National Conveyancing Week: Be Wary of Reduced Deposits in a Conveyancing Chain


National Conveyancing Week: Be Wary of Reduced Deposits in a Conveyancing Chain

To mark this year’s National Conveyancing Week (NCW) (11–15 March 2024), conveyancer Gabriella Rinaldi-Clarke advises caution about reduced deposits.

What is a reduced deposit?

At the exchange of contracts stage of the conveyancing process, we will require the buyer’s solicitor to send us the 10% deposit (10% of the purchase price).

The deposit can be held in two ways: as stakeholder or agent.

  1. Stakeholder. The seller’s solicitor sends the deposit to be held in a solicitors’ account. This means that funds are kept in a solicitors’ account until the day of completion. The chain is unable to release any monies to the client until completion, although can use the funds for an onwards purchase as long as it is in England and Wales.
  2. Agent. This would mean the deposit gets sent to the seller. This is usually the case with developers who want the deposit to enable them to finish building works. Clients need to be aware of the risks involved in this approach, for example, if the developer goes into liquidation, you can lose your deposit. Some new build warranties offer deposit protection, so do check with your solicitor if your deposit is protected.

Occasionally, if there is a 95% mortgage in the chain, there are big jumps in property value, or monies are tied up in the equity in houses, a reduced deposit may come up the chain. It is very important for sellers to understand the risks involved in accepting this.

We do not advise accepting less than a 5% deposit.

If, after exchange of contracts, there is a failed completion at the fault of the buyer, the deposit paid at the point of exchange, whether it be 10% or less, would be the only compensation that will be immediately payable to you to compensate you for your losses.

The buyer would have a duty to make the deposit up to 10%, and you would be able to take legal action against your buyers should they fail to do so.

This could be for the balance of the 10% deposit you are entitled to or, if greater, the amount of the losses incurred because of the failed completion. The seller’s ability to recover these funds would depend on the buyer’s ability to pay it and therefore cannot be guaranteed.

Most sales and purchases do not fall through after exchange of contracts. However, there is always a risk that this might occur.

As your legal advisors, we must inform you of the risks associated with accepting a reduced deposit. We will ask for your authority to proceed with a reduced deposit before exchanging contract if it has been made apparent to us that a reduced deposit is being offered by the buyer’s solicitor.

What is National Conveyancing Week?

This year’s National Conveyancing Week follows on from the success of last year’s inaugural event which took place last March.

In 2023 the focus was on raising the profile of conveyancers and property lawyers in the home moving process, a role that is often undervalued, underappreciated and misunderstood.

The purpose of NCW is to: inform; educate; assist; motivate; reassure; help recruit new entrants; improve the profile of conveyancers and conveyancing and ensure fees can be set at and kept at an acceptable level.

To find out more about National Conveyancing Week, please visit the website by clicking here.

Conveyancing Solicitor Alton, Hampshire

Bookers & Bolton Solicitors is a Conveyancing Quality Scheme accredited firm providing residential property services to clients in Alton and Hampshire and across the wider UK.

We can provide specialist conveyancing services if you are buying or selling a freehold or leasehold property.

Our team utilises made-to-measure technology to ensure that we provide a fast, efficient, cost-effective conveyancing service to all our clients.

We understand that the procedures involved can appear complicated. Our team will cut through the jargon and explain the processes involved every step of the way.

To speak to one of our experienced conveyancers, please call 01420 82881 or email

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