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Amendments to the Homes Bill

Homes Bill


AMENDMENTS
TO BE MOVED
IN COMMITTEE


 

Clause 7

 

THE EARL OF CAITHNESS

Page 6, line 11, at end insert—
"(   )  A draft agreement of payment of deposit by purchaser in accordance with section (Payment of deposit by purchaser) if such an agreement is proposed."
Page 6, line 11, at end insert—
"(   )  A draft form of guarantee of purchaser's means, in accordance with section (Guarantee of purchaser's means) if such a guarantee is proposed."
Page 6, line 33, at end insert—
"(   )  The regulations shall require that all the information relating to service charges and other charges payable, required for a sellers pack, shall be provided within seven working days of the receipt in writing of the request by the responsible person."
 

After Clause 7

 

THE EARL OF CAITHNESS

Insert the following new Clause—
  "Payment of deposit by purchaser
(1)  If a seller's pack contains a draft agreement for payment of a deposit by a purchaser, the agreement shall provide as follows.
(2)  At the time that a vendor accepts an offer from a purchaser, the purchaser must pay a deposit equivalent to 10% of the purchase price to a deposit-holder approved by the Secretary of State.
(3)  The deposit-holder is to invest the deposit (at the risk of the party who becomes entitled to it) with a bank, building society or such other financial institution as the Secretary of State may from time to time prescribe, in an interest-bearing account in England or Wales, payable at call, with interest to be reinvested, and pay the interest to the parties equally after deduction of all proper government taxes and other relevant charges.
(4)  If the purchaser does not pay the deposit, the vendor is not bound by the agreement.
(5)  If the vendor accepts the deposit, no further offer can be accepted by the vendor unless the offer is rescinded.
(6)  The purchaser or vendor may rescind the offer at any time before exchange of contracts, except in the circumstances listed in subsection (7) below.
(7)  The circumstances referred to in subsection (6) are—
(a)  if the property is sold by public auction, or
(b)  if the contract is made in consequence of the exercise of an option to purchase the property.
(8)  The party exercising the right to rescind the offer will forfeit to the other party 10% of the deposit price of the property if the right is exercised before 5 p.m. on the fifth business day after the day on which the deposit was made and 50% thereafter.
(9)  The vendor is entitled to recover the amount forfeited under subsection (8) from any amount paid by the purchaser as a deposit under the contract and the purchaser is entitled to a refund of any balance.
(10)  The vendor must provide proof to the purchaser's satisfaction that, should he rescind the agreement on the acceptance of the offer, he can meet the liability for payment which will be made before 5 p.m. on the third business day after the day on which the agreement was rescinded."
Insert the following new Clause—
  "Guarantee of purchaser's means
(1)  If a seller's pack contains a draft form of guarantee of purchaser's means, the form of guarantee shall provide as follows.
(2)  A buyer of residential property shall, before an offer is accepted by or on behalf of the seller, attach to the contract either—
(a)  a guarantee from a bank, building society, or such other financial institution as the Secretary of State may from time to time prescribe, and with which the buyer currently maintains an account, that the buyer has sufficient funds to purchase residential property, the price of which does not exceed a limit specified in the guarantee; or
(b)  a guarantee from a bank, building society, or such other financial institution as the Secretary of State may from time to time prescribe, that the institution concerned will provide the buyer with a mortgage or other loan not exceeding a limit specified in the guarantee, provided that the residential property concerned provides good security for such a loan to the buyer.
(3)  Subject to subsection (4) below, where a buyer of residential property attaches to an offer the form of guarantee, or a copy thereof, required to be attached to the offer pursuant to subsection (2)(a) above, but fails to complete the contract, the seller shall have and may exercise a right of remedy only against the buyer for any loss or damage sustained by the seller as a result of the failure to complete.
(4)  Where a guarantee pursuant to subsection (2)(a) above is issued as a result of negligence by or on behalf of the institution concerned, the seller shall have and may exercise a right of remedy against that institution for any loss or damage sustained by the seller as a result of the failure to complete.
(5)  Where a bank, building society, or such other financial institution as the Secretary of State may from time to time prescribe issues to the buyer a guarantee pursuant to subsection (2)(b) above, the institution concerned is bound, notwithstanding any changes in circumstances in the intervening period but subject to subsection (6) below, to lend to the buyer the sum specified in the guarantee on the terms specified therein provided—
(a)  that the buyer makes a contract to purchase residential property within three months of the date of issue of the guarantee; and
(b)  that the buyer has not obtained the guarantee by means of fraud, duress or misrepresentation.
(6)  Where the buyer makes an offer to buy residential property which is considered to be good security for a mortgage or other loan only if such a loan is less than the sum specified in the guarantee issued pursuant to subsection (2)(b) above, the institution concerned shall be bound to lend only such lower sum.
(7)  Where a buyer of residential property attaches to an offer the form of guarantee, or a copy thereof, required to be attached to the contract pursuant to subsection (2)(b) above, but fails to complete the contract, the seller shall have and may exercise a right of remedy against—
(a)  the buyer; or
(b)  the institution which issued the guarantee; or
(c)  both,
  for any loss sustained by the seller as a result of the failure to complete.
(8)  The seller shall have and may exercise the right of remedy referred to in subsection (7) above against the institution concerned whether or not the institution was negligent, and whether or not the institution issued the guarantee as a result of fraud, duress or misrepresentation by the buyer.
(9)  Subsection (8) above does not detract from any rights which the institution may otherwise have to pursue a remedy against the buyer.
(10)  A buyer who fails to attach to the offer either form of guarantee prescribed pursuant to subsection (2) above shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 2 on the standard scale.
(11)  Where a bank, building society, or such other financial institution as the Secretary of State may from time to time prescribe issues to the buyer a guarantee pursuant to subsection (2)(b) above but fails to lend to the buyer the sum specified in accordance with subsections (5) and (6) above—
(a)  the buyer shall have and may exercise a right of remedy against the institution which issued the guarantee for any loss sustained by him as a result;
(b)  the seller shall have and may exercise a right of remedy against the institution which issued the guarantee for any loss sustained by him as a result; and
(c)  the institution which issued the guarantee shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 2 on the standard scale."

 
 
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26 April 2001