Edinburgh Standard Clauses (2007 Edition)
The Edinburgh Conveyancers Forum has introduced a style of offer which it is hoped will be used by most Solicitors in Edinburgh and the surrounding areas. The aim of the Standard Offer and Standard Clauses is to simplify the conveyancing process with a view to achieving 'conclusion of missives' quicker than has recently been the case, to the benefit of both the buyer and the seller. Once missives have been concluded there then exists a legally binding contract upon which either party can sue the other to carry out his or her part of the bargain.
The Standard Offer makes reference to the Edinburgh Standard Clauses (2007 Edition) and incorporates them as conditions of the offer. Your solicitor may have advised you that the missives you are entering into are based on Edinburgh Standard Clauses, a copy of which you can access below.
The form of Standard Offer and the Standard Clauses are designed for use with residential property and should not be considered for other types of property such as shops or offices.
It is hoped by the member firms of the Edinburgh Conveyancers Forum that the introduction of the Edinburgh Standard Offer will result in the process of conclusion of missives becoming much more straightforward with few of the inherent delays that were involved under the old system.
The speed and ease of conclusion missives (and clauses with which both the solicitor and the client can become familiar) are enormous benefits. Edinburgh now has the tool to make this a reality.
A Client Guide has also been prepared which you can access below.
Edinburgh Standard Clauses (2007 Edition) Client Guide
Edinburgh Standard Offer
Edinburgh Standard Clauses (2007 Edition)
Edinburgh Standard Clauses (2007 Edition) Registered Extract
CLIENT GUIDE TO THE EDINBURGH STANDARD OFFER AND EDINBURGH STANDARD CLAUSES (2007 EDITION)
CONTENTS
SECTION 1: INTRODUCTION
SECTION 2: THE EDINBURGH STANDARD OFFER
SECTION 3: THE EDINBURGH STANDARD CLAUSES (2007 EDITION)
SECTION 4: EXPLANATION OF THE EDINBURGH STANDARD CLAUSES (2007 EDITION)
SECTION 1: INTRODUCTION
The purchase of a house is the most important single financial transaction mostclients undertake. It can be a stressful process for both buyer and seller(and sometimes their Solicitors too!). The advice and assistance of aSolicitor experienced in house purchase and sale and conveyancing is absolutelyessential.
An offer is required to be in writing and there is no binding or enforceablecontract until an offer or a qualified acceptance of an offer is met with by astraight acceptance in writing.
Up to the 1970's missives comprised around five clauses. However cases andother developments in the law have made the process more complicated. Offershave expanded greatly in size and complexity. Rarely in recent practice has itbeen possible or wise to give an unconditional acceptance of an offer. Inaddition most individual firms' offers tended to be based on a 'wishlist' of best possible outcomes for the purchaser. The reality however wasthat qualified acceptances cut the offer down to size and there then emerged awording that most Solicitors would 'settle for'. The Edinburgh StandardClauses have been based on the 'settled for' position of what mostpractitioners will usually accept. Therefore now neither Solicitors nor theirclients should have to go through the existing painful process of offer andnumerous qualified acceptances. That is the aim.
The offer, any qualified acceptances and final acceptance are called 'theMissives' and when final agreement is reached the Missives are said to beconcluded and there then exists a legally binding contract. Until that pointboth the seller and purchaser can back out. When the Missives are concludedeither party can sue the other to carry out his or her part of the bargain.
One of the greatest advantages of the Scottish system in the past was the speedwith which the Missives were concluded. The system of each Solicitor havinghis own style of offer as these became longer and longer and more technical,has slowed this process.
With this in mind the Edinburgh Conveyancers Forum has introduced a style ofoffer which it is hoped will be used by most Solicitors in Edinburgh and thesurrounding areas. The offer appears in Section 2 and will define thePurchaser, the Property, the Price, the Date of Entry (i.e. the date you havecontracted to obtain your keys) and details of any moveable items included inthe price. Some of these moveable items are already covered by Clause 1 of theStandard Clauses under the heading 'Fixtures, Fittings and Contents'. Theoffer makes reference to the Edinburgh Standard Clauses (2007 Edition) andincorporates them as conditions of the offer.
The other important clause in the Standard Offer is that it makes the bid 'subject to survey'. It is now almost uniform practice in Edinburgh thatoffers are made on this basis as this is believed to be the simplest and mostconvenient way to avoid unnecessary expense which might be incurred as a resultof multiple surveys. The intention behind the Standard Offer is that once youroffer has been verbally accepted, a survey or valuation will be carried out onyour behalf. Assuming that report is acceptable to you, your solicitor wouldsubmit a further written letter which would withdraw that provision thusallowing the issue of an unqualified acceptance by the seller's solicitor.
It is not possible to insist that everyone uses these approved styles. Allhouses are different and parties are free to contract as they wish. Howeverguidelines have been issued to Solicitors that use the Standard Clausesrequesting that changes should be made only for valid reasons e.g. making theoffer subject to survey and not for the reason of style rather than substance.
The aim is to conclude the Missives with either a straight acceptance of theoffer or hopefully not more than one qualified acceptance before a finalacceptance. The aim is that ideally the Missives should be concluded withinone week.
You should realise however that if an offer is submitted in the EdinburghStandard style it is now quite conceivable that you will receive an unqualifiedacceptance. Accordingly purchasing clients will have to be completely 'upfront' with the seller and will need to state whether their offer issubject to survey or subject to loan finance or subject to conclusion of theMissives for the sale of their own property. Complete frankness is required asa purchaser may find himself/herself bound to a contract thinking the oldmethod would allow him/her more time. From the seller's point of view therewill be now greater transparency regarding the purchaser's position.
The purpose of this Guide is to explain the various clauses so that bothpurchasers and sellers have a clear understanding of their rights andobligations. It is however only a guide. Solicitors preparing Missives havemany years of training and experience behind them and it is therefore notpossible to fully explain in a short guide like this the legal principlesrelative to each clause. If a dispute arises as to the meaning of the Missivesthe Solicitor is the expert to whom to turn.
The form of offer and the Standard Clauses are designed for use withresidential property and should not be considered for other types of propertysuch as shops or offices.
It is hoped that the introduction of the Edinburgh Standard Offer will resultin the process of conclusion of Missives becoming much more straightforwardwith few of the inherent delays that were involved under the old system.
Speed and ease of conclusion of Missives (and clauses with which both theSolicitor and the client can become familiar) are enormous benefits. Edinburghnow has the tools to make this a reality.
SECTION 2: THE EDINBURGH STANDARD OFFER
Edinburgh Standard Offer
SECTION 3:THE EDINBURGH STANDARD CLAUSES (2007 EDITION)
Edinburgh Standard Clauses (2007 Edition)
SECTION 4: EXPLANATION OF THE EDINBURGH STANDARD CLAUSES (2007 EDITION)
1. FIXTURES, FITTINGS & CONTENTS
The offer should specify any moveable items included in the sale.
Heritable fittings and fixtures are items of a moveable character that havebecome 'heritable' through attachment to the Property and become part of itand removal of which would damage the Property.
Some moveables and 'standard' fixtures (notably carpets and floorcoverings,blinds, curtain rails and runners, but not curtains) are included under item1(d).
2. AWARENESS OF DEFECTS
This asks a seller to confirm that so far as they are aware there are nomaterial defects arising on a number of issues set out in the clause. Bothparties should note that the declaration is as to state of the seller's awareness only and is not an absolute warranty as to fact.
3. SPECIALIST REPORTS
3 (a) This obliges the seller to deliver at settlement any guarantees forspecialist treatment (usually rot or rising damp treatments). If thesedisclose a prejudicial position the purchaser may be entitled to withdraw fromthe Missives within a stipulated time limit.
3 (b) &
3 (c) Self explanatory.
4. CENTRAL HEATING ETC.
The test is now 'working order' i.e. if it works on the Date of Entry (whenthe keys are obtained) that is sufficient. If you have any concerns about theworking order of the central heating or other system it is recommended that youarrange for a separate inspection of it as it will not be covered by the surveyor's report. Any defects existing at the Date of Entry require to beintimated within five working days after settlement.
5. DEVELOPMENT
The seller is expected to state they are not aware of any development proposalsaffecting the property. Under planning legislation neighbour notificationrequires to be given by an owner of adjoining property for certain kinds ofdevelopment. If a seller has been served with such a notice then aqualification will be required in the acceptance to explain that there is anexception from the warranty. The purchaser should be notified of any freshnotices being served prior to the Date of Entry (i.e. when the price is paid)as they will require to decide whether or not to object.
6. STATUTORY NOTICES
6 (a) The Local Authority have the power to serve Statutory Repair Notices oncommon property, usually tenements. It is felt therefore that the watershedfor liability between buyer and seller should be the date of conclusion ofmissives i.e. if the notice has been issued during the seller's previousperiod of ownership or before they will remain responsible with the change inliability being the date when the contract is concluded.
6 (b) If the seller has received written notification etc. of any scheme ofcommon repairs or improvements he requires to tell his Solicitor so that thiscan be disclosed in a qualified acceptance to the offer.
6 (c) - (g) provides an agreed mechanism for retention of a sum to deal with suchnotices.
7. FACTORING
This clause is largely self explanatory. If the property is a modernflat and part of a larger building or a tenement or is a house forming part ofa development with common amenity areas this clause may apply. Any charges formaintenance of common items will be apportioned. If there is a Factor he willcarry out the apportionment. The seller's Solicitor shall notify the Factorof the change of ownership. Please note that the seller will remain liable forrepairs authorised or instructed or work undertaken but not yet completed orcompleted but not yet paid for.
8. ALTERATIONS
The topic of structural alterations to the property has been acontentious topic for many years. The clause however seeks to set out therelevant paperwork which will be required in the event of alterations havingbeen carried out to any property. The clause however states that thispaperwork should only be sought for works which have been carried out in thepast 20 years (10 years for windows) The intention behind the clause is thathistoric alterations, particularly those of a trivial nature should no longerbe the subject of lengthy in depth investigation as part of a standardconveyancing process unless other circumstances dictate to the contrary.
9. FAMILY LAW ACT/LITIGATION
Self explanatory.
10. ACCESS
Self explanatory.
11. NEIGHBOUR DISPUTES
Self explanatory.
12. UTILITIES
Self explanatory.
13. BREACH OF CONTRACT BY SELLER
If the Seller does not implement his part of the Missives this provides a rightto the purchaser to claim damages for reasonable losses.
14. BREACH OF CONTRACT BY PURCHASER
If the purchaser fails to implement his part of the contract by paying theprice before 2pm on the Date of Entry, this specifies the remedies open to theseller.
15. N.H.B.C/BUILDING WARRANTY
Many new homes offer protection to owners of houses built by developersif serious structural defects appear in the first ten years. There are anumber of schemes operated by NHBC and others acceptable to the Council ofMortgage Lenders('CML'). Most banks and building societies are covered bythe CML Lender's Handbook for Scotland.
16. TITLE CONDITIONS
There are various title matters that need to be looked at by a purchaser's Solicitor to check that the title is a valid and marketable (i.e.readily saleable) title. The titles will be exhibited to the purchaser's Solicitor and the purchaser will have a right to resile (i.e. get out of thecontract) with no penalty to either seller or purchaser provided the purchaser's solicitors intimate within ten working days of receiving thetitles that there is a problem and this problem cannot be rectified within sixweeks of intimation of the problem.
17. SETTLEMENT
This provides for a standard provision that the price will be paid onthe Date of Entry in return for the formal deed transferring title (theDisposition), an empty property and keys for same.
18. REGISTRATION OF TITLE
These provide technical provisions dealing with the required procedurefor registering the purchaser's title in the Land Register of Scotland.
19. INCORPORATED BODIES
This clause protects the Purchaser where the Seller is a LimitedCompany or other 'Incorporated Body'.
20. RISK
Without this condition the risk of destruction or damage would pass toa purchaser when the Missives are concluded despite the fact that the purchaserwould not yet be living in the house. It is thought to be fairer that theseller should bear the risk until the date on which the keys are handed over.
21. PROPERTY ENQUIRY CERTIFICATE ('PEC')
It is normal for the seller to pay for and produce a certificate fromthe Local Authority or a private searching company confirming that there isnothing adverse from a planning point of view. If the PEC discloses any matterwhich is materially prejudicial to the purchaser or to the property thepurchaser can resile from the Missives (i.e. get out of the contract) withoutpenalty provided the purchaser's solicitors intimate within ten working daysof receiving the PEC that there is a problem and this problem cannot berectified within six weeks of intimation of the problem.
22. COAL AUTHORITY REPORT
It is now common for a seller to obtain at his expense a Coal MiningReport if the Property is within a local coal mining area. The purchaser isentitled to resile from the Missives (i.e. get out of the contract) withoutpenalty if something materially prejudicial to the property of thepurchaser's proposed use of the property is disclosed provided the purchaserexercises the right to resile within five working days of receipt by hisSolicitor of the Coal Mining Report.
23. OCCUPANCY RIGHTS
If the property is a matrimonial home and is in the sole name of eitherthe husband or wife then the husband or wife not named on the title may haveoccupancy rights. If the seller is in a civil partnership then the partner mayhave a similar right.
24. SUPERSESSION OF MISSIVES
This clause does not mean that the seller is responsible for theproperty for two years. It does mean that any part of the Missives or contractceases to be enforceable after a period of two years except regarding Clause 5and 16 which remain in full force until implemented.
25. SELLER'S ADDRESS
Self explanatory.
26. LIMITATION OF CLAIMS
This clause is designed to give protection to a purchaser against abreach of the contract by the seller which becomes apparent after the purchaserhas paid the price and received the title deeds and keys. It allows thepurchaser to seek damages from the seller except in relation to the mattersmentioned. It is felt that claims under £100 are minor in nature (compared tothe value of the property) and that purchasers should be excluded from claimingfor such minor claims.
27. INTERPRETATION
Self explanatory.