Sale Terms
Sale of property in Northern Ireland: Two general conditions of sale published by the Law Society of Northern Ireland, 3rd Edition, are generally incorporated into the contract for the sale of property.
It is the duty of the seller to disclose to the buyer, before completion, all matters of which they have or ought to have knowledge that are registered with any competent authority pursuant to statute. The seller must also disclose all matters of which they have or ought to have knowledge and which might reasonably be expected to be disclosed as a result of searches or inquiries made on behalf of the buyer, or which a prudent buyer ought to make, if any such authority arises or comes into being before the contract is formed, subject to which the property is sold. This duty is fulfilled by disclosing searches and certificates to the buyer as required by law and by providing clear replies to inquiries raised by or on behalf of the buyer before the contract is formed.
Failure of the seller to comply with the above obligation provides grounds for rescission of the contract, in addition to any other rights or remedies the buyer may have as a consequence.
If any pre-existing prejudicial fact disclosed by the seller or found in searches or inquiries between the formation of the contract and completion, the buyer is entitled to rescind the contract, unless the fact or act would not materially affect the value of the property or its enjoyment by the buyer.
Prior to completion, the seller must produce the following searches to the buyer:
- A full and complete property certificate in the form used by the Department of the Environment.
- A local authority search in the form used by local authorities.
- A statutory charges search.
- A search in the Registry of Deeds or folio search in the Land Registry.
- Enforcement of judgments, office and bankruptcy searches, and in the case of a company, a company’s office search against the seller. However, if the seller acts honestly and the statements in searches and certificates are in line, the seller is not liable.
Unless specified otherwise, the property is sold with clear and vacant possession upon completion. If the property is subject to a lease or tenancy, the seller must provide evidence of the terms and conditions of the lease and detail the legally recoverable rent and other tenancy terms.
Apart from the disclosed matters above, the seller must also disclose, before the contract, all easements, rights, and privileges (other than those apparent on inspection) known to the seller to affect the property or which the seller has reason to suppose are likely to affect it. Subject to this, the buyer buys with full notice of the actual state and condition of the property and shall take it as is. However, this does not apply if the property is to be constructed or converted by the seller.
If the property is sold, it is conveyed subject to all rights of way, light, drains, easements, and liabilities affecting it, if the seller requires so. If all or part of the property is near any other land of the seller, the buyer shall not request any rights or easements that would restrict the free use of the seller’s land. If disclosure is made prior to the contract or plan from inspection, the sale deed must contain reservations and easements to the vendor equivalent to any existing between the property sold and the property retained by the seller.
The contract is formed upon the buyer or their solicitor receiving a copy of the purchaser’s offer as accepted by the seller or on their behalf. The buyer or their solicitor is deemed to have received such a copy at the latest by the close of business on the second working day after the seller sends it through World Mail or DX, on completion of an effective fax, or upon delivery by hand. The deposit must be paid within five working days of the contract formation and is held as an agent for the seller.
The seller transfers the property on completion in the same physical state as it was at the contract date, fair wear and tear accepted. The seller retains the risk until completion. If the property is damaged between the contract and completion to the extent of being unusable, the buyer may rescind the contract or accept it with the right to compensation for the cost of rectifying the damage.
Alternatively, the seller may rescind the contract if the property becomes unusable due to damage for which the seller could not reasonably have insured, for which compensation is not available from the state or competent authority, or where the seller is prohibited by legal duty or restriction from rectifying the damage.
The seller is not obliged to insure the property but may potentially be liable for damages above. The buyer must notify the seller of the circumstances of a claim within ten working days of actual completion.