The boom in the real estate sector and market has meant that the deposit agreement is one of the means used by buyers and sellers.
Perhaps, many of you have heard about this contract, but really, what does it mean and what are the consequences of the deposit agreement?
The deposit contract is a type of contract for the sale of a property. Specifically, it is a private prior agreement between buyer and seller. In it, the parties undertake to enter into a contract for the future sale of a property in exchange for a sum of money as a deposit on the property.
Therefore, through this private contract between the contracting parties, both parties undertake obligations. Between them, the buyer reserves the right to purchase and the seller undertakes to deliver the agreed property under the negotiated conditions.
The importance of signing and formalising the deposit contract lies in ensuring compliance with the agreed conditions. Therefore, both the conditions of the sale and the possible consequences or penalties must be recorded.
In addition, the deposit contract must contain the minimum information required for any type of contract. In the case where one of the contracting parties is a married couple in a community of property, the signature of one of them will be sufficient. In the case of a couple in a regime of separation of goods or not married, both will have to sign the contract.
How do deposits work?
The concept of a deposit refers to the advance granted in a contract of sale.
The amount given by the buyer is a deposit, which will normally be deducted from the final price agreed. In this way, a contract is established in which compliance with the agreed conditions can be demanded.
The obligations of the deposit contract are similar to any other model of contract. Therefore, its compliance is just as obligatory as that of any other contract. Similarly, failure to comply with any of its clauses will also be penalised.
There are three different types of deposit: confirmatory, penal and penitential.
Confirmatory deposits are the most common. They represent an advance payment of the total price and act as a commitment to carry out the sale.
The penal deposit contract is used as a guarantee of compliance with the contract. In the event of non-compliance, it will mean a total or partial loss of the deposit provided.
Finally, the penalty payments imply the unilateral termination of the contract through certain conditions. Specifically, these conditions are set out in article 1454 of the civil code. In this same article, it is stated that the contract can be cancelled, allowing the buyer to lose them, or the seller to return the double. In this case, reference is made to the penalty deposit.
As you can see, this is a type of contract like any other and therefore all its possible consequences must be taken into account.