It is customary for the buyer to pay 10% of the purchase price as deposit. Although this is not required by law, it is common for buyers to pay deposit to assure the seller that he is committed to purchase the property. It also acts as a security to the seller, who has the right to forfeit that money when the buyer defaults in subsequent payment. SC 2.2 and SCPC 2.2 make provisions for 10% of the money to be held as deposit by the seller’s conveyancing solicitor as a stakeholder. A change in capacity should be indicated by a special condition in the contract. The buyer also should inspect the contract very carefully if the change in capacity is from that of stakeholder to agent for the seller. Standard forms purchased from law stationers for SC as well as SCPC leave a space at the bottom of the front page of the contract form, for the deposit amount to be entered.
When the deposit amount is less than that provided under SC and SCPC (10%) the lesser amount shall prevail. Lesser amounts are quoted as deposit money in circumstances when the money is held as an agent rather than as a stakeholder.
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