Private Agreement

29 Sep 2015, Legal, by broosco legal team

 

A Property Buyer should know...

 

Signing a private agreement in order to "secure" a sale is usually the first thing you will be asked to do when the deal about the purchase of a new property is closed. This is simply an agreement which aims to prevent the seller from putting his property again in the market and therefore make you feel safer in dealing with the legal and urban property search through your appointed lawyer and engineer.

When these searches are completed and your consultants have consented to the purchase of the property, possibly the seller will require a deposit. Paying a deposit by signing a notary's act is far more secure than signing a private agreement, since a notary's act is a legal document with direct enforceability while a private agreement is a simple document between the parties respectively binding but not legally enforceable. Practically, this leads the parties necessarily to taking legal action in case the terms of this agreement are not respected.

However, a private agreement is often far easier and quicker, especially when the conditions of a notary's preliminary act can't be fulfilled at this early stage of a sale process (documents required not ready yet, the most common reason).In that case, what we should always be aware of is the following:

  • Ask your lawyer to draft this agreement or check the one offered to you by the other party so that he/she makes sure that the terms and clauses included are legally correct protecting your interests.
  • Make sure the agreement contains a correct description of the property to be bought.
  • Make a precise time scale agreement, defining the time of completion and, depending on your wishes, adding a penalty in case of a delay. 
  • Decide the exchange rate of the purchase price in case euro is not your currency.
  • Define the terms and consequences of a breach of the agreement in case any of the parties fails to comply with its obligations. Regardless the fact that in case these terms are not respected, you will have to turn to litigation, they should be necessarily written down and signed, so that you can easily prove your point in court.

Remember that paying a deposit, is the first legal step of the purchase procedure. Therefore, realising the commitment deriving from such an agreement, try to be cautious, follow your legal consultant's advice and be sure of the property choice you are making.

Good luck!

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