DIY Conveyancing - transfer of funds

Raconteur

I am doing the conveyancing myself on the sale of my (mortgage free) house. Unlike many threads I have read on DIY conveyancing, the buyer's solicitor has been generally helpful in dealing with me unrepresented. Contract has now been agreed and we are approaching exchange. I propose to do the exchange and completion the old fashioned way, attending the buyer's solictors face-to-face to counter-sign duplicate copies of the contract (previously signed by the buyer) on exchange and to similarly bring along signed copies of the LR transfer of title form on completion.


However the question has arisen as to the payment of the deposit. Usually this is paid to the seller's conveyancer, but in this case I believe should be paid to me directly? I assume buyer's solicitor has to manage the risk that I fail to complete and return the deposit and has therefore proposed that they retain the deposit to order, pending completion. Although I understand their position, I am not happy with this as it represents a clear conflict of interest. As such, I thought I would ask the question of how other DIY conveyancing practitioners out there have handled it? Any advice and experience is appreciated.

G_M

Last time I did this we Exchanged/Completed simultaneously.

Did it at my bank (buyer attended in person, with their solicitor on the phone), and as soon as the bank confirmed rceipt of funds we swopped signed paperwork.

Must admit I was surprised - effectively the full sale price was in my account before the contracts were exchanged. I could have......

Going back further in time, I've been paid the deposit directly and held it pending completion.

These days I would expect a more cautious/professional (buyer's) solicitor to want to hold the deposit to your order pending Completion.

da_rule

There are a number of reasons deposits are held to order.

Generally it is cheaper, as solicitors (and their clients) usually get charged for every bank transfer they make, therefore if they can get away with only making one, on completion, it works out cheaper.

A key word that is often missed out when holding to order is that it is actually held to YOUR order. This means that if you order to be released it will be. It also means that it will be released if there is a breach of contract or on fulfilment of the contract (i.e. completion). Essentially the beneficial interest in the money passes to you on exchange but the solicitor for the other side is holding it for you. They also won’t exchange unless they are actually holding the deposit.

To be honest I can’t remember now the last time I dealt with a residential property sale/purchase where the deposit wasn’t held to order. There is some debate as to whether this should become the norm and whether the standard conditions of sale should be changed to reflect this change in practice.

Ultimately however, the deposit is owed to you. It is therefore your choice whether you are happy with it being held to order. If you aren’t then they will have to give it to you on exchange. As you are going personally you may want to suggest you’ll accept a cheque, as this may be cheaper to administer than a BACS payment.

steampowered

I would be happy with this.

Solicitors holding money to "order" is a commonly recognised arrangement.

Solicitors' undertakings are legally binding, and are regulated: see https://www.sra.org.uk/solicitors/handbook/code/part5/content.page. You could ask the solicitor to send you an email formally confirming the circumstances in which you will be entitled to require them to ntransfer the deposit to you.

I can see why the buyer is not happy for you to hold the deposit pending completion.

TBagpuss

As steampowered says, this would be fairly usual particualrly as you are acting in person so the buyer doesn't have the security they would if the deposit were held by your solicitor.

Provided thattheir solicitor gives you the appropriate undertaking to hold the money to your order (which means thay can't release it back to their client without your permission) there isn't a conflict of interest, and you are protected as solicitors undertakigns are legally binding an enforceable.

Raconteur

Thanks very much for all your replies and advice. I will therefore confirm with the buyers solicitor that they are fine to proceed as suggested. Much appreciated.