Deposit agreement for the purchase of any real estate, land or car

Document year: 2019

Document group: Automobile agreements, Sales and purchase agreements, Real estate agreements, Other agreements

Type of document: Agreement

Download formats: DOC, PDF

A deposit agreement for the purchase of real estate is a document that confirms the transfer of money before the transaction is concluded, and also determines the responsibility of both parties.

We invite you to consider in detail the correctness of the deposit.

How is the deposit transferred?

First, agree with the other party in what form you are willing to accept the money: in cash or by transfer (indicate “Deposit for” in the purpose). In any case, the fact of transfer is documented in writing; a receipt will be required for this. Some points when transferring the deposit:

• the party accepting the deposit writes the receipt manually with a simple ballpoint pen;
• funds are given only after signing the paper;
• It would not be a bad idea to involve independent witnesses (they will be present when drawing up the receipt and transferring the money; relatives will not come up).

For your information! Money can be left in a safe deposit box.

What is indicated in the receipt:

• information about both parties;
• the total expression of the deposit (how much money is transferred in numerical value and in words);
• indicates the number of the contract under which the property will be purchased;
• A brief description of the acquired property is given.

The receipt is sealed with a signature.

Procedure for transferring funds

You should sign the agreement only after viewing all title and other documents, as well as after inspecting the land itself.

Once the agreement is signed, the buyer transfers the agreed amount of money. You can do this:

• By transfer to the seller's bank account. This method is more reliable, because if the seller later refuses the transaction, you can easily prove that you gave him the money (by taking the necessary certificates from the bank).
• Hands over cash.

Deposit and advance: what are the differences?

If the transfer of money is not documented, it will no longer be a deposit, but a regular advance. Such a payment is not regulated in any way by law. If the deal falls through (no matter whose fault), the advance is simply returned to the owner. The table clearly shows the main differences between a deposit and an advance payment.

Important! In order for the payment to move from an advance payment to the category of an earnest money deposit, the parties enter into written agreements (deposit and preliminary purchase and sale agreement). Moreover, one agreement without the other is impossible - the Laws in such cases do not apply to them, and the transferred funds will be counted as a simple advance.

Structure and features of the agreement

A well-drafted advance agreement allows you to minimize risks for the parties. An agreement with an advance payment must be drawn up in writing. It should contain the following items:

1. Information about the subject of purchase - a land plot: its cadastral number, address, area, category and type of permitted use, indication of the presence of encumbrances, etc. This item should be written down in as much detail as possible; it must clearly identify the land plot.
2. Rights/responsibilities of the seller and buyer. It is the seller's responsibility not to sell the plot to a third party after receiving an advance payment. It is the buyer's responsibility to pay the balance of the price after signing the main contract.
3. Advance payment amount. It is determined at the discretion of the parties, and the legislation does not contain limits on the amount of the advance. Typically, for land transactions, an advance payment of 1-5% of the value of the property is expected, but not more than 10%.
4. Deadline for transfer of advance payment by the buyer.
5. Payment procedure: cash or non-cash form.
6. If the advance is paid to the seller’s account, then it is necessary to register the bank account details. In this case, confirmation of the fact of payment of the advance and its receipt in the account of the property owner will be a bank account statement. No additional documents will be required.
7. If cash payment is expected, then it is worth indicating the method of confirmation of payment: issuing a receipt, participating in the transfer of money to a notary, renting a safe deposit box, etc. This minimizes the risks of fraud and non-refund of the advance in the event of controversial situations.
8. Penalties and consequences of refusal to conclude a deal. They are determined by mutual agreement of the parties. For example, a fine of 5% of the advance amount or penalty for each day of delay in signing the main purchase and sale agreement. This point should be given a lot of attention in case of conflict situations. When calculating the amount of the penalty, the court will focus primarily on the provisions of the advance agreement.

The document comes into force after both parties sign it. The advance agreement does not need to be separately registered with Rosreestr or notarized. But the parties have the right to use notary services if they wish. But the participation of a notary minimizes the risk of challenging the contract in court and declaring it invalid. With his signature, the notary will confirm the fact that the parties are aware of the consequences of the agreement being concluded, are of sound mind and have full rights to sign this document.

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How is a deposit payment made?

The payment is documented and signed by the parties to the transaction. The Civil Code does not provide for a standard model, so you can draw up a document yourself, but be sure to indicate:

• data of the parties involved in the transaction (passport, full name);
• information about the deposit payment (its amount in numbers and in words);
• what responsibility is provided for each of those participating in the transaction;
• brief information about the agreement under which the deposit payment is transferred.

The earnest money agreement can be drawn up as an appendix to the contract, and the fact that the seller has accepted the money - a written receipt - can also be attached there.

Is one receipt enough?

The receipt only confirms the fact of transfer of money, but does not provide any legal guarantees to either party. To secure a transaction, such a document is also not enough.

Features of signing

The documents are signed by all parties to the transaction. Therefore, absolutely all property owners are taken into account. They also act as sellers under a contract. The interests of children under 18 years of age are represented by legal representatives.

By the way, the deposit amount is divided in equal parts between all property owners. For example, with a deposit payment of two hundred thousand rubles, four owners will receive fifty thousand each.

How to draw up an agreement?

The transfer of the prepayment is formalized in the form of an agreement. There is no legally prescribed form for the document, so you can draw it up in free form while maintaining the rules of business documentation.

Also, the amount of the deposit is not approved by law, so it is negotiated between the parties after the seller and buyer have agreed on the final cost of the land.

Typically, the prepayment amount is 5-10% of the price of the property being sold.

There is no need to have the document certified by a notary. Even without the signature of an authorized person, the contract will be considered an official document and can be presented as evidence in court.

Despite this, when filling out a deposit, it is often recommended to contact a law office, as a lawyer will help you draw up the document correctly, explain the difference between a deposit and an advance, and explain other nuances.

Attention! It is worth drawing up a deposit transfer agreement only if the buyer is actually ready to purchase the plot. Those. after inspection and testing of the land.

What payment amount will be optimal?

The final payment amount is not regulated by Russian legislation, so in fact it can be anything: at least 100 rubles, at least one million. The amount is negotiated and fixed by agreement.

In any case, the payment will be counted towards the main cost of the property.

Eg! If the property costs 3,120,225 rubles. and a deposit of 100,000 rubles has been made on it, then after the conclusion of the main contract the buyer will have to pay an additional 3,020,225 rubles.

The amount of the deposit can be calculated from the main price as a percentage. For an apartment this value fluctuates at 5-10%. In fact, it is not beneficial for anyone to make a large amount of the deposit payment, because if the deal is terminated due to their fault, the same amount (at a minimum) will have to be returned.

Legal Features

Without drawing up a deposit agreement, it is strictly forbidden to transfer money to the seller. Without this document, according to the law, there is no payment itself.

The seller must have original documents. The presence of only copies should alert the buyer, because they are easy to fake. Even certified copies should not be trusted. Unfortunately, cases of collusion are common in the real estate market, so ask for originals.

To minimize financial risks, keep in mind that:

• the buyer has the right to legally demand all title papers;
• if the seller is married, it is necessary to make sure that the plot is not joint property or has the written consent of the spouse.

It is not recommended to sign an agreement based only on photographs of the site. Be sure to check it out.

What to look for during inspection?

1. Presence/absence of buildings. If there are buildings on the site, remember their number.
2. Characteristics of structures. Are these buildings residential or not, what material are they made of, what is their size.
3. Presence/absence of trees and shrubs.
4. Maintaining the correct location of buildings from the boundaries of the site and trees.

All this information will be needed to compare the documents with what is actually on the site. For example, if on the territory of the allotment there are buildings that do not exist in technical terms, the new owner may subsequently have problems, since such buildings are considered unauthorized, that is, illegal.

Please also take into account that it is impossible to buy a plot of land with maternity capital if there are no residential buildings or a residential building under construction on the land.

What happens after termination of the contract

Termination of a transaction occurs in four cases:

• the seller is to blame: he did not prepare the paperwork on time, found an option to sell at a higher price, or changed his mind about selling the property altogether;
• the buyer is to blame: he found a cheaper apartment, changed his mind about buying, did not have time to find the required amount;
• it doesn’t matter who is ultimately to blame, the parties change their minds about entering into a deal by agreement;
• An unforeseen event occurred that made the transaction impossible.

Depending on who and what caused the termination of the agreements, the amount of money returned, as well as compensation for additional costs, depends.

Let's take a closer look at termination of the contract by agreement of the parties and the possibility of returning the deposit.

When is the deposit returned to the buyer?

Money is returned:

• double the amount if the seller is at fault and the transaction does not take place;
• to the same extent if the transaction did not go through due to the fault of the buyer or force majeure;
• in the same amount if the parties decide not to carry out the transaction.

In addition, if the contract is not fulfilled on time due to the fault of the seller, the second party has the right to demand compensation for various types of damage, as well as legal costs.

Advance agreement

Kurgan
May 29, 2023

We, Citizen Vladislav Mikhailovich Lysenko, born on January 1, 2001, living at the address Kurgan, 8 microdistrict, 38, apt. 89, passport ХХХХ ХХХХХХ, issued by the Federal Migration Service of Russia for the Kurgan region in the city of Kurgan 00.00.0000, hereinafter referred to as Seller and Citizen Marina Albertovna Guzeeva, born on January 1, 2000, living at 24 microdistrict, 47, apt. 6, passport ХХХХ ХХХХХХ, issued by the Federal Migration Service of Russia for the Kurgan region in the city of Kurgan 00.00.0000, hereinafter referred to as the Buyer entered into this agreement as follows:

The preamble to the agreement includes:

• type of transaction;
• place and date of conclusion of the agreement;
• names and roles of parties to the agreement;
• residential addresses and passport details of the parties.

The essential terms of this type of transaction are:

• advance amount;
• advance payment terms;
• full information about the apartment for sale.

What must be specified in the initial agreement for the purchase of property

The form of the initial contract is also not regulated by the Civil Code or other legal acts. All that is important is documentation, signing and mandatory indication of the following points:

• information about the entities involved in the transaction (names, surnames and data from the passport are indicated);
• date of preparation of the document;
• brief description of the object of purchase of the contract. If this is an apartment, then the address, number of rooms, set price, etc. are written down;
• until what date the main agreement will be signed (if necessary, the date can be delayed by an additional agreement);
• what amount of money was paid as a deposit payment;
• in what order the buyer will pay the remaining part of the price;
• what to do in the event of force majeure situations.

At the end, the signature of all participants is affixed manually.

Deadlines

The advance payment period lasts until the conclusion of the main contract for the object and full settlement with the Seller. This period is provided to the parties to the agreement to prepare the necessary documents and carry out formalities for the acquisition of the property.

For ordinary transactions, this period is 3-4 weeks, for transactions involving the preliminary sale of another object (to raise money) - 6-8 weeks. By agreement of the parties, the terms may vary, up to 12 months.

If, at the time specified in the agreement, the main DPA is not concluded, two options are allowed:

1. Sign a re-agreement with different terms.
2. Terminate the agreement and return the advance to the buyer (unless the agreement specifies penalties for the parties).

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Procedure after execution of the agreement

At any time before the expiration of the interim agreement, an agreement for the purchase and sale of a land plot is concluded. The prepayment document becomes an annex to the main agreement.

If the deal does not take place, then the parties can come to a peaceful agreement. If the seller returns the money, there is no need to draw up an additional agreement about this. However, it is recommended to write a receipt for the refund.

If the responsible party refuses to cooperate, the citizen has the right to file a claim in court for the return of funds. If the decision is positive, the money will be recovered from the responsible party.

Risks and nuances

The transfer of the deposit must guarantee the protection of interests of both parties. However, for the buyer, postponing the execution of the purchase and sale transaction is more risky, because:

• According to the law, money can be returned only if the seller decides to terminate the transaction;
• if the buyer experiences force majeure circumstances not specified in the contract, he will not be able to return the money;
• the procedure for returning money is lengthy, and if the contract is drawn up incorrectly, then it will not be possible to return the funds;
• If the transaction takes place, but defects in the property are identified, causing the purchase and sale agreement to be terminated, the deposit will still not be returned.

Important! It is convenient for the buyer to immediately complete the purchase. Since only after registering the transfer of ownership he will become the new owner. And the prepayment agreement does not even give the right to use the site.

Certification by a notary

The legislation of the Russian Federation does not clearly define the concept of “advance”.
The reservation is reflected only in Art. 380 of the Civil Code of the Russian Federation, where it is noted that an advance payment is considered to be the amount of prepayment to the Seller, unless the concluded agreement states that this is a deposit. The need to transfer an advance appears if the DPA cannot be concluded immediately, since the participants need time to prepare, that is:

1. Collect the required amount.
2. Prepare the necessary documents.
3. Execute alternative transactions.

Mandatory notarized confirmation of the advance agreement is not required. However, participants can perform such a procedure by mutual consent for greater security, especially if we are talking about transferring a large amount of advance payment.

In this option, the notary will assist in correctly filling out the terms in the agreement, and will also witness the transfer of the advance amount to the future Seller.

The cost of notary services to confirm an agreement ranges from 1000-2500 rubles and depends on the volume of the agreement, as well as tariffs depending on the location. For example, in the capital, notary services amount to a larger amount than in small towns.