1. Home
  2. Conveyancing
  3. Questions and Answers
  4. Why do I have to pay a reservation fee?

Why do I have to pay a reservation fee?

  1. Simon
  2. Buying a house questions and answers

Question

I am looking to buy a new build property (not even started building), and have been asked to pay £2k for a MSE Exchange of Contracts. Is that standard?

Answer

It is common practice for a builder/developer to request a reservation fee is paid to them for a property that is either ‘off plan’ or in the process of being built.

We would recommend that the proposed reservation form is sent to a solicitor to review before you agree to pay the reservation fee and sign the reservation form. The reservation fee is then deducted off the final purchase price due once completion has taken place.

If the purchaser elects to withdraw from the transaction prior to Exchange of Contracts taking place then the builder/developer will retain the reservation fee that has been paid. It is common for the reservation fee to be between £2,000.00 to £5,000.00 depending upon the location of the development and price of the property.

Gareth Brooks, RMNJ Solicitors

Gareth Brooks

Gareth Brooks

RMNJ Solicitors

Ask a question
 

Ready to get quotes?

Compare conveyancing fees from up to 4 solicitors

Get conveyancing quotes

We've already helped over 2,812,462 movers

11,650 user reviews

So far we have found the service very good. So much so that we have used them for both transactions. Emails are replied to very quickly and the online service is a lot quicker than the main stream system. No problems so far!

Emma on 26/01/2020

As featured in