Deposit when buying an apartment

Paying for an apartment before full payment - on the one hand, it sounds absurd, and on the other... It is worth delving into the topic to understand how the definition of the deposit can sound and which of them is more true. Making a small down payment when buying real estate is a common practice, but to someone who is not familiar with this common operation, it may seem like a prank Shakhraev. THE Capital experts decided to dwell on this topic in more detail to dispel your doubts and explain the very essence of the deposit. Believe me, such a formal trifle will make the buying and selling process much safer and more comfortable for all its participants.

Deposit: what it is and why pay it

We will not torture the poor animal (pull the cat by the tail), but immediately proceed to the definition of the key term of this article:

❝The deposit is a certain amount of money that the buyer transfers to the seller, thereby confirming their mutual agreement and guaranteeing the further fulfillment of the terms of the sales contract.❞

(A more precise definition is given in Article 570 of the Civil Code of Ukraine.)

The size of the deposit, as a rule, is 5-10% of the total cost. real estate That is, after the final signing of the contract, you will have to pay only part of the missing amount. The advance payment is transferred after the conclusion of the main or preliminary contract of sale, which is clearly prescribed in the conditions. Such a small amount paid in advance seals the agreement between the parties, giving them great confidence in the success of the cooperation. The seller receives strong confirmation that the buyer is really interested in purchasing his purchase. ownership, and the buyer secures the object, reserves it and deprives other interested parties of the opportunity to lure the owner with a more pleasant price or other conditions. The specific legal functions of the deposit are reduced to the fact that it:

• confirms the agreement of the parties and their mutual obligations;
• guarantees compliance with the terms of the contract;
• regulates the size of the final amount and the method of its transfer.

We have already indicated the approximate size of the deposit, but, to tell the truth, the legislation does not provide for a specific framework, so there are also cases when the advance payment is half the value of the object. You can individually discuss this nuance directly with the seller to come to a reasonable consensus.

When to make a deposit and how to issue it

A deposit is necessary in those cases when the parties are still solving some issues related to the object of the contract, so they cannot complete the agreement here and now. It can be entered both at the initiative of the buyer and at the request of the seller:

• in the first case, it may be needed so that the buyer has time to collect the missing amount. Real estate is not a cheap pleasure, therefore > money for its purchase cannot be simply taken and taken out of the wallet. Of course, the final deadline for the conclusion of the agreement is discussed because no one will agree to wait months and years to their detriment;
• in the second case, it is obvious that the seller wants a guarantee. But there are also situations when he needs a postponement to resolve some nuances. Yes, at the time of viewing, the house may still be undergoing renovations that need to be completed. Or it simply takes time to move because the former owner did not expect such a quick result.

After all the formalities have been resolved, you can proceed to signing the main or preliminary contract. Only after this stage should the deposit be transferred. Otherwise, misunderstandings may arise, during which you risk losing both your money and the cherished apartment. The contract must include the following points:

• the size of the deposit;
• parties to the contract;
• the subject of the contract (apartment or house);
• rights and duties;
• fines in case of non-fulfillment of prescribed conditions;
• terms of validity of the agreement.

If all points are taken into account and you have no more disputed points, feel free to certify the document at a notary public. Also, do not forget to take a receipt from the seller stating that he received a deposit of a specific amount from you.

Is it possible to return the deposit?

If for some reason the sales contract was never signed, you should think about returning the deposit. It is precisely these "any reasons" that affect whether you will be able to get your money back. There are several scenarios of the development of events:

• the contract is terminated at the initiative of the seller - in this case, the deposit is returned not just in full, but in double amount, because it is not your fault that the owner of the apartment changed his mind. A small compensation cannot be compared with disappointment and trampled dreams about something new dwelling, but it's better than nothing;
• the contract was terminated due to the fault of the buyer - unfortunately, but you have to pay for your instability and irresponsibility. Now you already compensate the other party for spontaneous changes in plans and say goodbye to the deposited money forever.

You can try to get the deposit back in court. For this, you need to provide a previously signed contract and a receipt. In Article 571 of the Civil Code of Ukraine, you can find information about the legal consequences of violating the previous contract and about the fate of the deposit in one or another case.

🤫 We will tell you in secret that there is a reliable way to get back the advance payment. For this, you will need to pay not a deposit, but an advance. The procedure for its registration is not so different from the one we considered, so many people confuse these two terms. Their main difference is that the advance will in any case return to its owner, regardless of the reason for terminating the agreement.