Hi there,
having started investing into property, I came across all sorts of clauses one can/should put into the purchase agreement to be able to walk away if anything dissatisfying comes up. For example, at my last (and first) purchase I included a finance clause, a builer's report clause and a rental approval clause.
Recently, I have heard of a clause which seems to replace all (?) other clauses called "Due Diligence Clause". The advantage apparently is that you can increase your power of negotiation in the way that you do not have a finance clause (indicating you have sorted out your finance already). If now anything comes up like dissatisfying rental approval, LIM or builder's report or even the failure of arranging finance, you can refer to the due diligence clause and walk away.
It would be great if you could comment an that. Do I only need to include a due diligence clause (wording below) to replace all other clauses? Is this clause robust enough to exit the agreement easily? Is it legal and wise to make multiple offers simultaneously although one can only afford to buy one property? If so, what is a safe way to do that, if not by due diligence clause?
What do you think about the wording of this due diligence clause:
"This agreement is entirely conditional upon the Purchaser in its sole discretion being satisfied that the property is suitable for the Purchaser’s intended uses following the Purchaser carrying out due diligence investigations on the overall viability of the property and including but not limited to searching any and all easements, and of any requirements of the local authority or financier, this clause is for the sole benefit of the Purchaser and the Purchaser shall have until 4pm on 10th working day from the date of this contract to give to the Vendor’s solicitor notice that this clause is satisfied failing which the contract shall be at an end. This clause may be waived by the purchaser prior to the prescribed time at the sole discretion of the purchaser."
Your advice is much appreciated!
Many thanks,
Fynn
having started investing into property, I came across all sorts of clauses one can/should put into the purchase agreement to be able to walk away if anything dissatisfying comes up. For example, at my last (and first) purchase I included a finance clause, a builer's report clause and a rental approval clause.
Recently, I have heard of a clause which seems to replace all (?) other clauses called "Due Diligence Clause". The advantage apparently is that you can increase your power of negotiation in the way that you do not have a finance clause (indicating you have sorted out your finance already). If now anything comes up like dissatisfying rental approval, LIM or builder's report or even the failure of arranging finance, you can refer to the due diligence clause and walk away.
It would be great if you could comment an that. Do I only need to include a due diligence clause (wording below) to replace all other clauses? Is this clause robust enough to exit the agreement easily? Is it legal and wise to make multiple offers simultaneously although one can only afford to buy one property? If so, what is a safe way to do that, if not by due diligence clause?
What do you think about the wording of this due diligence clause:
"This agreement is entirely conditional upon the Purchaser in its sole discretion being satisfied that the property is suitable for the Purchaser’s intended uses following the Purchaser carrying out due diligence investigations on the overall viability of the property and including but not limited to searching any and all easements, and of any requirements of the local authority or financier, this clause is for the sole benefit of the Purchaser and the Purchaser shall have until 4pm on 10th working day from the date of this contract to give to the Vendor’s solicitor notice that this clause is satisfied failing which the contract shall be at an end. This clause may be waived by the purchaser prior to the prescribed time at the sole discretion of the purchaser."
Your advice is much appreciated!
Many thanks,
Fynn
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