Scottish Legal System
Scotland has a separate legal system from England and
a different tradition in selling property. Properties are normally put
up for sale on the open market and after a period of advertising a closing
date is fixed when offers in excess of the asking price are sought.
Traditionally the asking or upset price is fixed below the price expected
but the eventual outcome of the sale depends on competition amongst positive
purchasers and prevailing economic circumstances. At the appointed hour
on the closing date, the seller considers the terms of the offers received
and whilst he might have stated that he reserves the right not to accept
the highest or indeed any offer he almost invariably accepts the highest
bid ‘on the table’. Up until about ten years ago it was common
for solicitors, acting on behalf of their clients, to appear at the closing
time and submit their offer to the selling agent in person. Nowadays offers
are usually submitted by post, or more often sent by fax at five minutes
before the closing time.
In Scotland the offer is made through a Scottish solicitor who acts solely
in the interests of the buyer. The offer, known in Scotland as a missive,
takes the form of a letter setting out the terms of purchase, namely price,
entry date and any special conditions which are to apply, for example
stipulating the crops to be taken over and paid for over and above the
purchase price. In addition, the buyer’s solicitor will include
standard conditions to safeguard his client in respect that the seller’s
title is good, as in Scotland searches are carried out after offers have
been made. The seller’s solicitor will also include safeguards against
any adverse planning proposals, notices etc. which might subsequently
come to light and could affect the property.
The offer and acceptance usually need to be qualifed several times before
a bargain is concluded and the process can take several weeks to complete.
During this time the seller cannot deal with other parties even although
the property is not technically sold. Once the parties have a concluded
bargain it forms a binding contract on both parties which neither party
can resile from nor, at a later date, amend.
It is not practice in Scotland to accept or indeed make offers conditional
upon the sale of another property. Obviously from the seller’s point
of view there would be no point in accepting an offer subject to this
condition as once missives had been concluded, he (the seller) would be
unable to deal with other parties and would have made no progress with
his sale should the buyer eventually fail to complete. Buyers in Scotland
who are intending offering for a property normally obtain bridging facilities
before submitting an offer if they have not already sold their own property.
In order not to miss the opportunity to bid, while making financial arrangements
etc. intending parties should ask their solicitor to formally ‘note
their interest’ with the selling agent. Once an interest has been
noted, the selling agent is duty bound (but not legally committed) to
advise that party once a closing date has been fixed or if a pre-emptive
offer is suddenly received. Where no closing date had been fixed, the
selling agents may negotiate a price with the purchaser and prospective
purchasers should be aware that at any time they are free to submit an
offer to tempt the seller. However, once a closing date has been fixed,
the sale must continue to the final deadline so that all parties have
an opportunity to bid.