Early binding contracts are the most dangerous proposal in the government’s roadmap
Summary
The article argues that the government’s proposed move toward early binding contracts in home buying reforms could expose buyers to unfair financial and legal risk, particularly through reservation agreements and other pre-contract mechanisms. It cites examples of opaque drafting, hidden fees, and adverse incentives, and warns that increased digital dependence in conveyancing could amplify systemic risk.
Why it matters
Residential property surveyors are often involved in transactions where reservation agreements, buyer expectations, and chain risk can affect progress and completion. The article also highlights wider reform and digitalisation issues that may influence transaction processes, consumer risk, and professional practice.
Key points
- Campaigners say early binding contracts could disadvantage buyers before full legal and factual checks are complete.
- Examples cited include hidden fees, penalty-sharing clauses, and uneven risk allocation in reservation agreements.
- The article warns that some pre-contract schemes may distort the 'no sale, no fee' principle and create perverse incentives.
- It raises concerns about deeper digitalisation of land and conveyancing systems, citing cyber risk.
- The piece argues government reform should reflect practitioner risk rather than commercial or sponsor interests.
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