Recovering Abortive Conveyancing Costs When a Sale Falls Through: Who Can You Claim From?

The Uncomfortable Truth About Abortive Costs

In England and Wales, property transactions are not legally binding until exchange of contracts. This means that either party can walk away at any time before exchange — and unless a specific agreement is in place, there is generally no automatic right to recover costs from the other party.

This contrasts with Scotland, where the missives system creates a binding commitment much earlier in the process.

Each year, approximately 300,000 property transactions in England and Wales collapse before completion, according to industry data. Buyers and sellers collectively lose hundreds of millions of pounds in abortive costs. Understanding what you can and cannot recover is important before you commit significant expenditure to a transaction that may not proceed.

Typical Abortive Costs

A buyer whose purchase collapses before exchange may have incurred:

• Solicitor or conveyancer fees (often £500–£1,500 even for incomplete work)
• Survey costs (£400–£1,500 or more for a building survey)
• Mortgage valuation fee (£100–£500)
• Mortgage product fee (£500–£2,000, sometimes non-refundable)
• Search fees (£300–£600)

A seller may have incurred:

• Estate agent fees (usually no commission if the sale falls through, but sometimes admin fees)
• Solicitor or conveyancer fees for work done on the draft contract and replies to enquiries

Can You Claim from the Other Party?

In Most Cases, No

Because neither party is contractually bound before exchange, the other party has a right to withdraw without liability for your costs. This is a fundamental feature of English property law.

There are very limited exceptions.

Lock-Out Agreements and Exclusivity Agreements

If the parties agreed in writing to an exclusivity period — during which neither would negotiate with a third party — and the seller broke that exclusivity (for example, by accepting a higher offer from another buyer during the agreed period), the buyer may have a claim for breach of that agreement.

Exclusivity agreements must be:

• In writing
• Signed by both parties
• Clear about the duration and terms

An informal verbal assurance is almost certainly unenforceable. A formal exclusivity agreement (sometimes called a "lock-out agreement") is binding if properly drafted.

Misrepresentation by the Seller

If the transaction collapsed because the seller (or their agent) made a fraudulent or negligent misrepresentation — for example, a false answer to enquiries about planning history or disputes — you may have a claim under the Misrepresentation Act 1967. This is a complex legal area and you should take specialist advice.

Your Own Solicitor's Error

If the collapse was caused by your solicitor's negligence — for example, they failed to identify a title defect that should have been spotted before you committed expenditure — you may be able to recover costs from the solicitor. See our guide to solicitor negligence claims.

Can You Claim Survey Costs from the Seller?

Generally, no. Survey costs are incurred at the buyer's risk. If the survey reveals a problem that causes you to withdraw, that is exactly the purpose the survey served — it protected you from making a bad purchase.

However, if a seller or agent actively misrepresented the property's condition, and the survey cost was incurred in reliance on that misrepresentation, there may be a claim — though this is difficult to establish.

What About Mortgage Fees?

Mortgage valuation fees are typically non-recoverable if the purchase falls through — they are charged by the lender and are sunk costs.

Mortgage product fees (sometimes called arrangement fees) may be refundable if the mortgage offer has not been drawn down. Check your mortgage offer documents carefully for the refund terms — some lenders refund part or all of the fee if you withdraw before drawdown.

Practical Steps to Minimise Abortive Cost Risk

1. Use a no-sale-no-fee conveyancer — many conveyancers offer this arrangement, meaning you pay nothing if the purchase falls through before exchange

2. Commission a survey only after satisfactory enquiries — do not order an expensive building survey before basic searches and enquiries are satisfactorily resolved

3. Consider indemnity insurance — some insurers offer abortive cost protection for buyers

4. Negotiate an exclusivity agreement for high-value or complex transactions

Property Passport UK and Transaction Records

If you store correspondence, search results, and reports in Property Passport UK throughout a transaction, you have a complete, dated record if you later need to establish a misrepresentation claim or a dispute about when information was disclosed. This contemporaneous record is significantly more persuasive than recollections of events months after the fact.