How can I re write https://law.stackexchange.com/questions/57854/if-landlord-doesnt-accept-lockout-agreements-how-else-can-i-prevent-wasted-cos to make it on topic please? Here's the text of the question :
I'm trying to lease commercial space in England. most of these landlords are mega corporations. I have no bargaining or negotiating power. before I retain a solicitor to review any leases, I asked one landlord if he will agree a lock-out agreement. He refused on the basis that his corporation just doesn't accept them for small business owners like me. He said that I'll just have to bear the risk of gazumping and wasted costs like on solicitors.
Assume no landlord will accept lockout agreements. Then how can I prevent wasted costs?
A lock out agreement is an agreement between a property seller and a buyer giving the buyer exclusive rights to proceed with the purchase for a certain period of time. It stops the seller from negotiating with any other potential buyer during a lock out period. However, it does not guarantee an eventual sale to the buyer.
What it does do is protect both parties and gives reassurance in a climate where potential buyers can make offers, then withdraw; or where sellers accept an offer and then withdraw because they have been offered a higher amount from another buyer (gazumping).
What is Gazumping?
Gazumping refers to the process where a seller accepts a higher offer from a subsequent buyer after it has accepted an offer from someone else. It’s a particularly unsavoury practice because gazumping usually occurs when the conveyancing is already under way. Should the gazumping be successful, the first buyer will have no property – but will have a conveyancing bill for the work already done before the gazumping took place.
With gazumping on the increase many buyers now ask for an exclusivity or lock-out agreement. Under such agreements, the seller agrees not to negotiate with another prospective buyer for a period of time and the agreement often set out a deadline for the buyer to exchange contracts with obligations on the seller to assist the buyer in meeting that deadline. Often a deposit is paid by the buyer supposedly to cover the seller’s costs if the buyer does not proceed but the deposit is usually in excess of any likely abortive fees.
The disadvantage of exclusivity agreements is that time that could have been spent dealing with the legal due diligence to effect an early exchange of contracts is spent negotiating the exclusivity agreement. Which leaves more time for a seller to change his mind and negotiate with another party at a higher price.
And the agreement is not binding. A seller can decide to breach the exclusivity agreement by negotiating with another party at a higher price and simply return the deposit to the buyer. The offered price increase will exceed any abortive legal fees.
For such reasons, if a buyer does want to enter an exclusivity agreement then it should ensure that its costs will be covered if the seller decides to withdraw.
Better still, the buyer should endeavour to reach the stage at which he is prepared to exchange contracts as swiftly as possible and instruct his solicitor to commence legal due diligence whilst negotiating the exclusivity agreement. This is risky in terms of incurring potentially abortive fees but stands the best chance of binding parties to a transaction as soon as possible.
Neither gazumping nor gazundering are illegal despite leaving one party facing a loss – whether it be losing part of the purchase price or paying abortive fees. Such sharp practices are certainly not ‘gentlemanly’ and go against the moral protocol of proceeding with a transaction at the price on which you shook hands.