by John Cockburn, Partner
Question
We sold our home and agreed to a $10,000.00 deposit held by our Realtor. The conditions were waived a month ago, firming up the sale so we went ahead and purchased another home on a firm and binding agreement.
Our lawyer just received a letter from our purchaser’s lawyer telling us that the purchasers have changed their mind and bought another house and were asking for the return of their deposit!
We naturally assumed that we would get the deposit in the event of a default and have other rights against the purchasers…….but our lawyer has been unable…….so far to get a cent for us and her bills are mounting…..what is up?
Answer
Unfortunately a real estate deposit in a trust account of a realtor is of little practical value to a vendor. It is not the realtors fault but the Act governing relators prevents them from releasing the deposit unless either the defaulting purchaser consents in writing or a court order has been obtained ordering the release.
A defaulting purchaser will seldom “consent” and obtaining a court order will take many months and will cost you thousands of dollars!!!
Solution
Be certain as a vendor that the deposit is made payable to your solicitor in trust as solicitors are not bound by the realtors legislation!