Strange but true: legal documents are significant

Many people seem to think that, when it suits them, they can shrug off their obligations under a lease or contract with no consequences. Believe it or not, this is not the case: legal documents do indeed have legal consequences

Contracts

If you enter into a contract, you are legally bound by it. It is no good claiming later that the contract does not suit you. Perhaps more importantly, until the buyer of your house has entered into a written contract to buy it, they are not bound to buy: so don’t count your chickens and commit to a rental property or spend lavish amounts of money on the property you hope to buy until at least contracts are exchanged

Leases

If you sign a lease as tenant, you are bound by it. If it is (say) a five-year lease then, in the absence of a break option, you are committed to paying the rent – and service charge – and fulfilling the repairing obligations until it expires, unless you can persuade your landlord to accept a surrender – which might well be at a significant cost to you

Mortgages

If you borrow money, you should expect to have to repay it. If you have borrowed too much, you cannot simply “hand back the keys” and expect to be let off any balance due. Lenders can and do insist on full payment and if the sale of the property does not achieve that, you can still be pursued personally and, potentially, bankrupted

Guarantees

If you agree to guarantee someone else’s obligations, expect your guarantee to be called on: limit it to what you can afford to lose if the primary debtor defaults

So: don’t sign legal documents unless you are prepared to be bound by them, and don’t assume other people will be “good for their word” – get them signed up to contracts, etc, before you commit yourself in reliance on them doing what they say they will