Beware of Accepting Less Than 10% Deposit on Sale
There has been an increasing trend over the last several years for property vendors to accept a less than 10% deposit when the property is sold. This is good for the purchaser, but a recent court case makes it clear it can be very bad for the vendor.
In the case, the contract stated that only a 1% deposit would be paid, but the purchaser agreed in the contract to pay the whole 10% in the event of a default. The court took the view that 10% was not a genuine deposit but rather, 1% was the deposit and 9% was a penalty not recoverable by the vendor.
So if selling your property, insist on a full 10% deposit even if it is paid by installments or by bank guarantee.
Readers should not act or rely on this information without first seeking out professional advice concerning their particular circumstances