Sale and Purchase Agreement
This is the legal agreement drawn up between the vendor and the purchaser of a property and is signed in two stages:
1. Provisional Agreement for Sale and Purchase
Once the vendor and the purchaser have agreed on all of the terms, the Provisional Agreement is signed. This identifies both parties and the property, states the sale price and the amounts to be paid at various stages, and stipulates the commission to be paid by both parties to the estate agent. Upon signing the Agreement, the purchaser must pay an initial deposit (usually equivalent to 3% of the purchase price) to the vendor. Once this Agreement is signed, neither party can back out of the sale and purchase except by forfeiting the amount of the initial deposit and agency fees, plus the total amount of the stamp duty due.
2. Formal Agreement for Sale and Purchase
A detailed agreement stipulating all of the terms and conditions of the sale and purchase. This is always drawn up and handled by lawyers as part of the conveyancing procedure.
On the signing of a tenancy agreement, the tenant pays to the landlord a sum of money as security against any failure to conform with the terms of the lease. This is usually two months’ rent plus two months’ management fees, but in the case of personal leases it can be three months’ rent plus three months’ management fees.
A lease executed by the lessee of an estate to a third person that conveys the same estate for a shorter term, or a portion of the estate for the same or a shorter term, is a sublease.
A contract under which the owner appoints a real estate agent as the one exclusive agent for a designated period of time to sell/rent the property on the owner's stated terms, and under which the owner agrees to pay the agenta commission.
A duty payable to the government upon the signing of a lease. The amount is 0.5 per cent of the annual rent and is usually divided equally between both landlord and tenant.