Can I insist upon a 10 per cent deposit?

Our lawyer, Fiona McNulty, advises on deposit levels at exchange of contracts
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Deposit in a chain cartoon
© Merrily Harpur
Question: I was about to exchange contracts on the sale of an investment property when I was told by my solicitor that the buyer wanted to pay a deposit that worked out at less than five per cent of the price. My solicitor says this is because the deposit "coming up the chain" is also very small. Can I insist upon a full10 per cent deposit despite how close we are to exchanging?

Answer: Where there is a chain it is common practice for the deposit to be passed up the line. However, the person at the bottom of the chain is often a first-time buyer who has nothing to sell and is buying the least expensive property in the chain and so their deposit tends to be small.

If you accept a deposit of less than 10 per cent you still have the right to sue your buyer for the full 10 per cent deposit, plus any other losses to which you are entitled under the terms of the contract, if the buyer does not proceed with the purchase after exchange of contracts.

Your buyer's solicitor should have contacted your solicitor earlier in the transaction to establish if you were happy to accept a smaller deposit.

Sometimes a seller will agree to accept a smaller deposit - perhaps five per cent of the purchase price - but there is no reason why you cannot ask your buyer to find the balance and pay you a full 10 per cent deposit.

Your buyer may not have any money and so if your solicitor is holding a 10 per cent deposit at least you will know that your buyer is good for that amount.

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If you have a question for Fiona McNulty, email We regret that questions cannot be answered individually.

Fiona is a partner in the property team at Thring Townsend Lee & Pembertons Solicitors

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