Sunday, December 20, 2009

Cancel Sales and Leases with care

No one like to cancel a sale or lease but when a buyer or tenant defaults it is important to do it correctly. Court disputes this year confirm that in order to claim payment of any damages or commission from a buyer’s or tenant’s deposit, the seller must have followed the correct procedures to place the party in default and then cancel the sale or lease.

And if a sale or lease is cancelled by agreement it is imperative to deal with the consequences of the cancellation such as Agent’s commission claims, legal costs or damages as well as whether the deposit or any part is to be refunded… in writing!!
The wording of the original sale agreement needs to also be studied carefully as specific provisions dealing with default are set out in the document and need to be followed, failing which claims or retention of a buyer or tenant's deposit may be illegal.
So if you wish to sign a new lease or sale contract on the understanding that the old lease or sale has fallen through it would be wise and in the best interests of the client to first check exactly how the previous deal was cancelled or dealt with and what provisions were made for payment of funds or costs paid and making provision for this in the new set of documents being signed.

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