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The Consumer Code for Contracting Authorities (hereinafter referred to as `the Code`) drawn up in 2010 stipulates that the reservation contract should determine the costs likely to be borne by the buyer. The seller can only deduct an amount actually incurred during the processing and execution of the reservation and it is not acceptable to deduct a percentage or a fixed amount. As booking fees can be significant (up to £20,000 at the top of the market), the agreement should be checked before signing by a lawyer for the buyer. In practice, however, it is typical for buyers to sign booking agreements before hiring their lawyer. Before signing a reservation agreement, sellers must verify that the conditions comply with the requirements of the code and ensure that they do not enter into another agreement for the same property with another party. A reservation contract can be used when buying new homes if a buyer reserves the right to buy real estate for a set period of time. During this period (known as the “Booking Period”), the Seller agrees not to sell to any other party. As part of the agreement, the buyer pays a discount (known as the “booking fee”). The booking period usually lasts 28 days.

Reservation agreements differ from exclusivity agreements used to give the buyer a certain guarantee before the outbidding, by setting a period during which the seller undertakes not to enter into negotiations with another party. As part of a reservation contract, the seller cannot conclude another contract of this type with another party, but can enter into negotiations. When exchanging contracts, the fees are deducted from the deposit, which is then placed. However, the buyer may decide at any time during the booking period not to continue the purchase and to terminate the contract. The tax is then refunded, less any costs incurred by the seller, such as legal and administrative costs….

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