What is a lock-out agreement?

Holly
Jun 24
2 min read

When buying or selling a home in the UK, speed and certainty are often hard to come by. One way to add a bit more security to the early stages of the process is through a lock-out agreement, but what exactly is it, and is it worth doing?

A lock-out agreement (also known as an exclusivity agreement) is a legal contract between a buyer and a seller. It gives the buyer exclusive rights to purchase the property for a fixed period of time.

In short: once signed, the seller agrees not to negotiate with or sell to anyone else during the agreed window. This gives the buyer breathing space to carry out surveys, secure a mortgage, and get their solicitor in place, without worrying about being “gazumped” (when another buyer swoops in with a better offer).

How does a lock-out agreement work?

Here’s how a typical lock-out agreement process works:

Agreement Terms Are Set: Both parties agree to key terms, including:
- How long the exclusivity period lasts (commonly 2–4 weeks)
- Buyer responsibilities (e.g., instructing solicitors promptly)
- Seller obligations (e.g., not marketing the property during the lock-out period)
The Agreement is Signed: Once the terms are agreed, both parties sign the lock-out agreement. It’s legally binding, but only in terms of exclusive negotiation, not the final sale.
The Buyer Proceeds with Due Diligence: The buyer can carry out all necessary checks (like surveys or securing funds) with greater peace of mind.
Either Party Can Still Walk Away: A lock-out agreement is not a guarantee the sale will go through. It simply buys time, the buyer might still pull out, or the sale could fall through for another reason. Advantages

Protects Against Gazumping: The seller can’t accept other offers, giving the buyer confidence to move forward.
Adds Clarity and Commitment: It shows both sides are serious and committed to moving forward.
Buys Time to Carry Out Legal Checks: Buyers get a clear window to do their homework without competition.
Useful for Complex or High-Value Deals: Especially helpful when transactions involve multiple stakeholders or unique conditions.

Disadvantages

Not a Guarantee of Sale: Either party can still walk away before exchange. It offers security, not certainty.
Cost of Drawing It Up: Legal fees may apply, especially if the agreement is bespoke.
Can Delay the Process: Agreeing on lock-out terms might slow down momentum if not handled quickly.
Limited Legal Recourse: If the seller breaches the agreement, compensation is usually limited to wasted costs, not loss of the property.

Is a lock-out agreement right for you?

Lock-out agreements are most useful when:

You're buying a high-demand property where competition is fierce
You need time to finalise finance or legal checks
The seller wants to show commitment without going straight to exchange
There will be a few stakeholders owning the property

However, they are not always necessary, many property transactions proceed smoothly without them. It comes down to your situation, risk tolerance, and how much assurance you want upfront.

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Please note that this is not legal advice, should you wish to proceed with a lock-out agreement you should consult a registered solicitor.

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