - Comments: 17
11:44 AM, 18th June 2015, About 11 years ago
An option agreement (protected by an RX1) is exactly what you should be asking for.
Member Since June 2013 - Comments: 2
12:24 PM, 18th June 2015, About 11 years ago
I agree an Option agreement is a good way to go OR exchange with a delayed completion. Both can be made to be dependant on achieving a satisfactory Planning.
I would speak with my lawyer about both and then talk to the vendor about the options.
Member Since August 2013 - Comments: 17
12:35 PM, 18th June 2015, About 11 years ago
What is a RXI please? And how would it protect the buyer!.
Member Since January 2011 - Comments: 12193 - Articles: 1395
11:29 PM, 18th June 2015, About 11 years ago
Reply to the comment left by “helena dolisznyj” at “18/06/2015 – 12:35“:
An RX1 is a restriction which shows on land registry and prevents a property being sold with clean title. The right to claim the restriction is the existence of the option agreement. Once the option expires the owner of the property would be able to apply to HM Land Registry for the restriction to be removed if it wasn’t removed by the party who placed it there and would be able to pass all legal costs associated with removal onto the former option holder. The option agreement allows the holder to force a sale within a defined period of time for an agreed consideration.
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