Regardless of how you financed your deposit, it is valuable. As a result, it’s critical to understand what function your deposit plays in the purchase of a home. I’ll go through some common legal and non-legal questions regarding the role of the deposit in a property deal in this article.
Is payment of a deposit necessary on exchange?
No, it’s a custom with no legal basis. It represents the buyer’s dedication to the purchase and is included in the contract for sale and purchase on behalf of the seller.
A 10% deposit is generally required, which is a significant sum. The deposit is collected upon the exchange of contracts as part of the payment of the purchase price. Because it constitutes a penalty on the buyer, a request for a higher than 10 per cent deposit should be examined carefully.
Can the seller run off with my deposit following the exchange?
The seller’s solicitor does not necessarily have the deposit in their client account as a “stakeholder.”
The seller’s solicitor may not pay the deposit to the seller until after you acquire your property if you hold it as a stakeholder. If the seller has a linked purchase that creates a “chain,” though, he or she may use some or all of the deposit to pay for their connected purchase, according to on the Standard Conditions of Sale (5th
If the deposit is held by the seller’s solicitor as “agent” for the seller under the terms of the contract, before completion, the seller’s solicitor might transfer it to the seller. Buyers should fight this stance since it may be tough and expensive to get back your money if the seller fails to finish the transaction.
Is it possible to protect the deposit once it is paid over?
Yes, to a certain degree. After the exchange, your solicitor may file a notice at the Land Registry to safeguard your interests under the contract. This serves as a caution to third parties that the seller is legally bound to sell the property to you.
Who is entitled to the interest that accrues on the deposit?
If the purchase and settlement are many months apart, there is a good chance that interest will build up in the seller’s solicitor’s client account. Unless stated otherwise in the contract, if the seller’s solicitor is holding the deposit as a stakeholder at completion, interest on the deposit is payable to the seller.
Can the seller take the deposit if I do not complete it?
Yes, and any interest that has accrued on the deposit since the exchange. The seller may also sue you for breaching the contract to recoup any losses they have incurred as a result of your failure to finish.
Can I claim back the deposit if the seller does not complete it?
Yes, and any interest that has accrued on the deposit since the exchange. You may also sue the seller to recoup any losses you have incurred because of the seller’s failure to complete. If you fulfil certain criteria, you can ask for a specific performance order from the Court.
If you’re looking to buy a house in Cheadle, why not contact Mistoria Estate Agents. The Mistoria Group is one of the leading property companies in the North of England, offering unrivalled service in property investment, sourcing, renovations and lettings.