The following Property practice note provides comprehensive and up to date legal information covering:
A sub-sale is where A contracts to sell a property to B but, before completing the purchase from A, B then contracts to sell the property to C. There are two sale contracts (A–B and B–C). Completion can be effected either by a single transfer (A–C at B’s direction) or by two transfers (A–B and B–C). An assignment is where A contracts with B and B then assigns the benefit (but not the burden) of the contract to C. (This should be distinguished from a novation, which is where A contracts with B who then transfers (by novation) its rights and obligations under the contract to C). Completion is then effected by a single transfer from A–C.
The common situations where a purchaser may wish to sub-contract or assign before completion of the original contract include:
a change in market conditions (either positive or negative)
a change in the purchaser's financial, business or operational circumstances where they can no longer afford or no longer need the entire property
delay between exchange and completion (for example buying off-plan) where the purchaser wishes to realise profit early
where the purchaser agrees a good price due to its standing or special relationship with the seller and is able to sell on the property for a profit. Issues of confidentiality and reputation of the seller and
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