The Managing Trustees receive an offer to buy a property – what do they do next?
By the time the Managing Trustees receive an offer, the Qualified Surveyor’s Report (“QSR”) will have been approved by TMCP and the Managing Trustees will have marketed the property in line with the advice of the surveyor as set out in the QSR.
When an offer is received, it is the Managing Trustees who decide whether or not to accept it. However, the decision to accept the offer must be based on the advice of the surveyor not the selling agent.
Managing Trustees need speak to their surveyor once an offer has been received and ask their surveyor to advise whether or not the offer is considered to be best price. Under Model Trust 16(b), the Managing Trustees are under an obligation to obtain the best price for the property. In order for the surveyor to confirm best price, he/she will need to consider whether the property has been adequately marketed. It is usual for the marketing of the property to have been carried out by the selling agent and not by the surveyor. In these circumstances, the surveyor should liaise with the selling agent to confirm the method of marketing is in line with the surveyor’s advice and also the period the property was marketed for before the offer was received. Once the surveyor is in receipt of the marketing information from the selling agent, the surveyor should be in a position to confirm whether or not the offer should be accepted.
Often Managing Trustees will need to decide whether or not to accept an offer relatively quickly and are anxious not to lose a sale. Speak to your surveyor over the telephone and ask the surveyor to confirm verbally whether the Managing Trustees can proceed and accept the offer. Obtain confirmation from the surveyor that they will follow up with confirmation of best price in writing. The surveyor should be asked to provide a short letter/email to TMCP confirming the property has been “adequately marketed” and the purchase price “is the best price reasonably obtainable”. Although the surveyor’s confirmation of best price must be provided in writing to TMCP before exchange of contracts, Managing Trustees may want to provide it at their earliest convenience in order to avoid delays.
The Sale Guidance for Managing Trustees is a useful tool to be used by the Managing Trustees when selling the property as it provides a step by step guide of the process of selling a property.
If you have any queries in relation to the guidance in this document please contact TMCP Legal for further assistance.