In this article, you will find:
- Tips to protect yourself and predict cancellation in real estate negotiations
- Main reasons that can lead to breach of contract
- How to make a safe purchase and sale with the help of Loft
Negotiating a property is a process that requires care to detail and everything that is written in the documents. This is because it is a high-value transaction that often leaves the buyer tied to financing for many years.
Despite demanding full attention from buyers and sellers, the negotiation can, yes, be undone if any of the parties so desires. We have prepared this article to answer the main doubts regarding the breach of the property purchase and sale contract and to give tips on how you can make transactions safer.
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TIPS TO PROTECT YOURSELF AND PROVIDE FOR THE RIGHT TO CANCEL WHEN NEGOTIATING A PROPERTY
Whatever the type of contract, including a property purchase and sale contract, you can withdraw from the deal. There are ways for the termination to be carried out, but attention must be paid to the possible consequences, such as fines, for example.
When drafting the purchase and sale contract for a private property, it is important to predict what the consequences will be for both buyer and seller if they withdraw from the deal. It is possible to establish different determinations for each moment of the negotiation, such as the payment of different values when the purchase and sale is undone before the writing of the deed or after.
If the withdrawal is consensual, that is, if the two parties agree to terminate the contract, the procedure is called a cancellation. In this case, the bureaucracy can be solved directly at the notary, through public deed (when it is a property purchase and sale contract).
Now, if only one of the involved parties wants to undo the deal, he must file a contract termination lawsuit in court. The order may include, in addition to the termination of the contract, an injunction so that the buyer no longer has to pay the installments of the financing, for example. It is necessary to have the assistance of a lawyer for this process.
And what does the law of the real estate sale say? “The main characteristic of the cancellation law is to stipulate the percentage of the amount that may be retained (penal clause) by the developer in cases of withdrawal from the buyer, as well as the payment method, delivery time, brokerage fee, among other things ”, Explains UOL .
The jurisprudence establishes a fine of a maximum of 25% on the amount paid when the buyer withdraws from the purchase. That is, of the total that the buyer has already paid for the property, he needs to receive at least 75% back in case of cancellation. If the withdrawal is made by the developer or the construction company, the buyer of the property in the plant is entitled to a full refund of the amount paid.
WHAT REASONS CAN LEAD TO A BREACH OF CONTRACT?
Each life situation is unique, so there are several reasons that can make a person decide to break a contract. One of the most common is related to a financial crisis, which can be started because the buyer lost his job, for example, or had a family emergency that left him in debt. This happens a lot in case of buying property in the plant.
Another reason for breaking the contract is when the buyer's financing is not approved. In this case, he will not be able to pay the balance of the property. It is likely that the purchase and sale contract will provide for a fine in this situation, but you can try to recover the full amount paid in court.
For those who bought an apartment in the plant and did not receive the property under the conditions agreed with the construction company, you can ask for the cancellation. It is also appropriate to ask for compensation, with moral and material damages.
And although the buyer is the party that is most likely to break the contract, the seller can also do so. This can usually happen in response to the buyer not complying with payment agreements or having received a larger offer for the property.
In the first situation, the seller is entitled to terminate the contract free of charge. In the second case, it is likely that you will need to pay a fine for the cancellation, in addition to dealing with the buyer's frustration and the feeling of having gone back on your word. Therefore, try to be sure of that sale before proceeding with the negotiation.
MAKE A SECURE REAL ESTATE NEGOTIATION WITH THE HELP OF LOFT
Negotiating your property without the help of professionals can be a complicated task, with many doubts regarding the purchase and sale contract. Loft offers legal assistance for buyers and sellers to be able to securely negotiate real estate.
Our team of partner real estate brokers is prepared to resolve all doubts about the business, together with our legal team , which takes care of all documentation without extra costs. Find out more about our apartments for sale and schedule an evaluation!
