Who is using my deposit money?

MikB_2 · 24 February 2005 at 5:47PM

I am selling my house and for various reasons there will be a gap of 3 months between exchanging contracts and completion.

During that period the 10% deposit will be in our solicitors client account. I am told that this will attract no interest during that time and that there is no way around this.

So who is benifiting from that interest? and who does the deposit money belong to in the meantime?

Any ideas or suggestions would be welcome

dougk_2 · 24 February 2005 at 6:09PM

If it is from the equity in your house then tell them to transfer it to you - its your money. What if you decide not to purchase another house in the end?

They should not and cannot stop you from doing this as its not their money.

They may charge an admin fee though (and obviously a CHAPS fee), but if it is a substantial amount you will get this back in interest if paid into a savings account.

You can then transfer it back when you know you have an exchange date.

dougk_2 · 25 February 2005 at 11:07AM

Just had a second thought....
Are you exchanging contracts on the house you are purchasing at the same time as completion / exchange of contract on the one you are selling?

If so this is why the solicitor is keeping the deposit because they have to.
(this is to ensure you don't spend the money as the deal is legally binding at that point)

In this case you have to consider if you want to exchange contracts so far away from a completion date.

Debt_Free_Chick · 25 February 2005 at 11:14AM

If you're exchanging contracts on the house you're buying, I think the deposit goes to the seller's solicitor. They hold this as, if you pull out after exchange, the seller is entitled to keep the deposit.

HTH

mightymo_2 · 25 February 2005 at 11:21AM

Could you not ask the solicitor to put the deposit money in a deposit account? I used to work in a solicitors dealing with conveyancing, and we used to pay out interest on any client's money held.

itgirlinuk · 25 February 2005 at 1:10PM

Do you have to check what they would do with the money when you get the solicitor?

mightymo_2 · 25 February 2005 at 2:49PM

I don't think you need to check when you first instruct the solicitor. But you do need to ask for the interest on your deposit money. I doubt the solicitor will just offer it on a plate.

gundo · 25 February 2005 at 3:40PM

mightymo wrote:

But you do need to ask for the interest on your deposit money. I doubt the solicitor will just offer it on a plate.

Sincere apologies to any solicitors on the forums but they are getting quite handsomely paid for coveyancing anyway, this just comes across to me IMHO as them just being greedy little so-and-so's.

MikB_2 · 28 February 2005 at 3:20PM

Thanks for all the useful comments.

To clarify the situation, I am selling my current home and moving abroad once the cash is in the bank. There is no outstanding mortgage.

The buyer is happy to exchange contracts asap but does not want to move in (i.e. complete) for three months.

This means that for three months the deposit money will be in the solicitors client account attracting no interest. At least that is the first reaction from the solicitor but I WILL go back and discuss this politely, armed with the useful comments above.

What would be useful to know before hand is - who owns the 10% deposit money between exchange of contracts and completion? Are there any legal experts out there?

mightymo_2 · 1 March 2005 at 11:14AM

Now I am not sure on the legal point "who owns the deposit". But once you have exchanged contracts, the contract is binding, and should the buyer pull out, he forfeits the 10% deposit.

I should speak with your solicitor again though about the deposit attracting interest. We used to put our clients' deposit monies in a deposit account which would attract interest, albeit not at a particularly high rate.

Mo

Bossyboots · 2 March 2005 at 7:52PM

http://www.lawsociety.org.uk/search/view=query.law#

Have a look at this page. You need to click the first item which explains the rules on this sort of money.

Who is using my deposit money?

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