IPAV Deposit Protection Fund

T

T. Lydgate

Guest
Hello all,

My wife and I are about to pay a booking deposit of just under 2% of the agreed purchase price of a property to an estate agent.

Before doing so, I have been making some enquiries regarding the agent and his company. According to the records maintained by the CRO, his company is in good standing, although it seems only to have been established last year.

I have also had confirmation from the IPAV that he is a member of their Institute, but that he does not subscribe to their Deposit Protection Fund.

This makes me slightly nervous, and I am considering offering a booking deposit of only 1% so that we would have less to recover if something goes wrong. Would anyone advise against this course of action?

With thanks,

T. Lydgate
 
I've given, and my family have given, deposits to estate agents. These are booking deposits and are refundable until the contract is signed. Get a reciept from the estate agent and have it in writing on the reciept that the amount is fully refundable until the contract is signed.
 

Thanks for your reply.

I understand that booking deposits are refundable, of course. What I am concerned about are the practical difficulties we may encounter in seeking this refund in the event that something goes wrong.

I would not be so concerned if we were dealing with one of the major, national agencies, or if this independent agent were a subscriber to the Deposit Protection Fund, which would presumably indemnify us if, for example, his company were to go into liquidation while in possession of our deposit.

I realise that this is relatively unlikely, and it's possible that I'm being unduly wary.
 
The auctioneer will lodge your money to his client account. It will (should) remain untouched until the sale closes or falls through at which point it will be released to you or the vendor. If the company goes into liquidation then the deposit should be released by the liquidator. It is not an asset of the company so would not be used to pay company's debts.
Sybil
 

Thanks, Sybil. That's a good point, though it assumes, as you suggest above, that the auctioneer is compliant in holding the money in his client account in the first place.

I suppose it comes down to simply choosing whether or not to accept his bona fides, which is something we necessarily do to some extent in many transactions.
 
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