Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Hi all,
Vanilla are planning an update to the site on April 24th (next Wednesday). It is a major PHP8 update which is expected to boost performance across the site. The site will be down from 7pm and it is expected to take about an hour to complete. We appreciate your patience during the update.
Thanks all.

House Purchase Deposits

  • 29-01-2009 12:23am
    #1
    dtwhaler
    Registered Users Posts: 39 ✭


    When you give a deposit for buying a house, does it stay with the vendor's solicitor ? Is there any way that they can give this deposit to the vendor before the deal is closed ? If they do, who is responsible for paying back the deposit should the deal fall through ?


Comments

  • #2
    dazza21ie
    Registered Users Posts: 992 ✭✭✭dazza21ie


    The deposit usually is held as stakeholder by the vendor's solicitor but sometimes a Contract can provide that the deposit can be released directly to the vendor.


  • #3
    dats_right
    Registered Users Posts: 1,168 ✭✭✭dats_right


    1. When you give a deposit for buying a house, does it stay with the vendor's solicitor ?

    Ans. Yes, generally speaking it is retained by vendor's solicitor as stakeholder, although two points are worth noting; firstly, any booking deposit paid to the estate agent is not held by the vendor's solicitor, as a stakeholder, but is retained directly by the agent. Secondly, in the case of new developments in the course of construction under the contract the deposit is paid directly over to the vendor/developer and not retained by the vendo'rs solicitor. Homebond or Premier Guarantee have schemes in place to protect deposits where builders who are members default on the agreement i.e. typically by 'going bust' without having completed the sale.

    2. Is there any way that they can give this deposit to the vendor before the deal is closed ?

    Ans. No is the general answer but subject to some important qualifications, such as in the case of new developments where the deposit is released directly to vendor, see answer above. And General Condition 41 of the Standard Law Society Contract for Sale provides that: " if the purchaser shall fail in any material repsect to comply with any of the conditions, the vendor (without prejudice to any rights or remedies available to him at law or equity) shall be entitled to forfeit the deposit and to such purpose unilaterally to direct his solicitor to release same to him". Which essentially means that if the purchaser cannot fulfill his side of the cotract the vendor can direct that his solicitor release the deposit directly to him.

    Although this is only a very general answer and this area is quite technical area so proper legal advice should be sought from your solicitor.

    3. If they do, who is responsible for paying back the deposit should the deal fall through?

    Ans. It depends on the circumstances. Once a binding contract is in existence, if the sale fell through at the fault of the purchasers then, subject to the vendor complying with the necessary procedures and formailities, the deposit is forfeitted and retained by the vendor and no return is applicable. If it is by default on part of the vendor then the purchaser is entitled to the return of his deposit generally without interest (the solicitor would return any deposit held by him and the purchaser should contact the estate agent to have any booking deposit held directly by the estate agent returned).

    If a new development and the deposit has been released to the vendor then it will be necessary to make a claim through Homebond/ Premier Guarantee schmes directly as the vendor's solicitor will not be responsible.

    I would emphasise that this whole area is highly complicated and legalistic, it is impossible to offer anything but the most general outline of the applicable law on a forum such as this, so if someone is experiencing or encountering a difficulty they should contact a solicitor immediately.


  • #4
    dtwhaler
    Registered Users Posts: 39 ✭dtwhaler


    Thanks for your replies.
    So ... a further question. If the property is a one off build .... then Homebond does not cover it. From the answers given, would I be right to say that if this was the case then there shouldnt be any way the solicitor should have given the deposit to the vendor until the deal is closed ?
    If they did and the deal fell through due to a breach of contract on the vendors side, could the solicitor be liable for the deposit if the vendor doesnt have it ?


  • #5
    dats_right
    Registered Users Posts: 1,168 ✭✭✭dats_right


    dtwhaler wrote: »

    Thanks for your replies.
    So ... a further question. If the property is a one off build .... then Homebond does not cover it. From the answers given, would I be right to say that if this was the case then there shouldnt be any way the solicitor should have given the deposit to the vendor until the deal is closed ?

    Whilst it is less common for 'one off' builds to be registered with Homebond/premier it is certainly not unheard of. So this is something that must be established for certain. If not registered, it doesn't mean that the vendor's solicitor cannot release the deposit directly to the vendor, in fact the same provisions apply i.e. deposit will be released unless otherwise agreed, but owing to this risk that a purchaser faces, a purchaser's solicitor will often try negotiate some protection for his client e.g 1. Seek to have vendor's solicitor hold deposit as stakeholder (but this will virtually never be agreed to by vendor), or 2. Arrange to transfer the title of the site immediately to purchaser on signing of contract, meaning that site will be immediately owned by purchaser and whilst not perfect does offers some level of security for purchaser in the event that the builder goes bust (again there is no guarantee that this will be agreed to by vendor).

    Unfortunately, if not registered with homebond/premier and neither of these protections were negotiated then one could be facing very serious problems with no easy solutions.
    dtwhaler wrote: »
    If they did and the deal fell through due to a breach of contract on the vendors side, could the solicitor be liable for the deposit if the vendor doesnt have it ?

    It is very difficult to give black and white answers, but Very unlikely is the short answer, as you would in all likelihood have to pursue the vendor directly. But, these issues are very serious and complicated. Therefore immediate advice must be sought from a solicitor who may well see fit to get Counsel's Opinion (i.e. barrister) on the situation and your possible remedies.


  • #6
    Nefer
    Registered Users Posts: 5 ✭Nefer


    dats_right wrote: »
    1. When you give a deposit for buying a house, does it stay with the vendor's solicitor ?

    Ans. Yes, generally speaking it is retained by vendor's solicitor as stakeholder, although two points are worth noting; firstly, any booking deposit paid to the estate agent is not held by the vendor's solicitor, as a stakeholder, but is retained directly by the agent. Secondly, in the case of new developments in the course of construction under the contract the deposit is paid directly over to the vendor/developer and not retained by the vendo'rs solicitor. Homebond or Premier Guarantee have schemes in place to protect deposits where builders who are members default on the agreement i.e. typically by 'going bust' without having completed the sale.

    2. Is there any way that they can give this deposit to the vendor before the deal is closed ?

    Ans. No is the general answer but subject to some important qualifications, such as in the case of new developments where the deposit is released directly to vendor, see answer above. And General Condition 41 of the Standard Law Society Contract for Sale provides that: " if the purchaser shall fail in any material repsect to comply with any of the conditions, the vendor (without prejudice to any rights or remedies available to him at law or equity) shall be entitled to forfeit the deposit and to such purpose unilaterally to direct his solicitor to release same to him". Which essentially means that if the purchaser cannot fulfill his side of the cotract the vendor can direct that his solicitor release the deposit directly to him.

    Although this is only a very general answer and this area is quite technical area so proper legal advice should be sought from your solicitor.

    3. If they do, who is responsible for paying back the deposit should the deal fall through?

    Ans. It depends on the circumstances. Once a binding contract is in existence, if the sale fell through at the fault of the purchasers then, subject to the vendor complying with the necessary procedures and formailities, the deposit is forfeitted and retained by the vendor and no return is applicable. If it is by default on part of the vendor then the purchaser is entitled to the return of his deposit generally without interest (the solicitor would return any deposit held by him and the purchaser should contact the estate agent to have any booking deposit held directly by the estate agent returned).

    If a new development and the deposit has been released to the vendor then it will be necessary to make a claim through Homebond/ Premier Guarantee schmes directly as the vendor's solicitor will not be responsible.

    I would emphasise that this whole area is highly complicated and legalistic, it is impossible to offer anything but the most general outline of the applicable law on a forum such as this, so if someone is experiencing or encountering a difficulty they should contact a solicitor immediately.
    I'm just wondering if the deposit that's been put on our house can be transferred from our solicitors acc to the vendors solicitors acc as deposit on the house we are buying


  • Advertisement
  • #7
    Valentine1
    Registered Users Posts: 434 ✭✭Valentine1


    Nefer wrote: »
    I'm just wondering if the deposit that's been put on our house can be transferred from our solicitors acc to the vendors solicitors acc as deposit on the house we are buying

    Generally speaking the vendor's solicitor receives the deposit as stakeholder which means he holds it on trust for the purchaser. This means that the vendor is not entitled to use it or benefit from it in anyway. So in most circumstances using it as deposit for another property would not be allowed.


  • #8
    Nefer
    Registered Users Posts: 5 ✭Nefer


    Valentine1 wrote: »
    Generally speaking the vendor's solicitor receives the deposit as stakeholder which means he holds it on trust for the purchaser. This means that the vendor is not entitled to use it or benefit from it in anyway. So in most circumstances using it as deposit for another property would not be allowed.

    Thank you, yeh I suppose that sounds about right. Don't think I will ever move again it's so stressful, hopefully it will be worth it when we finally get there.


  • #9
    Santa Cruz
    Banned (with Prison Access) Posts: 3,126 ✭✭✭Santa Cruz


    The Estate Agent retains it. When the deal is closed he will forward the deposit to the Vendors solicitor minus the Estate Agent fee.


Advertisement