What happens if you pull out before exchange of contracts

[heartbroken22]

We're buying our first house that we rent. Everything was okay until our neighbour has been giving us abuse and is very aggressive because we complained about the late night work he's been doing (think hammering, heavy drilling, breaking down walls). I don't think it's safe to live here.

We've paid our lawyer a deposit, paid broker for his help. Obviously we'll lose out on all that. But would we have to pay landlord/seller any money if we pull out? Nothings been signed.

no. You lose everything you’ve laid out and you piss of your vendor (particularly tricky if it’s your landlord) but you’re uncommitted until exchange.

In terms of the sale, nothing other than possibly people feeling grumpy that you're not going ahead but that's not really an issue.

But you will also have to serve notice under your tenancy agreement and your LL is the one who is going to feel grumpy that you aren't buying it. There's nothing he/she can do but you are likely to have to stick firmly to the notice periods (as will the LL of course).

You'll also have to pay the solicitor for the work they have done so far.

If you haven't exchanged, you won't loose the deposit (or are you saying the solicitor has taken an advance on the fees? Yes, you will loose that plus maybe a bit more for work done).

I think you will need to be looking for a new rental tho. I'd be giving you notice at the first available opportunity if I was your landlord.

My solicitor acted on a no sale no fee basis, so check if that is the situation with yours.

What country are you in?

@heartbroken22 if you are in England then you should not owe the seller any money in connection with the sale. I am surprised that you needed to pay a broker, but maybe it works that way in some areas. Normally the broker works for the seller and earns a commission only if they sell the house.

Your rental contract is a separate issue and you would normally need to give whatever notice is required, and continue to pay rent through the notice period.

You have definitely dodged a bullet by not exchanging contracts before learning that your neighbour is an aggressive prick. Regardless of where you are, it will definitely be worth absorbing some level of financial loss in order to move away from that person! Do not buy the house, no matter what sort of enticements they may offer - life is too short to live with a very difficult neighbour if you can avoid it, and you still can!

Your landlord is actually in a much tougher predicament than you. If you tell them that you are pulling out due to this issue with the neighbour, then they will normally be required to disclose that fact to any new potential buyer, so they may struggle to sell the house to anyone.

Just to update. Landlord asked us again if we want to buy the house and had we changed our minds. I said no we don't want to buy it. Apparently he thinks he can get more for the house and is enticed by how much he can get. We have 2 months to find a new property or buy this one. Definitely don't want to buy this one but sad and anxious about having to rent a new place instead of buying one.

Why don’t you buy a different house then? Your landlord can’t evict you in 2 months so you could hold on a bit longer where you are if you were part way through a purchase

What if he decides to evict in 2 months? And the house we buy takes more than 2 months to buy?

He can't evict you that quickly but if he serves notice properly and you don't leave, he can then go through the process so if your purchase doesn't line up time wise, you'll have to find somewhere else as a stop gap.

Regardless of the legal rights and wrongs of the whole thing, you might not want to wait til bailiffs evict you or at least check that won't go badly with a mortgage company. There's a time lag between the end of the notice period and bailiffs turning up bit probably worth mentioning.

It's highly unlikely that you'll able to complete the purchase of any property in 2 months.

Why not have the conversation with the LL now about moving onto a rolling contract? He won't get anyone to buy the property any quicker than 2 months either so I'm sure LL would be happy for you to stay until the property is sold.

It will take much longer than 2 months if he has to legally evict you because you aren’t ready to leave.
It depends if you want to buy somewhere else but if you do I would tell him that you are looking and ask to move to a rolling contract as suggested.