Exchange of contract:can a buyer legallyclaim the deposit money before completion?

Nourse79

Hi Everyone,
As sellers we are waiting for the exchange of contracts and the 10% deposit from the buyers anytime next week. (via solicitors obviously).
When and can we legally claim some (if not all) of the deposit, before completion, as it will be ours in any case ?
(Some to be used in ISAS before the end of this tax year - not to buy another property - some for overseas bills).
Thanks 4 yr reply and advice.

DVardysShadow

Depends whether your solicitor holds the deposit as 'Agent' or 'Stakeholder'. Normally buyer will insist solicitor holds as stakeholder, which means you do not get the money until completion. If solicitor holds money as Agent, you should be able to get your hands on it quickly.

paddy's_mum

And what happens, when you've already spent some part of the deposit monies, if you then cannot complete. It's rare, but it does happen and it would not, in my view, be very mse to let you go into a potential financial minefield without warning you of the pitfall.

If this all went pear-shaped, perhaps because you are killed in a car crash, or your other half is sectioned and cannot then sign the legal papers necessary to complete, the penalties for failing are far, far greater than any tax saved by being in time for this year's ISA.

Sorry to rain on your parade but it might be the best note of caution you'll ever receive. Spend the money when it's yours with no worry - you'll enjoy it more, I promise.

Nourse79

Firstly,let me apologise for the error in the title thread: " can a buyer legally claim the deposit money before completion? I meant :can a seller...."
Secondly, I thank paddy's mum for his words of caution and advice but being of a very optimistic nature, I think I'll chance it and save - not spend- some of the deposit money.Hopefully nothing will happen to us during the 10 days between exchange and completion.

beccad

Presumably if you can repay it if the sale doesn't actually complete then no problem surely? If you spent it I guess it's a whole world of problems

Annisele

The problem is that some of the things that would mess with completion - death, mental incapacity - are also the sort of things that would make it difficult to withdraw money from a savings account.

I think it's much safer to just leave it with the solicitors, but you might take the view that if your other half is dead/sectioned/otherwise unable to sign papers, then the buyer's deposit money would be the least of your problems.

Ulfar

No you can't have the deposit money until completion date, its not your money till then whether they complete or not.

I would be very surprised if your solicitor will go along with what you want.

timmyt

Nourse79 wrote: »

Hi Everyone,
As sellers we are waiting for the exchange of contracts and the 10% deposit from the buyers anytime next week. (via solicitors obviously).
When and can we legally claim some (if not all) of the deposit, before completion, as it will be ours in any case ?
(Some to be used in ISAS before the end of this tax year - not to buy another property - some for overseas bills).
Thanks 4 yr reply and advice.

sorry, it must be held by your lawyer as 'stakeholder' meaning it cannot be used by you until completion (exceptif you are using it to buy your own property and it is held by that selling lawyer as stakholder.

ignore it, it isn't yours.

however, if the buyer does not complete on the completion date, then again, you cannot take the money. you have to serve a notice to complete which gives them another 10 dys to complete. if they fail after that, thenm yu can forfeit it....and the courts very rarely will stop you keeping it.

Richard_Webster

timmyt wrote: »

sorry, it must be held by your lawyer as 'stakeholder' meaning it cannot be used by you until completion (exceptif you are using it to buy your own property and it is held by that selling lawyer as stakholder.

ignore it, it isn't yours.

however, if the buyer does not complete on the completion date, then again, you cannot take the money. you have to serve a notice to complete which gives them another 10 dys to complete. if they fail after that, thenm yu can forfeit it....and the courts very rarely will stop you keeping it.

I agree. If I was acting for the buyer and the seller insisted his solicitor held the deposit as "agent for the seller" then I would tell my clients not to exchange contracts until the seller backed down. it would be totally unreasonable for the seller to want this.