This is the first in a series of short articles which I hope will help clarify some of the legal aspects of the house buying and selling process in Scotland in the Twenty-first century.
In these articles I’ll be explaining what the different terms used in the process mean; what stages are involved in a property sale from both the buyer’s and the seller’s viewpoints and what the solicitor acting for you does to protect your interests.
No doubt, many of you reading this will have bought and sold homes over the years and be well acquainted with the whole process. If you are, then hopefully you will still find something of value in the later articles when I will be looking at buying at auctions, exclusion of indemnity and what happens to the ownership of property after death.
However, I am getting ahead of myself. For now let us go back to basics and talk about missives.
For every purchaser on one side of a property transaction there is a seller on the other. While the purchaser and the seller may begin from different starting positions ultimately both sides must be in complete agreement on the terms of the contract.
This agreement is reached through the exchange of missives between the buyer’s solicitor and the seller’s solicitor. The term missive means “something sent” (which is derived from the same root word which also gives us “missile”). Missives, in this legal context, are simply the formal legal letters sent by both sides which, when taken together, form the contract governing the terms of the property transaction.
Sometimes the exchange of missives forming the contract might simply be made up of one formal letter from the buyer’s solicitor offering to purchase a property and a second formal letter in response from the seller’s solicitor accepting all the terms of that offer without any qualifications.
This is sometimes referred to as a de plano acceptance. De plano simply means “without argument”.
Naturally, the seller’s solicitor will have fully discussed with his client the nature and legal consequences of the terms of any offer to purchase before formally responding on his client’s behalf.
Frequently, there are terms within the offer to purchase which the seller finds unacceptable. In this case, the seller’s solicitor will respond, on his client’s behalf, with a qualified acceptance of the purchaser’s offer. As this is not an unreserved acceptance of the terms and conditions of the offer, it does not conclude the purchase contract.
It may be that the seller is unable to agree to the qualifications contained within the qualified acceptance and so further exchanges of formal letters between the solicitors will be required before agreement to all the terms of the contract are accepted by both sides. It is only when a full agreement has been reached that the missives are said to be concluded.
Before the missives are concluded either party can withdraw from the negotiation process without financial penalties being incurred.
However, once the missives are concluded the contract becomes binding on both parties.
At this stage neither party to the transaction can withdraw from the contract without incurring penalties. The penalties which would become due in such circumstances are defined within the agreed terms contained in the exchange of formal letters and will typically cover such items as re-advertising costs, storage costs and the additional financial costs related to the aborted transaction.
Ken Thompson is a Solicitor with Sandgate Law based in Ayr.
(01292) 292933 www.SandgateLaw.com