High-value country property transactions have enjoyed a boom over the past few months, leading to an increasing trend towards the use of Exclusivity Agreements, also known as ‘lock-out agreements’.
An Exclusivity Agreement is normally a tool used by a buyer to provide them with an exclusive opportunity to do due diligence on a property, and carry out contract negotiations during a specified period without threat of the seller continuing to market the property. An Exclusivity Agreement is commonly entered into before a buyer’s solicitor has started due diligence work on the property, but this can mean sellers spend time and money entering into an Exclusivity Agreement only for the buyer to drop out at a later date, after due diligence finds problems with the property. As a result, an Exclusivity Agreement is best used when a buyer is overwhelmingly set on a property, and unlikely to be put off by minor issues raised in the due diligence process.
If you’d like any advice on the use of these agreements, do get in touch.