On many occasions, when we proceed to buy a home we sign a deposit agreement or sign before signing the contract of sale, either in public or private document. It is a way to commit ourselves to the sale and to make clear the terms of it. Below we explain everything you need to know about this practice and the different types of deposit agreement contracts that exist
What is the deposit agreement?
The deposit agreement is a private contract in which the parties agree on the reservation of the sale of real estate (such as a house) giving a sum of money as payment and sign and both subscribers to sign a contract purchase in the future before a public Notary. But, what type of deposit are those that I can agree on a sale of a property?
Type of deposit I can agree on a sale of a property
There are three types of arras according to the intention of the parties:
The deposit will be paid by the buyer as part of the total price. If one of the parties did not comply, that is, the seller decided not to transmit the property or the buyer desisted from buying the real estate, the party injured by said breach may choose between demanding compliance or the resolution of the obligation, with the compensation of damages and losses of interests in both cases.
Confirmation deposits are regulated in article 1124 of the Civil Code
The deposit will be paid by the buyer as part of the total price. In this case and in the event that the sale is not made by public deed and before a Notary, if the termination of the contract is for the buyer's interest, the latter will lose the deposit that has been paid and if it is for the seller's fault, the latter must take back the doubled deposits.
The penitential deposits are regulated in article 1454 of the Civil Code.
The quantity that the buyer will lose or that the seller will duplicate in the event that the sale is not made due to a breach by one or the other party. Notwithstanding the foregoing, the person who has withdrawn from the contract may not be exempted from complying with the obligation by paying the penalty, that is, the damages and losses caused unless this was expressly stated in the deposit agreement. In the same way, the injured by the breach of the other may jointly demand the fulfilment of the obligation and satisfaction of the penalty if it is agreed in the contract in question in question.
Criminal charges are regulated in article 1153 of the Civil Code.
The choice of fixing one or another type of deposit will depend on the will of the parties, being that it is advisable to counsel with a lawyer as this will help determine which are the earnest that comes to satisfy the interests of the parties in greater measure.
The content of the deposit contract
- Personal data of buyer and seller, with their corresponding identity documents.
- Identification of the object of the contract (property, in our case).
- Possible property charges.
- Type of arras and consequences according to type.
- Amount of the arras and delivery method.
- The final price for which you will acquire the home.
- Distribution of sales expenses
- Maximum time to formalize the sale.
Credits: aobabogados.com, wikipedia.org