Booking contracts are currently common in the sale of new homes: the buyer pays the developer a non-refundable booking fee to guarantee the property they lose if they do not exchange contracts and complete the sale within a certain period of time. The agreement presented various scenarios that would mean there would be no penalty for leaving. For example: both the buyer and seller pay a booking fee of usually £250 + VAT. This guarantees you both a £2,000 commitment to each other. Booking fees and obligation may vary. This amount represents the minimum fee and the amount of the obligation. While booking agreements can potentially reduce a lengthy relocation process (currently estimated at around 20 weeks), it is unclear whether a booking agreement would have a negative impact on buyers and sellers trapped in circumstances beyond their control – for example, a chain. You agree, usually with a contractual penalty for non-compliance, to purchase a property that you have not reviewed and examined in detail. You agree to purchase a property on terms not otherwise specified, which means you will have to purchase the property even if it has defects or if your bank does not approve your mortgage. In other words, you agree to enter into a purchase contract whose wording is unknown. You also agree to pay a booking fee or a deposit, the amount of which is usually by pure chance identical to an amount of the contractual penalty imposed in the event that you have changed your mind and have not purchased the property for any reason.

The reservation contract also provides for the obligation for the real estate agency not to offer such a property to other people. When exchanging contracts, the fees are deducted from the deposit, which is then placed. However, the buyer may decide at any time during the booking period not to continue the purchase and to terminate the contract. The costs will then be reimbursed minus the costs incurred by the seller, such as legal and administrative costs. By introducing reservation agreements on all real estate transactions, it is hoped that the moving process will become safer by reducing gazumping (i.e. a third party makes a higher offer than the offer already accepted by a seller) and gazundering (i.e. a buyer reduces their offer, often just before exchanging contracts). A reservation contract can be used when buying new homes if a buyer reserves the right to buy a property for a certain period of time. During this period (referred to as the “Booking Period”), the Seller undertakes not to sell to any other party. Under the Agreement, the Buyer will pay a deposit (known as the “Booking Fee”). The booking period usually lasts 28 days. Before signing a reservation contract, sellers must verify that the terms reflect the requirements of the Code and ensure that they do not enter into another agreement for the same property with another party.

Booking contracts are there to help you secure your business and give you security. However, it`s important that everyone involved knows exactly what they`re signing up for. For this reason, we have compiled this FAQ guide to the booking agreement in cooperation with our legal advice team “Gazeal”. MHCLG Foreign Minister Robert Jenrick and Housing Secretary Esther McVey – confirmed in their roles during yesterday`s mini-reshuffle – are expected to lead the process surrounding the booking agreement in the coming months. .