What is a Contract Report when buying a house?

Here is a sample contract report. As you will see it manages to be wordy without telling you a great deal:





Re: 22 Acacia Avenue Anyville Northampton NN3 2AB

Enclosures: 1. Copy Entries of Title Number NN1186387 and Filed plan.

2. Copy Seller's Property Information Form.

3. Fixture and Fittings List.

4. Copy Transfer 5th September 1988 (to follow)

We comment as follows:-


This is a freehold house at 22 Acacia Anyville Northampton which is shown edged in red on the copy Filed Plan of Title Number NN1186387. You should check the plans to ensure that it is indeed the property you are buying and that they reflect its true extent.

Land Registry and Transfer plans are to a small scale and they are not intended to show the precise location of each boundary; these should be checked on site and any significant discrepancies referred to us so that we can seek clarification from the seller.

You should inspect the property to ensure that it is only occupied by the Seller and his immediate family and let us know if this is not the case.

The 'T' marks facing inwards from the boundaries denote those boundaries that will be your responsibility for maintenance and repair. Should no indication exist or should a wall be used by this property in conjunction with an adjoining property (such as the wall between semi-detached or terraced houses) these walls or boundary fences will be maintained jointly with your neighbour.


This is stated to be £85,000.00. .

The contract also shows you buying chattels as shown on the list forwarded herewith. You should check the list carefully to ensure it accords with your understanding of the agreement you have reached with the Seller. Should you have any queries, please let me know.


Please note that the property is sold as it stands and your Seller offers no warranty or guarantee as to its condition. It if for you to be satisfied that the property is in good condition and worth the asking price. If you expect the sellers to remedy (or pay for the remedy of) any defects, this will have to be agreed with them before contracts are exchanged and special provisions added to the contract.


The Seller has answered the usual questions raised when one buys a property and copies are enclosed. The replies are usually couched in cautious terms to the extent that little information is really given.

This makes it all the more important for a buyer to have a survey undertaken to ensure that the property is sound and worth the price. In the vast majority of cases it will be too late to complain of defects once you have bought the property.


It is for you to be satisfied that the services and systems at the property are in satisfactory condition. Buyer beware is the principle that applies. The same applies to any fixtures and fittings. You should therefore make sure you have inspected them and satisfied yourself as to their condition prior to exchange of contracts.

Please note, it is for you to check that items being purchased are indeed left and not taken by the seller.


The general rule concerning a house or flat purchase is 'caveat emptor' which means 'buyer bewar&' A prudent buyer will almost certainly arrange a house/flat buyers report or survey and valuation. The Building Society or Lender offering you a mortgage will have had only a valuation effected. This is a brief check by a valuer/surveyor to ensure the property is worth a value sufficient to lend you the amount requested in your application. It is not a proper survey and you will not necessarily be able to sue the valuer/surveyor should he have missed something.

Should your survey be unfavourable, you may wish to re-negotiate the price with the Seller or withdraw from the transaction altogether.


As you will have seen from the information leaflet sent to you at the start of this transaction, owners of land contaminated by a harmful substance could be responsible for its clean up and de-contamination. Depending on the site and the contamination, the cost could be enormous - perhaps thousands of pounds.

We mentioned to you that a search can be undertaken and the resulting report will either already have been sent to you, or will be sent to you upon its receipt. We would ask that you read it carefully and if there are any issues of concern that you address them with your Surveyor. Your Surveyor is best qualified to assist you with these concerns. There are also some helpful numbers given in the report which will enable you to make some further and better enquiries.

Please note that the report is not conclusive. It is merely there to show indications and your ability to sue the compilers of the report if it contains an error, will be remote.

Land adversely affected by contamination, flooding or subsidence can suffer a reduction in value. The reduction may be substantial. Further, anxiety and concern over such issues could be substantial and it is therefore important that we address these matters now, before contracts are exchanged.


The property will be insured by your Seller until Exchange. Thereafter it will be your responsibility to do so. You can request your mortgage lender to arrange insurance cover on its block insurance policy. It is your responsibility to ensure that your chosen policy is acceptable to your lender and where applicable the lenders interest on the policy is noted.

If you are arranging your own policy you may be required to disclose the schedule of cover to the lender prior to our proceeding to exchange of contracts. If this is the lenders requirement please do so as soon as possible.

In any event please let us have a copy of the Schedule as soon as you have secured confirmation that cover is available.


The Local Search effected through the Local Authority confirms that Acacia Avenue is adopted and will be maintained by that Authority out of the public purse.

According to the Local Search there are no plans for the construction or re-routing of new or existing roads within a 200 metre radius of your property.


The main sewer into which your property drains is maintainable by the local Water Company. However, the connection from your property to the mains sewers will be a private connection and you will be responsible for repairs. Should this length of pipe be shared with your neighbour, then it will be a joint liability. You will probably find the cost of repairs may be covered by the buildings insurance. It will be prudent of you to check that this is the case.

Please note it is usually necessary to obtain consent from the water company for the erection of a building or extension of a building over or in the vicinity of a drain, sewer or disposal main. If you have any proposals in that regard you may wish to address them prior to exchange of contracts. It is always possible that the water company would not authorise your proposals. Now is the time to consider these issues. You will also need to carry out a site inspection to establish the routes of any pipes as the provisions of plans by the water company do not obviate the need to locate the pipes accurately through site surveys.


The title deeds are silent as to the route of the mains connections to the Property. You will note from the Sellers reply to Property Information Form question 5 that although the Seller confirms that certain mains services are available to the Property he is not aware of their route. If this is an issue of concern to you then we would advise that you contact your surveyor to make further inspection of the Property and revert to you prior to exchange of contracts. We will be happy to advise further when we have the surveyor's comments.


The Contract is based on the Standard Conditions of Sale, which are widely used for this type of transaction and which I do not propose to comment upon in detail. As the Contract is prepared by the Seller's solicitor it is weighted in favour of the Seller.

Importantly please note the following:

(a) It is usual to agree a completion date shortly before the exchange of contracts. That date

will then be inserted into the contract just before it is exchanged. This date will be discussed

with you and others in the chain to ensure that it is acceptable. Once contracts have been

exchanged that date will then be the completion date by which time the Seller must have

vacated the property (if they have not done so earlier) and we must send the completion money to their solicitors to reach their bank account by 2.00 pm that afternoon. You will be liable to pay daily interest at 4% per year above bank base rate if cleared funds are not available to us in time to remit the completion money early enough. We will therefore need to receive the funds both from yourself and from your lender well in time to ensure that cleared funds are available for our use on the morning of completion. We therefore recommend clients let us have building society cheques or bankers drafts five days before completion or arrange to have the monies telegraphed into our client account no later than the day before completion. Should you fail to complete on the completion day or within a prescribed period of time thereafter you will be in breach of contract. The contract makes provision for compensation to be paid by the party who is in default and you could be sued. The consequence of a delay in completion could therefore have serious financial implications for you.

(b) The property should be in the same condition at completion as when contracts were exchanged, fair wear and tear accepted. You should therefore check the property just before exchange and just before completion. You should immediately report anything which causes you concern

You would be entitled to withdraw from the transaction, with the return of your deposit, if the property was so badly damaged before the completion date to make it unusable. Similarly the Seller would have a right to withdraw if the damage was caused by a risk against which the Seller could not have been expected to insure and in that circumstance your deposit would be returned.

(c) Should there be any persons resident at the property in addition to or other than the Sellers, we must be informed as they will need to sign the contract to agree to vacate the property at the time of completion.

At exchange of contracts you are required to pay a deposit in the sum of 10% of the purchase price. This is notwithstanding that you may be receiving a mortgage offer in excess of 90% of the price as a Seller is not concerned about how you are to pay. However in some instances it is possible to agree a reduction in the deposit. This is normally on the basis that the full 10% remains owing and due even though a lesser sum may be acceptable at the exchange. If you believe that a reduced deposit is applicable in your case please let us know as soon as possible unless you have already done so.

If we cannot complete your purchase of the property due to the Seller's default, you will become

entitled to the return of the deposit (and may be able to claim damages for your loss). However,

under the Conditions of Sale all or part of the deposit money can be used by the Seller to pay the

deposit on a new property, (if they are indeed buying another property) and only the remainder, if any, will be retained by their solicitors as 'stakeholder' until we satisfactorily complete the purchase. Whilst this arrangement has become common practice, we must warn you that in the event of the matter not completing, it may be more difficult to obtain repayment of deposit money which has been used by the Sellers in that way, than if the whole deposit was retained by their solicitors until completion. On the other hand, very few house purchases totally fail to complete (though completion is occasionally delayed), and you may be prepared to take this risk rather than insisting that the Seller incurs the expense of obtaining separate bridging finance for the deposit on their new property. They will almost certainly insist that they do not incur such expenditure and it may be very difficult for you to resist their demands. If you are at all concerned please discuss this further with us

It usually takes some time to make the transfer of funds on the day of completion. It is probable therefore that you will not be granted the keys until mid-afternoon. We attempt, wherever possible, to have all the funds needed the day before completion takes place. This ensures that we can commit the funds into the Banking system for a transfer as soon as possible on completion day. These funds are at the mercy of the Bank at this stage and there is very little we can do to interfere.


You will become the registered proprietor with absolute freehold title of the property which is registered at the HM Land Registry under Title Number NN118638. This is considered to be the best form of title that one can obtain and to an extent it is guaranteed by the State. However there are rights and obligations which affect the use and enjoyment of the Property which you will find mentioned in the Deed dated 5th September 1988. I will send you a copy as soon as I am in receipt of the same.


The only enquiries that we usually make in the conveyancing process relating to the locality in which the property is situated are the Local Search. The Local Search will indicate whether there are any plans for the construction of a major road within 200 meters of the property.

We cannot warrant that this information is accurate and full and would therefore also advise you to contact the Planning Department of the Local Authority to obtain confirmation and for further details of any development that might cause you concern.


(a) The Keys will be released from the Estate Agents' Office on completion as discussed above

(b) The title deeds will be registered at HM Land Registry following completion and forwarded to your Lender to hold during the term of your mortgage or earlier redemption

(c) If your property is in a Church of England Parish with a church built in the medieval times or earlier (15th Century or older) and it has a Vicar (not a Rector) you may be liable to contribute towards the cost of repairs to the Chancel.

Establishing whether you might incur such liability is not easy. Records held at the Public Records Office are not complete and an investigation of those records has to be undertaken in person. It would be a fairly costly exercise.

A search is now available to identify if the property is in a Parish where a potential liability to make payment exists. We will effect this search and if it reveals that the property is affected we shall advise you further.


This report is intended to cover in a comprehensive fashion, all the issues relating to legal matters surrounding your proposed purchase of the property. Necessarily, we have to set the limits as to the extent that this Report may be relied upon. The limitations of this Report are:

1. This Report has been prepared exclusively for you and may not be relied on by any other party.

2. In accordance with our normal practice, when acting on purchases of property of a similar kind to the property, we have not inspected the property.

3. We have made the following assumptions:

a. That you are proposing to buy the property for use solely as a residence;

b. That you are happy with the physical condition of the property;

C. That if you propose carrying out any substantial work to the property, you are aware of the

requirements for planning permission and for various other consents that may be required in relation to those works, such as building regulation consent and possibly the consent of a person who has a covenant in their favour over the property."

This report does not obviate the need for you to read the documentation accompanying it or sent to you throughout the transaction. Should there be any items, at any point during the conveyancing, which still concern you or upon which you wish to make further enquiry or have more advice, you should immediately contact us.

Dated: 7 February 2015

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