‘Subject to loan’ and buying a house

Sir, – Now that sales of new-build homes are on the increase, many purchasers are unaware of a developing risk in the transaction. The time-honoured “subject to loan” clause has provided security for purchasers ,which allowed return of the deposit if anything went wrong such as loss of job, poor health, loan withdrawal or relationship break-ups. Would-be buyers could rescind the contract for sale without loss of deposit or without the risk of being sued for breach of contract.

However, 2018 has begun with a worrying withdrawal of the protective “subject to loan” clause by large developers of new homes. As a solicitor I have already had to advise two sets of buyers that they should not proceed without this protection in place.

The Law Society has issued a recommendation that has done nothing to dissuade developers from exposing often first-time buyers to considerable risk. I have little doubt that developers will invoke their entitlement to confiscate the deposit and indeed sue for breach of contract. – Yours, etc,





Dublin 6.