Deposit used by Vendor for his deposit

archess200

I am in the process of buying a house, and the contract states, in accordance with the Standard Conditions for Sale, that the Vendor has the right to use my deposit as his deposit, and onwards down the line.
That means that there is only one deposit being used to buy all the houses.
What happens if somebody in the middle pulls out, loses his deposit: ie, MY deposit. If the chain then fails, how do all the deposits after this break, get paid back?

In my case, my Vendor is buying privately, from somebody who is selling to buy a houseboat in France. If my Vendor uses my deposit and the bloke buying the boat runs away to France without completing, how do I get my deposit back?
Seems as fraught as self-certified mortgages. It is all very well for the estate agents to say that in all their years of experience this has never happened, but I don't believe a thing they say anyway, and I don't want to be the first.
My solicitor has already pointed out that this practice is fraught: why has it been included in a legal document?

Paul_the_Painter

The one thing is that it is not your problem! Your solicitor holds your money before the date of completion, the hour comes, he then sends cash to your vendors solicitor, and your bank does the same, all confirmed, the house is yours.

Now if it all goes horribly wrong after that - why do you care?

If the chap you are buying off fails to complete on his purchase, it doesn't affect you, he still has to leave as he has sold you his house! It's not his anymore.

MegaMiniMouse

Paul_the_Painter wrote: »

The one thing is that it is not your problem! Your solicitor holds your money before the date of completion, the hour comes, he then sends cash to your vendors solicitor, and your bank does the same, all confirmed, the house is yours.

Now if it all goes horribly wrong after that - why do you care?

If the chap you are buying off fails to complete on his purchase, it doesn't affect you, he still has to leave as he has sold you his house! It's not his anymore.

I know little about this stuff, and I would be interested to know the answer to the question contained in the OP's opening sentence.

Unfortunately, Paul's answer does not suffice

MMM

DVardysShadow

archess200 wrote: »

I am in the process of buying a house, and the contract states, in accordance with the Standard Conditions for Sale, that the Vendor has the right to use my deposit as his deposit, and onwards down the line.
That means that there is only one deposit being used to buy all the houses.
What happens if somebody in the middle pulls out, loses his deposit: ie, MY deposit. If the chain then fails, how do all the deposits after this break, get paid back?

There is one initial deposit, and it is added to or taken from up the chain.

Now think about what you mean by someone pulling out. This can only put your deposit at risk if it happens after exchange of contract. He loses his deposit if he pulls out of a purchase, but he is contracted to sell to you, so he becomes homeless unless he makes other plans.

Of course he could fail to sell to you, but you have legal remedies. There was a long thread last year iirc where this happened to someone. I think it cost the vendor quite a bit.

jonewer

archess200 wrote: »

If my Vendor uses my deposit and the bloke buying the boat runs away to France without completing, how do I get my deposit back?

What do you care about a house boat in france? If your vendors vendor runs away, thats your vendors problem, not yours.

MegaMiniMouse

DVardysShadow wrote: »

There is one initial deposit, and it is added to or taken from up the chain.

Now think about what you mean by someone pulling out. This can only put your deposit at risk if it happens after exchange of contract. He loses his deposit if he pulls out of a purchase, but he is contracted to sell to you, so he becomes homeless unless he makes other plans.

Of course he could fail to sell to you, but you have legal remedies. There was a long thread last year iirc where this happened to someone. I think it cost the vendor quite a bit.

That doesn't explain the bit about 'Standard Conditions of Sale'.

Either the purchaser's solicitor holds the deposit until whenever, or else it becomes available to 'others' to pass down the line..

I don't unnerstand

MMM

RobertoMoir

MegaMiniMouse wrote: »

I know little about this stuff, and I would be interested to know the answer to the question contained in the OP's opening sentence.

Unfortunately, Paul's answer does not suffice

MMM

Well strictly speaking there isn't a question anywhere in the OP's opening sentence but what part of Paul's answer doesn't do it for you?

The world can be divided into things which are your problem and things which are not your problem. Once you've purchased a house (your problem) off someone then should their purchase fall through (not your problem), that is unfortunate but really nothing you need to worry about.

MegaMiniMouse

RobertoMoir wrote: »

Well strictly speaking there isn't a question anywhere in the OP's opening sentence but what part of Paul's answer doesn't do it for you?

The world can be divided into things which are your problem and things which are not your problem. Once you've purchased a house (your problem) off someone then should their purchase fall through (not your problem), that is unfortunate but really nothing you need to worry about.

I don't unnerstand!

Who holds the deposit of a potential buyer, and what is he/she allowed to do with it?

MMM

SusieT

I think if I read this correctly you are worried about losing the money that you have given your solicitor as a deposit.
Your solicitor will hold the money in his client account, then when you exchange the solicitors of the person you are buying from will be told that your solicitor is holding £xx,ooo of your money.
They will know that if you then pull out that amount will be forwarded to them, and if all goes normally that on completion the deposit plus the remainder of the funds will be transferred to them.
The person you are buying from will be deemed to have the funds as part or all of their deposit, and this will continue up the chain.
The actual deposit will not be passed to your vendor until completion, so they cannot run off with it.

MegaMiniMouse

SusieT wrote: »

I think if I read this correctly you are worried about losing the money that you have given your solicitor as a deposit.
Your solicitor will hold the money in his client account, then when you exchange the solicitors of the person you are buying from will be told that your solicitor is holding £xx,ooo of your money.
They will know that if you then pull out that amount will be forwarded to them, and if all goes normally that on completion the deposit plus the remainder of the funds will be transferred to them.
The person you are buying from will be deemed to have the funds as part or all of their deposit, and this will continue up the chain.
The actual deposit will not be passed to your vendor, so they cannot run off with it.

I unnerstand! Thanks x