Deposit in United Kingdom
Definition of Deposit
In accordance with the work A Dictionary of Law, this is a description of Deposit :
1. A sum paid by one party to a contract to the other party as a guarantee that the first party will carry out the terms of the contract. The first party will forfeit the sum in question if he does not carry out the terms, even if the sum is in excess of the other party’s loss. If the contract is completed without dispute the deposit becomes part payment. In land law a deposit is usually made by a purchaser when exchanging contracts (See exchange of contracts) for the purchase of land. The contract stipulates whether the recipient (usually the vendor’s solicitor or estate agent) holds the deposit as agent for the vendor, in which case the vendor can use the money pending *completion of the transaction, or as stakeholder, in which case the funds must remain in the stakeholder’s account until completion or (in the case of a dispute) a court has decided who should have it. If the contract is rescinded the purchaser is entitled to the return of his deposit.
2. The placing of title deeds with a mortgagee of unregistered land as security for the debt. A mortgagee not protected by deposit of title deeds (such as a second mortgagee of unregistered land) registers his mortgage (See registration of encumbrances) and is then entitled to receive the title deeds from prior mortgagees after the redemption of their security. All mortgages of registered land must be registered to be binding on purchases of the land.
Deposit Defined Case Law
- A selected English Real Property Law Case in relation with deposit defined may be: Samarenko v Dawn Hill House Limited
- Year of the above case: 2011