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A property deposit in the context of residential real estate refers to a lump sum of money paid by a buyer to the seller or their estate agent as part of the property purchase process. This deposit is a financial commitment from the buyer and is typically expressed as a percentage of the property's total purchase price. The purpose of the deposit is to demonstrate the buyer's serious intent to purchase the property and to secure the deal.
But what happens to a property deposit when the sale of the house falls through? In this episode of the Property Corner, Rowan will be breaking down three scenarios that have lead to a contract being cancelled or not proceeding to understand who is responsible and how that would impact your deposit.
0:00 Introduction
0:34 The simple answer
0:51 Agreements of sale & suspensive conditions
02:04 Most common example of a suspensive condition: mortgage bond application
02:55 Being in breach of the agreement of sale
03:45 Scenario 1: Not remedying the breach within the prescribed time
04:40 What constitutes a breach in South African property contract law
05:57 Scenario 2: Not wanting to proceed with the transaction or failing to meet your obligations
07:55 Scenario 3: What happens when the seller is in breach
08:53 Am I still liable if I don’t pay a deposit?
09:32 The importance of a deposit
10:47 Outro
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