Deposit when signing a sale contract .
Dreams Come True! Finally you have found what you have been dreaming of for a long time and you are in a hurry to sign the contract !
Do not forget your checkbook, since the notary will definitely ask you for a DEPOSIT.
Is it necessary to write a check-deposit?
The answer is: “No, it’s absolutely not !”. In the French legislation there is no legislative act obliging to pay the deposit. Nevertheless, in practice – in 99% of cases, the notary will ask you for a check because it serves first of all as a guarantee of your serious intentions.
What is the amount of the deposit?
As a rule, the amount of the deposit is 7-10% of the purchase amount. You should know that you can determine this amount with the seller MANDATELY BEFORE signing a preliminary contract of sale!
Whose name is subscribed to the deposition?
A check can be issued in the name of a notary’s office (if the transaction is concluded in that case) or in the name of a real estate agency (if it has all the necessary financial guarantees!). In both cases, the deposit is put into a special account before signing the final sale agreement.
It is very important: the deposit is never issued in the name of the owner of the property !!!
You have decided to stop the deal. How to get your deposit back?
There are 3 possible issues:
- You changed your mind within 7 days from the date of signing the preliminary contract of sale and you did not forget to send a corresponding letter with receipt acknowledge to the seller. Perfect! In this case, your money will be returned to you within 21 days.
- The bank refused to grant you a loan, despite the fact that you made all the requests on time.
Obtaining a bank loan is an obligatory condition in the contract of sale (of course, if you have mentioned that you are financing your purchase by it!) and therefore, if the bank refuses, the transaction is canceled without financial sanctions.
- You changed your plans after 7 days , despite the fact that the bank gave you the loan consent. In this case, your deposit will not be returned to you: the deposit amount will be transferred to the seller as moral damages (moreover, the seller can demand to pay the whole 10% of the transaction amount, even if, for example, your deposit was only 7%!). The only chance is to convince the seller because in this case everything depends on his will.
Do you want to buy or rent a property on the French Riviera?
Hanna Logis – expert in real estate – at your service!