Dissolve home or commercial property purchase agreement

The law states that any failure to perform a contract, gives the other party the power to terminate a contract. When buying real estate, however, there are often additional conditions for this. For example, both the NVM purchase agreement if it Amsterdam model sales contract that first a formal notice must be sent. That notice of default must meet certain strict conditions. Only after it is sent and meets the requirements can the other party rescind the purchase agreement after 8 days.

Formalities when rescinding purchase agreement for residential or commercial property

Like the notice of default, most sales contracts also have specific requirements that the rescission notice must meet. For example, that the dissolution must be sent by registered letter or bailiff's writ. In addition, it may be the case that the dissolution must (or may) be sent to the notary charged with the delivery of the home or commercial property.

Default and notice of default

However, if the standard NVM model or Amsterdam model sales contract is contracted with, it is always required that there is a shortcoming as well as a prior notice of default. Such a shortcoming may be that the deposit has not been paid or no bank guarantee has been provided, or that the buyer refuses to take delivery of the property on the agreed date. In addition, it may be the case that after the conclusion of the purchase agreement, but before delivery takes place, it becomes apparent that there are hidden defects, while the buyer did comply with his duty to investigate. This is also called non-conformity mentioned. If that is the case and the seller refuses to remove those hidden defects, that could also be grounds for rescission.

Penalty after rescission of purchase agreement

If dissolution occurs, the party dissolving is usually also entitled to claim payment of a contractual penalty from the other party. For the models discussed in this article, the default is a penalty equal to 10% of the purchase price.

Dissolve within the legal cooling-off period

In case the purchase agreement concerns a home and the buyer is not acting in the exercise of a profession or business, the buyer has three days for reflection. During these three days, the buyer may dissolve the purchase agreement without giving reasons. The seller does not have this right. Once the cooling-off period has expired, the parties can only get out of the purchase agreement if there is a resolutive condition such as a financing reservation, or in the event the other party fails, defaulted and the purchase agreement is rescinded.

Conclusion

Rescinding a real estate purchase agreement is a serious step that can only be taken under certain circumstances. Be well advised before you dissolve or when your counterparty dissolves the contract. This is because formalities are often overlooked, and this can have far-reaching consequences. Dissolving a purchase agreement can often result in a fine of up to 10% of the purchase price. real estate law attorney of Lexys Lawyers can tell you more about purchase agreements, how to rescind them and the possible consequences.