No deposit on exchange

VintageHistorian

AdrianC said:

Esme84uk said:

We have asked for 4 weeks from exchange to completion, as we will need to secure a rental and understandably we are not prepared to sign for a tenancy until we have exchanged.
We have gone back to our solicitors and said we are not prepared to exchange with out some form of deposit, we are happy for it to be less than 10%, but want it to cover the 6 months rent we will be liable for.

Umm, that sounds like you're planning on using the exchange money to pay for your rental deposit and up-front rent...

You do know that you wouldn't normally get the exchange deposit released to you until completion, right? After all, if YOU pull out, or the sale is frustrated by some external reason, that money goes straight back to the buyers.

I think you're misreading that Adrian. OP doesn't want to be on the hook for both continuing their mortage AND the rent that they will be liable for once they sign a tenancy agreement, if the buyers pull out between exchange and completion.

If they get the cost of 6 months rent as a deposit on exchange, and then the buyers pull out before completing, then at least the OP will have the rent costs covered. It doesn't say anything about them expecting to use that money for their own rental deposit, and the costs of 6 months rental will probably be lower than the 10% deposit most people would have to hand over at exchange.

Esme84uk

AdrianC said:

Esme84uk said:

Umm, that sounds like you're planning on using the exchange money to pay for your rental deposit and up-front rent...

You do know that you wouldn't normally get the exchange deposit released to you until completion, right? After all, if YOU pull out, or the sale is frustrated by some external reason, that money goes straight back to the buyers.

Not at all, we just don't want to sign for a lease and then they don't complete meaning we would then be liable for our mortgage and a minimum of 6 months rent

mrschaucer

Esme84uk said:

I'm quite annoyed that we weren't made aware of this in September when we accepted the offer, as had we known we would either not accepted or would have had a contract drawn up specifying that they would pay a set amount as a deposit.

The normal contract (Standard Conditions of Sale) used by solicitors DOES specify a 10% deposit on exchange, so the buyers' solicitor will have to get your solicitor (and you) to agree to it being amended.  That is entirely your choice and you need to take account of your solicitor's advice.

Esme84uk

GDB2222 said:

If I understand the springboard mortgage, it depends on bank of mum and dad. They deposit money with the lenders, and the lenders have a charge on it for the mortgage. If so, I'd have thought a personal guarantee from mum and dad for the contractual deposit ought to suffice. The kids won't default and land mum and dad in it.

I read all the terms and conditions and there is nothing about exchange, only if they default on payments.

mrschaucer

Esme84uk said:

I read all the terms and conditions and there is nothing about exchange, only if they default on payments.

Google Standard Conditions of Sale and see Section 2.2.1.  10% deposit on exchange.
Edit:  Ah sorry, you were quoting something else!