CrimsonTide

Hi, can someone tell mw who holds the deposit, when buying a property?

Regards

chrisjolly

The seller usually which they can keep if the deal falls through. It should be 10% of the price agreed.

Johncarzx

That is a good question and sometimes a grey area.The answer in short is anyone who can get their hands on it. The estate agent, the seller, a developer, a builder, a lawyer or a bank. In Spain the culture is that whoever has the money in their pocket owns it and it could take you many years, if ever to get it back through the Spanish justice system.It should be held in a safe bank guaranteed account and only released when the property purchase legally completes. But even then history has shown bank guarantees can be as secure as trusting it to a lucky lucky man at the beach.


Spain Bank Manager

Loafing Along

Use a good lawyer and they will put it in an escrow account, protects you but also gives security to seller the money is actually there. That's what we did.

CrimsonTide

Hi thank you for the response.s The latter re 'Escrow account' seems more in line with my thinking.

lurchio

You will get a 'Reserva' Certificate as a form of receipt and acknowledgement and the money should be held by the buyers Solicitor in an escrow or Client account. You will be aware that if you then pull out you lose it, plus you are liable for the other sides costs!

Johncarzx

Spot on Loaf , but most expat new arrivals wouldn’t know a good lawyer from Robert Maxwell. They are lambs to the slaughter.

CrimsonTide

Thank you 'lurchio'. Nice and precise.

snikpoh

Why 10%?

Note also that there is no set amount for the deposit - as far as I'm aware, it does NOT have to be 10%

chrisjolly

mikelincs

When we bought, admittedfly 14 years ago, we paid €6000 which was held by our solicitor, but we were told the deposit was non-refundable if we pulled out, similarly the seller would have to give us the same amount as compensation if they pulled out.

Johncarzx

I do not think it is as clear cut as that.The deposit is subject to contract and therefore providing the deposit contract is drawn up correctly your deposit is refundable. For example the property turns out to be an illegal build, there are debts on the property that will not be discharged, there are no deeds, no proof of ownership etc etc.

Re: similarly the seller, yes the contract will probably say that, but in reality no Bob Hope you will have to whistle in the wind for that.

snikpoh

Do not be confused between a deposit and a holding fee.

IMHO, NEVER pay a holding deposit to the agent. All payments should be via your legal representative.