Whether you are a seasoned purchaser of properties or whether you are about to embark on your first purchase, it is important that all purchasers are aware that the process involved in contracting to buy a property has significantly changed in the past few months.
All property transactions commencing post 1 January 2019 must now incorporate the provisions of the Law Society of Ireland 2019 Contract for Sale (“the 2019 Contract”) which is very different to the previous version of the Contract for Sale that was used.
The 2019 Contract has significant implications for purchasers in particular. By signing a contract, the purchaser is deemed to accept the title on offer and the planning history of the property. For this reason, a full investigation of title must now be carried out pre-contract by a purchaser’s solicitor. The possibility of raising title queries post contract has been restricted to extremely limited circumstances. The implication of this for anyone purchasing a property is that its due diligence, both legal, survey and planning must be fully completed before they sign on the dotted line. This will of course have implications for any purchaser who decides not to go ahead, just before contracts are signed as the expense will already have been incurred.
The obligation on the Seller to disclose any title, planning or other issues affecting the property that he is aware of remains. If there is an issue not evident from title or searches but evident from inspection, then the purchaser is prohibited from requesting any further information or documentation in relation to that issue once contracts are signed and exchanged.
It is more important than ever for purchasers to inspect the property, boundaries and planning register thoroughly prior to signing contracts in order to ensure that any clarification required is sought before contracts are entered into.
While the new regime is likely to lead to a slightly longer lead-in period before contracts are signed, the benefit of this approach for purchasers is that issues are identified at an early stage and before a binding contract is in place. It is much less likely that unexpected issues will arise on completion, and therefore the potential for costly contractual disputes is significantly reduced. The intention is that there should be a clear and quick path to completion once the contract is signed which is good news for all involved in the transaction.