“More than 1 in 3 agreed property deals in England & Wales fall through…
Gazeal is a new system for property sales, which binds both parties when they are ready to agree a deal. Neither side can walk away, or move the goalposts.
Unfortunately, in England & Wales, an agreement to buy or sell a house is worthless until Exchange of Contracts. Until then, it is not legally binding. The conveyancing process takes weeks, and while the lawyers do their checks, problems arise.
Gazeal protects both sides by putting the Title into Escrow pending Exchange. It’s like holding a Title in Trust, subject to the terms of your deal. The Gazeal product is simple – it is a lock-out agreement backed by Title Insurance. What is slightly unusual is that the agreement is made between three parties; Seller, Buyer and Gazeal Ltd.
The terms of the Gazeal lock-out agreement are that the Seller agrees to sell, and the Buyer agrees to buy on receipt of confirmation from Gazeal Ltd that the Title is good and marketable, and that Title Insurance will be issued for the benefit of the Buyer on Completion. This provides the Buyer with peace of mind for the duration of their ownership of the property, and protects against any Title defects.”
The above wording was taken from the Gazeal website.
Now I have been in this conveyancing lark for as long as Madonna has been strutting her stuff and I have been waiting for the day that someone can take the stress, anxiety and uncertainty out of the buying and selling of property. Will Gazeal do that?
Before I pass comment I would stress that I am due to meet up with the brains behind this concept, Director Duncan Samuels, shortly. When I have done that, I will comment further. However, doesn’t the following sentence sum up why we have the system we do:
“The conveyancing process takes weeks, and while the lawyers do their checks, problems arise.”
Of course they do, because if there are problems we want to know about them before we are legally committed to proceed:
- Negative surveys
- Road proposals
- Planning and Building Regulation breaches
- Covenants that prevent you doing what you want with the property
- Neighbour Disputes
- Environmental/flooding concerns
- Mortgage offers with unexpected conditions
The list goes on…
Call me an old cynic but I don’t see this working without a change in our Land Law and conveyancing process. In addition, Gazeal appears to be about guaranteeing the title. Is that really necessary? Especially when, according to Gazeal itself, ‘fewer than 1% of transactions fail because of a defect in Title’.
It might work with new builds, it might work with very short chains and it seems similar to the system in Scotland (which has its pros and cons), but will it work in England and Wales for the majority of transactions? Your comments would be appreciated, and as I have said my further views will follow once I have met with Mr Samuels.
Two final points:
1. Do most people really want to be tied in so quickly?
2. I would like to see a copy of the lock-out agreement and Title Insurance policy
If Duncan has cracked it, power to his elbow, he is a better man than me!
*Rob Hailstone is founder of the Bold Legal Group