Hypothetical conveyancing situation

Moomintroll99

OK I understand the forum rule & am in no way asking for legal advice, just general opinions on this scenario.

Please imagine a hypothetical situation:

You’ve gone sale agreed on a house, as a cash buyer, for north of 400k. There’s no mortgage on the house, no banks involved on either side, no bankruptcy judgements etc, nothing that could hold up the sale, according to your solicitor. House in unoccupied/used as a holiday home, as owner now lives in another country, so there’s no tenant or inhabitant.

You’ve paid a booking deposit, then signed the contract & provided all the money to your solicitor (sale price + costs).

Great.

This money represents your life savings/proceeds of sale of previous PPR, so you’re understandably a little anxious about where it is & what it’s doing at any given time.

Trouble is, the vendor is overseas & according to their solicitor, will sign the deeds as soon as they arrive back in Ireland, on day X, in a month’s time.

You wait a stressful month but pass the time doing useful stuff like sorting insurance & researching moving options.

Day X arrives. Vendor’s solicitor says on the morning of day X that actually this person won’t arrive back in Ireland til day Y, in a few days time, but that’s a weekend, so they will sign the contract on day Z, next week. Sale will then complete the next day as everything is in place & all the legal work is done already.

In the meantime, your solicitor has assured you she knows the other solicitor and he’s very honest, the vendor too is a very sound person, it would be a hassle for them to have to seek out a notary in the country where they are, not to worry, they'll sign soon, sure you’ll be grand etc.

She also says she provided the 10% deposit to the other solicitor last week – so 2 weeks before Day Z, when vendor is due to sign/exchange.

So the question is: Is it dodgy from a legal point of view, for a solicitor to provide a 10% deposit, which you the buyer understood was non refundable, in the absence of signed contracts? Is it actually non refundable in this situation or does it become more like a booking deposit, refundable if the sale falls through?

Also, do we think it is unusual practice for a solicitor to rely on someone’s general soundness & a good relationship with the vendor’s solicitor in order to part with tens of thousands of euro of their clients’ money as a deposit for a property purchase? Or is this totally fine and normal and the hypothetical people should stop their hyopothetical stressing until their hypothetical house sale hypothetically closes?

brian_t

Moomintroll99 wrote: »

Also, do we think it is unusual practice for a solicitor to rely on someone’s general soundness & a good relationship with the vendor’s solicitor in order to part with tens of thousands of euro of their clients’ money as a deposit for a property purchase? Or is this totally fine and normal and the hypothetical people should stop their hyopothetical stressing until their hypothetical house sale hypothetically closes?

Presumeably your own solicitor could have done a runner with your money while it was sitting in their account but you still trusted them.

4ensic15

Solicitors trust each other and are supposed to be able to. I would be more worried if your solicitor did not trust the other solicitor.

Pat Mustard

Moomintroll99 wrote: »

So the question is: Is it dodgy from a legal point of view, for a solicitor to provide a 10% deposit, which you the buyer understood was non refundable, in the absence of signed contracts? Is it actually non refundable in this situation or does it become more like a booking deposit, refundable if the sale falls through?

If the contract has not been executed by both parties, the deposit is still refundable.

Before the contract is executed, the purchaser can notify the other side that they are withdrawing and there will be no contract.

Also see:
http://www.irishstatutebook.ie/eli/2009/act/27/section/51/enacted/en/html#sec51