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protecting house purchase deposit

Re: protecting house purchase deposit

Postby theycantdothat » Thu Dec 21, 2017 9:33 am

Would the attached obviate any concerns regarding the deposit being paid to the seller as agent?

Strictly what is quoted has no bearing on how or by whom the deposit is held.

There are two separate questions here. The first is what are the conditions on which the deposit is to repaid. That is dealt with by the clauses quoted and possibly some other terms of the contract, including any incorporated general conditions. The second is who should hold the hold deposit and on what basis so that if the deposit is to be repaid there is something approaching certainty that it will be repaid. The contract provides it is to be paid to the seller as agent. The words "as agent" add nothing because you cannot be an agent for yourself in the sense that agent is used here.

In a straightforward conveyancing transaction whilst it is recommended that a buyer should require the deposit to be held by the seller's conveyancer, it is not necessary to get too exercised about it. That is because the conveyancing process has means to ensure that once contracts are exchanged the seller cannot sell elsewhere. If the seller defaults the buyer can apply for specific performance requiring the seller to complete. A conditional contract is different because it may not complete through no fault of the seller. Clearly, if the conditions are not met the seller cannot require completion. Since there is a real prospect of the contract not completing, the seller needs to be satisfied that the deposit is in safe hands.
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