Sale and Purchase Contract - The Transaction Where Money and Property Must Change Hands at Once
The risk of buying property does not end with legal due diligence: the property may be "clean" and the deal still fall apart, through a deposit that is never returned, a payment made before registration after which the seller vanishes, or a cash "difference" paid on the side that does not exist in the contract. Checking the property is covered in a separate guide; this page is about the transaction itself: the structure of the contract, the payment scheme, and what happens when one side breaks the terms.
A lawyer's work on a sale has two stages: before the deal, a contract that ties the transfer of money and of title to each other; and after the deal, when the deposit is not returned, the seller changes their mind, a defect surfaces in the flat or the buyer does not pay the balance. For both sides: the buyer, who risks the money, and the seller, who risks the property.
Updated · Practice area: Real estate lawyer
How to Pay Without Losing Either the Money or the Flat - Schemes by Risk
Title passes on registration in the registry; money passes on transfer. The interval between the two events is the main risk of the transaction, and the scheme exists to shorten that interval.
Structuring the Transaction Legally - From the Preliminary Agreement to Handover
Preliminary contract and deposit
When the purchase does not happen in a day (a loan, sorting out documents, the seller moving out), a preliminary contract fixes the price, the deadline, the conditions and a deposit or advance. Deposit and advance have different consequences: a deposit is kept by the seller if the buyer withdraws and returned double if the seller withdraws; an advance is simply refunded. The lawyer chooses the word deliberately.
Identifying the seller and their authority
Who signs: the owner in person, an attorney, a company director, all co-owners. For a sale by power of attorney: the validity of the power, its scope (the right to sell and to receive the money), whether it has been revoked; a spouse's consent for joint property.
The contract text
Price and currency, the payment scheme with deadlines, the condition of the property and what stays (furniture, appliances), the absence of encumbrances, deregistration of registered occupants, the handover date and act, liability for utility arrears, the consequences of breach for each clause. The Public Service Hall template contains none of this.
Registration and lifting encumbrances
Release of the mortgage as a payment condition or by a bank letter on the day of registration; the status of attachments, leases and easements in the contract. If the application is suspended, the lawyer follows through on correcting the defect.
Handover and the act
A handover act recording the condition, meter readings, keys and documents. The act is the starting point of any future hidden-defect dispute: what is described in the act is no longer "hidden".
On breach: rescission or compelled performance
The seller changes their mind: the buyer may demand compelled performance (registration) or double the deposit plus damages. The buyer does not pay: the seller may rescind and keep the deposit, or recover the balance. The lawyer writes these routes into the contract in advance so that no interpretation is needed in court.
You Bought a Flat and Found a Defect - What Can Be Claimed From the Seller and Within What Time
The seller is liable for defects that existed at handover and that the buyer did not know of and could not have discovered by ordinary inspection. An obvious defect (a crack in the wall, a damaged floor) counts as "seen"; a hidden one (concealed leaks, rewiring in breach of standards, a structural problem, an unauthorised alteration) is the seller's responsibility even if the seller did not know. A clause "in the condition seen" does not remove liability for hidden defects where the seller deliberately concealed them.
Remedies: a price reduction by the cost of repair, repair at the seller's expense, and for a material defect rescission with a refund and damages. Proof by expert report: the nature of the defect, when it arose (before or after handover), the cost of repair. Timing: immediate notice to the seller on discovery, and a limitation period that for real estate runs from handover; the lawyer advises written notice and an expert report before any repair.
The seller's protection lies in the contract: a detailed description of defects, a record of the buyer's inspection by an expert, a handover act with photos. A buyer who challenges the flat for "defects" 3 months later will demand proof from the seller that the defect arose afterwards, and that proof is exactly the act and the photos.
The Contract Clauses That Sale Disputes Are Born From
- Deposit or advance
- A deposit is punitive: on withdrawal the party at fault loses it (the buyer) or returns it double (the seller). An advance is only a prepayment and is refunded. The contract must say "deposit" and state its rule, or the court will treat it as an advance.
- The price in the contract
- Writing a price below the real one leaves the buyer with only the written sum on rescission and raises tax on the next sale. A cash "difference" does not exist legally. The lawyer advises the real price to both sides.
- Registered persons and occupants
- An obligation to deregister, with a deadline and a sanction; evicting an actual occupant (a relative, a tenant) means court for the buyer. A tenant's registered lease follows the property.
- Handover deadline
- After registration the seller often "lives on" for another 1-2 months; that period, liability during it and a penalty for delay belong in the contract.
- Utility and association arrears
- Certificates from every utility and the homeowners' association, the seller's liability for the period up to handover. In practice association arrears "follow" the new owner.
- Rescission rule
- Who may rescind, on what ground, within what time and with what consequence: loan refusal, documents that cannot be sorted out, a defect discovered. Without a rescission rule, every collapsed deal is a lawsuit.
What Protects the Seller From the Buyer - in the Contract and in the Process
- A deposit under a preliminary contract with a clear rule: on the buyer's withdrawal the deposit stays, on expiry of the deadline the property is released.
- Confirmation of payment before registration, or a mortgage registered for the balance: a registered buyer who does not pay means court.
- A handover act with photos and meter readings: the counter to a future hidden-defect claim.
- Known defects written into the contract: what is written carries no liability.
- For a sale by power of attorney: the scope of the power and the rule for receiving the money, so the money does not "stay" with the attorney.
- A tax check: whether the property was held for more or less than two years, and declaring the gain; the lawyer together with an accountant.
Three Sale Disputes
A seller who got a higher offer after the deposit
A preliminary contract, a 10,000 deposit; the seller sold to someone else for 20,000 more and offered the deposit back. Lawyer for the buyer: double the deposit plus damages (the market price difference, the cost of an alternative flat). The court awarded 20,000 in deposit plus damages; settlement before enforcement.
A flat "in the condition seen" with a concealed leak
Two months after purchase, a leak from the ceiling; the seller had hidden it with a new ceiling. Lawyer: an expert report (the defect existed before handover and was deliberately concealed), neighbours' testimony on earlier leaks, association records. A price reduction by the repair cost plus damages; the "condition seen" clause did not protect the seller.
Seller: a buyer who did not pay the balance
Registration on payment of 70%, the balance within 3 months; the buyer did not pay and had already let the flat. Lawyer for the seller: the contract provided a mortgage for the balance and a right of rescission; the balance was recovered with a penalty under the threat of enforcing the mortgage. Without the mortgage this would have been an ordinary unsecured claim.
Questions About Sale and Purchase Contracts
I paid a deposit and the bank refused my loan. Do I lose the deposit?
If loan approval is not written into the preliminary contract as a condition, the withdrawal is at your fault and the seller keeps the deposit. For a purchase with a loan the lawyer always adds a clause that the deposit is refunded if the loan is refused. Without it, negotiating a partial refund is often possible, since the seller keeps the property.
The Public Service Hall gives us a contract on the spot. Why do I need a lawyer?
The registry template contains only what registration needs: the parties, the property, the price. It says nothing about the payment scheme, the handover deadline, liability for defects and arrears, or the rescission rule. Every dispute is about exactly those missing clauses. A lawyer's contract is registered in the same registry; the form is the same, the content is different.
The flat is being sold by power of attorney and the owner is abroad. What should I check?
The original power of attorney, its date and term, authority specifically to sell this property and set the price, the right to receive the money, and a check for revocation in the notaries' register on the day of signing. For one issued abroad, legalisation. The lawyer advises direct contact with the owner and transferring the money to the owner's account, not the attorney's.
I bought a flat and the seller has not moved out for 4 months. What do I do?
You are the owner and the seller is occupying without basis: a claim for eviction and recovery of the property, plus damages (the rental equivalent) for every month and the contractual penalty if a handover deadline was written in. Entering by force and removing belongings is not allowed; it damages your position.
I am selling, and the buyer asks for part of the price in cash with defects written into the contract.
For the seller this is a double risk: the unwritten sum does not legally exist and cannot be proved on rescission or in a dispute, while the low price later gives the buyer a "price reduction" argument in a defect claim. There are tax consequences for both as well. The real price in the contract is the only protected option.
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