to have believed gazumping was illegal in Scotland

[stretto]

We had an offer accepted a few weeks ago for a property which was being sold by administrators after the previous owners' business collapsed. We are in Scotland, and the property is too. The administrators are London-based.

We heard on the grapevine on Friday that a new closing date had been set but we weren't informed.

Now this morning we have been told that the administrators have accepted another offer (cash) which we didn't even know was being made.
I know gazumping happens in England but isn't it illegal in Scotland? Could it be that the London-based administrators didn't know it's illegal here?

The misconception on Scottish practice is because of the rules Scottish solicitors are bound by. They cannot facilitate gazumping/gazundering.

www.lawscot.org.uk/rules-and-guidance/section-f/division-c-conveyancing/guidance/gazumping,-gazundering-and-closing-dates

So if no Scottish solicitors involved in offer/acceptance then this can happen, unless you have a concluded written contract.

Sorry trying link again

www.lawscot.org.uk/rules-and-guidance/section-f/division-c-conveyancing/guidance/gazumping,-gazundering-and-closing-dates

How intersting. I'd always assumed it was something that just couldn't happen up here however I see the issue if it isn't Scottish solicitors involved.

Sorry OP, that sounds shit and totally underhand - what are your solicitors saying about it?

Thank you.
Our Scottish solicitor wasn't even informed it had been put back on the market. Now we can't get hold of him - he's in meetings all day.
So - does this mean that if an English-based adminstrator is using an English solicitor, they can just ignore the rules that bind Scottish solicitors?

As in many things, the general understanding of 'the law' is different from the reality. Property conveyancing in Scotland is not as black and white as people think.

I think until you conclude missives nothing is set in stone but your scottish solicitor can't facilitate gazumping.

www.scottishpropertycomment.co.uk/gazumping-in-scotland-why-it-doesnt-tend-to-happen

Put in a higher offer, would they not be obliged to accept the highest offer available for the creditors?

The English based administrators would be a bit mad if they were not using solicitors qualified in Scots law to deal with the sale of a property in Scotland. But even assuming they were the rules simply mean that their Scottish solicitors would have to withdraw from acting if they were asked by their client to move with this higher offer having previously accepted (even if not concluded a contract on) a previous offer.

It might be that your solicitor can speak to them and explain the situation and persaude them to revert to the original offer, but the administrators themselves are not bound unless a contract in writing has been concluded. Sorry.

quoteunquote - is that still possible if they say they've accepted another?

Is it not also slightly different in administration cases that the administrators are bound to get the best possible deal for the creditors? so they are legally obliged to accept a higher offer, even if technically that causes problems with gazumping?

To be fair, nothing's guaranteed till the missives are signed...

Yes, anything goes, make an offer, do you know who the creditors are?

I've been successful with lower bids, because I was in the position of being a cash buyer and or having no chain.

If you make a higher offer they are obliged to consider the offer, the creditors would be interested to know why a higher offer wasn't accepted.

In addition to what has been said already, if its administrators that are selling, their primary duty will be to get the highest possible price, and they may consider that your offer did not achieve this. i.e. administrators are not bound by the courtesy of solicitors' fiduciary duties.

This is all very very helpful. Our solicitor is calling soon. You have helped very much. I will post more in due course.

My understanding is that administrators have to keep such a property on the market until it's sold, to keep trying to get the best price for it possible. It looks like someone else topped your offer, but it's unfortunate that you didn't know that they'd have to do this.

I used to be a conveyancing lawyer in Scotland until I had 3 children in quick succession and would confirm that the sale isn't definite until missives are concluded. Usually, however, this is just a formailty, you don't want to lock yourself in to a date until you have confirmation the mortgage funds will be through etc. It should be enough that the offer has been accepted in principle and if a client did find someone offering higher I think I would have had to stop acting for them (never actually had that happen). This is appalling unprofessional behaviour that would piss off other firms. The English firm must have an inhouse Scots qualified solicitor to do the conveyancing, either that or they farm out the work to a company up here after accepting the offer, so they may not know our system. Very shitty behaviour but I don't think there is any form of redress available. Another firm local to us did something of this nature and if someone came to us but we were unable to represent them, wewould send them on to a third firm, they missed out on a lot of business in this way. It doesn't go unnoticed.