Long completion - interest on deposit

zappahey

silvercar wrote:

In the event things went pear-shaped he has more than an obilgation to return the deposit to you - if he is at fault. If you are at fault he may be able to keep the deposit.

I did consider being more explicit about that, but took the lazy way out.

RiskAdverse100

There are in fact two ways of paying a deposit when contracts are exchanged for the sale of a property.

The normal method is for the deposit to be paid to a solicitor who holds it as stakeholder.

If completion subsequently takes place then, as from that point, the deposit belongs to the Seller and the question of whether interest should be added is between the solicitor and the Seller.

If completion does not take place and (this is very rare) the contract is rescinded or cancelled then the deposit is paid back to the Buyer along with any interest that it might have earned.

So, until completion, deposit monies held by a solicitor as stakeholder belong neither to the Buyer nor the Seller.

If you have a chain of transactions then ultimately there will be a solicitor at the top who is holding a deposit as stakeholder.

The other method involves the deposit being paid to a solicitor as agent for the Seller. This means that the deposit is the Seller's money as from exchange and, as is to be expected, the Seller will always want the money to be paid to them.

For a new build it is standard for the deposit to be paid to a solicitor as agent so that the builder can use it to pay wages, materials and for further works to be done etc.

RiskAdverse100