Housebuilder Top Tip: Putting the reliable into reliance letter

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Housebuilder Top Tip: Putting the reliable into reliance letter

Published 26 March 2019

When provided with the benefit of a reliance letter, it is always worth checking whether the benefit is assignable to third parties and if so, on how many occasions.

However, what is often overlooked is that upon a subsequent sale of part of a property and the assignment of the benefit of the reliance letter to the incoming purchaser, you as the seller will lose the benefit yourself. Assignment upon a sale of part is therefore not possible should you continue to require the benefit of the reliance letter.

To avoid this situation, you can request that your reliance letter contains explicit wording requiring the consultant to provide, at your direction (and preferably without cost to you), an incoming purchaser of part with a further reliance letter in the same form. This will ensure that you and the incoming purchaser can both rely on the contents of the relevant report for which reliance has been provided.

Without this express provision, you would need to negotiate and potentially pay for a new letter of reliance from each consultant which could be costly and time consuming and may well delay your sale.

If you would like us to review your letter of reliance precedent to ensure suitable wording is included please do contact us.

Authors

Douglas Traill-Stevenson

Douglas Traill-Stevenson

+44(0)20 7894 6166

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