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James Styles, real estate consultant at Stephenson Harwood
Ben Stansfield, environment and planning partner at Stephenson Harwood
Miri Stickland, property business support lawyer at Forsters
Brie Stevens-Hoare QC, barrister and mediator at Hardwicke
Joanna Bhatia, solicitor in the Lexis®PSL property team
James Styles: My ‘trick or treat’ topic would be exclusivity agreements—where sellers give buyers a window of time to do their due diligence, during which time the seller won’t negotiate with anyone else.
Commercially, exclusivity agreements sound like a no-brainer and should be easy to document. In reality, this is a trick, as sellers and buyers both want, and think they are getting, different things. Sellers think the buyer will definitely buy
unless they discover something so fundamental that the property is unsellable (which they’re confident there won’t be because they’re sure their lawyers did a great job when they bought the property, right?). Buyers think
they have a definite right to buy the property if they want to, but don’t want to be under any obligation to do so (because while the property looks good they haven’t decided whether they want to buy or if they’re really
happy with the eye-watering price that they agreed to secure the deal). Therefore, in reality there is no meeting of minds.
Explaining to the parties that, instead of killing all the goodwill and wasting vast amounts of time (and money), the best thing to do is to simply set a tight timetable and get on with it is a treat. The cherry on the top is getting to an actual
exchange in less time than it would have taken to agree the exclusivity.
(Editor's note: For some further reading, check out our earlier blog post "Lock-out Agreements & Exclusivity - 6 key drafting points<")
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