How to correctly draw up a deposit agreement when buying a house with land?

Why is the document being drawn up?

The deposit agreement is drawn up in two cases:

1. The buyer does not have the necessary amount to purchase a plot of land and expects to receive money in the near future (takes out a loan, enters into inheritance rights, sells his property, etc.).
2. The seller does not have any documents required to complete the sale and purchase.

This agreement is the best way to secure the right to acquire land to a specific buyer. The deposit agreement is signed by both parties, which means that the risk of loss of funds and fraud is minimized.

The text of the document records the final cost of the allotment. This allows the parties to know the exact amount in order to make the final settlement under the purchase and sale agreement.

If for some reason the deal falls through due to the fault of the seller, the deposit is returned to the buyer in double amount. If it is the buyer's fault, then he loses the amount paid. If controversial issues arise, the deposit agreement is quite suitable as evidence of the transfer of funds in court.

To understand whether or not to enter into an agreement on a deposit, it is worth understanding what a deposit is from a legal point of view. This concept is provided for by civil law.

According to Art. 380 of the Civil Code of the Russian Federation, a deposit is a sum of money that is transferred in favor of one of the parties to the contract towards payments due under the main contract as evidence of the conclusion of the contract in the future and to ensure its execution.

If the buyer transfers any amount to the seller without documentation, he will not be able to return these funds by law. In addition to the agreement, a receipt can serve as a document confirming the fact of transfer of money.

In the event of fraudulent actions on the part of the seller in the absence of a document, it will be extremely difficult to prove that you are right. Words alone will not be enough for the court, so you should not neglect the preparation of an official paper.

How to purchase a house with land? Step-by-step instruction

If the object and the conditions for its acquisition are agreed upon by the parties , you should begin to draw up a civil contract. If the procedure is carried out with the participation of a realtor , the specialist will give qualified advice when checking the documentation and draw up an agreement himself. If the parties agreed on the purchase on their own , they can contact a law firm. Some citizens draw up a purchase and sale agreement on their own.

The entire regulations of this transaction for both parties are described in our article.

Preliminary purchase and sale agreement and deposit

First, a preliminary purchase and sale agreement (PPSA) is drawn up. It is required for the buyer to prepare money for the purchase of real estate or to wait for the bank to approve a loan for the purchase. If you are going to use maternity capital, read our material.

After drawing up the PDCP, the seller holds the property, removing it from auction and guaranteeing the transfer of the property to a potential buyer. A deposit when buying a house with a plot of land acts as a guarantee of a future transaction, which is transferred to the seller by the buyer (Article 380 of the Civil Code of the Russian Federation).

According to the rules, it is not returned if the buyer refuses the transaction. And if the procedure fails due to the fault of the seller, he returns it in double amount. When conducting a transaction, it is taken into account as an advance payment (Article 381 of the Civil Code of the Russian Federation).

This issue should be discussed between the parties in advance. If the counterparty does not agree with these conditions, it is advisable to issue not a deposit, but an advance. In this case, if the transaction fails on the initiative of one of the parties, the advance is simply returned (Article 487 of the Civil Code of the Russian Federation).

The PDCP contains basic information about the object that must be reliably transferred to the main contract. In addition, its separate provision establishes the period within which the parties are required to draw up and sign the main agreement.

Drawing up the main agreement

At the appointed time, the property transaction is approved by drawing up a civil contract.

It indicates contractors and real estate objects , the right to which is transferred to the buyer. The subject of the agreement should indicate:

1. Cadastral and technical characteristics of the building, the address of its location in the locality.
2. On what category of land it is located, the form of title ownership or ownership of the land plot is indicated.
3. It is determined that the real estate is (has) no encumbrances and is not mortgaged or under arrest.

The following are the provisions that define:

1. procedure for transfer of rights;
2. rights and obligations of the parties;
3. liability of the parties;
4. terms of transfer of rights;
5. terms of money transfer;
6. the amount of the cost of the memory;
7. the cost of the house;
8. amount of advance paid;
9. terms of termination.

It is permissible to include in this document any nuances regarding specific circumstances affecting the procedure.

The agreement is drawn up in three copies, which should be submitted for registration to Rosreestr immediately after drawing up and signing. Only after registration the transfer of rights will take effect.

Registration of the agreement in Rosreestr

When transferring documentation to register the ownership of a new owner when purchasing a residential building with a land plot, you must pay a state fee in the amount of 2 thousand rubles.

Registration takes approximately one month. During this time, it is permissible to transfer the property by acceptance certificate.

The acceptance certificate is drawn up separately:

• for a private house:
• on the memory.

After its preparation, the transaction is considered completed, provided that the documentation submitted to Rosreestr is drawn up in good faith.

Now you know how to purchase a house with land, but how to return the tax? More on this below.

Document preparation

The deposit agreement for the purchase of land does not have a legally established form. The parties can draw it up themselves or use the services of a lawyer.

You can get legal advice on our website. Enter your question in a special field, and an expert will provide you with legal assistance.

Contents of the agreement

Typically, the agreement has the following structure:

1. Name of the locality where the transaction is carried out;
2. Date of preparation.
3. Main text.
4. Signatures of the parties with transcripts.

The text part must include the key points of the transaction. The text states:

• the amount of the deposit and the final cost of the land plot (in numbers and in words);
• characteristics of the site by which it can be individualized (location, area, cadastral number, etc.);
• period of validity of the contract;
• conditions for returning money if the purchase and sale does not take place;
• contact details of the parties;
• other conditions that the buyer or seller considers necessary to include in the text.

The parties may be represented by their legal representatives on the basis of a power of attorney certified by a notary.

List of documents

To formalize the agreement, the following documents will be required:

• general passports of the parties;
• an extract from the Unified State Register or a certificate of land ownership;
• cadastral passport (if available);
• documents confirming ownership of buildings located on the land (if there are buildings).

In addition to the listed papers, others may be required depending on the situation. Concluding an earnest money agreement allows the seller to start collecting the missing papers without wasting time and without fear that the deal will fall through.

Design nuances

First of all, you need to verify the authenticity of the documents provided. Carefully study the title and title documents

. Compare cadastral numbers, area and other characteristics of the land plot.

When composing the text, you must accurately enter the full names and passport details of the parties. If errors are found, this may be grounds for invalidating the document.

Do not transfer funds or enter into a transaction if the seller does not have a certificate of ownership or an extract from the Unified State Register of Real Estate! These papers are the basis for the possibility of selling the land, so if one of them is missing, you should find another plot to purchase.

Be sure to agree on the deposit amount in advance. It is calculated in proportion to the value of the real estate and, as a rule, does not exceed 10%, although there are no restrictions

. The amount must be fixed in the agreement.

Another equally important detail is the validity period of the agreement. Usually the document is concluded for a maximum of two months

.
This time should be enough to prepare for the purchase and sale
. The next day after the expiration of the agreement, it is necessary to sign a land purchase and sale agreement.

How to ensure the integrity of the other party

When signing an agreement the following is used:

• passport or other identity document (used in the case of foreigners or citizens who have lost their passport and received temporary documents in return);
• certificate of ownership or extract from the register of rights;
• cadastral passport;
• information about permanent buildings on the land plot (cadastral or technical passport and documents confirming ownership).

The presence of original documents allows the buyer to make sure that he is not a fraudster.

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.

Before signing

Without an agreement on a deposit when purchasing a house with land, an apartment or other premises, it is absolutely impossible to transfer funds to the seller or another person. No document means no transfer according to the law. Excessive gullibility of potential buyers plays into the hands of scammers and unscrupulous sellers, who receive money and sell the property to a completely different person, if they sell at all. A deceived citizen has no right to demand anything from such persons if there was no official document.

However, before signing the deposit agreement, it is important to read each clause very carefully and check absolutely all the details with the original documents. If the seller does not have the originals, this is a reason to be wary, since copies are much easier to counterfeit. In addition, if there is indeed a good reason for the absence of originals, all copies must be certified by a notary. But we shouldn’t rule out fraudulent collusion, which is a very real thing in the real estate market.

We invite you to read: What expenses do the buyer and seller bear when buying and selling an apartment?

When will the deposit be returned?

Circumstances vary and sometimes deals fall through. For the issue of returning the deposit to be raised, the transaction may not take place due to the fault of the seller or the buyer. And this should also be provided for in the agreement.

The situation with the deposit in case of failure of the transaction is regulated by Art. 381 Civil Code of the Russian Federation. If for some reason the buyer refuses to purchase the land, the seller has the right to keep the paid amount for himself

. Refund of funds in this situation is possible only if the party who paid the deposit reveals fraud or legal impurity of the real estate. To get your money back, you will need to go to court.

If the transaction does not take place due to the fault of the seller, then he is obliged to return the deposit to the buyer in double amount. If this legal requirement is ignored by the seller, the buyer has the right to go to court.

It does not matter what the circumstances were why the purchase and sale did not take place. In any case, both parties have the right to appeal to the courts if one of them violates the existing agreements.

Deposit or advance?

The main difference between an advance and a deposit is that when paying an advance, the buyer does not receive any guarantees. If the seller finds a buyer who offers more, he will simply return the advance. While the transfer of the deposit entails serious liability for the party who violates the terms.

To demonstrate the differences, we can give the following example.

The buyer and seller entered into an initial agreement to complete the transaction to sell the home. At the same time, it was decided to pay part of the amount and draw up a deposit agreement. Subsequently, the property seller agreed with another buyer, who offered a higher price. And the seller approached the first buyer with an offer to terminate the contract and return the amount that the buyer paid. But in this case, the buyer’s rights are protected by the contract and, according to its terms, the seller, having violated his obligation, is obliged not only to return, but to double the amount received. Likewise, the buyer, if he had refused to fulfill the terms of this agreement, he would not have received the amount paid.

Upon termination of the contract, the advance amount is returned to the buyer regardless of the circumstances. The deposit remains with the seller if the transaction did not take place due to the fault of the buyer, and is returned in double size if due to the fault of the buyer.

Another example of how the execution of a receipt can affect the assessment of the actions of the parties to the agreement. The buyer and seller agreed to complete the transaction, and they signed a deposit agreement. But the receipt for the transfer of money did not indicate that this amount was being paid as a deposit. In this case, if the seller refuses the transaction, the court may decide that this is an advance. Accordingly, upon termination of the transaction, the seller will simply return the amount indicated in the receipt.

And if the receipt indicated that this was a deposit, then the seller would have to return the amount in double amount.

For the seller, paying an amount that will be considered an advance rather than a deposit is also more profitable in case of refusal of the terms of the agreement. The seller is always obliged to return the advance if the transaction is terminated at the negotiation stage, and the deposit will not be returned to the buyer if he violates the terms. Therefore, when making an advance payment, the buyer is guaranteed to lose nothing, even if he refuses the terms of the initial agreements at any stage before the final signing.

What to do next with the agreement?

The deposit agreement does not need to be registered. It is enough to save one copy for each of the parties

. In the future, the deposit agreement acts as an annex to the purchase and sale agreement.

The buyer of land is more vulnerable and takes more risk than the seller. To ensure guarantees, you can additionally have the document certified by a notary.

Lawyers recommend concluding not a deposit agreement, but a preliminary purchase and sale agreement. In this case, there is a greater chance that the parties will fulfill their obligations, since penalties increase significantly

. Such documents specify absolutely all the conditions of the upcoming transaction, which cannot be said about the deposit agreement.

Transactions related to land plots are associated with high risks. We recommend that you contact a competent lawyer for advice and to verify the correctness of the documentation provided.

Documents for drawing up a deposit agreement

Drawing up an agreement on a deposit when purchasing a house does not have any special requirements for documents. However, taking into account the terms and conditions of the contract, when drawing it up you will need:

It is recommended to check the correctness of the documents before signing the deposit agreement. The buyer must verify the seller's ownership, as well as the absence of other owners and the preemptive right of purchase of shareholders.

Separately pay attention to the marital status of the seller. If the house was purchased during marriage, then the consent of the spouse . If there are minor children, permission from the guardianship authorities for sale may be required.

Before signing, it is also recommended to obtain a notarized consent from the residents to be released from the house . If they are not evicted before signing the deposit agreement, the seller's corresponding obligation is included in the document.

When transferring funds in cash, a receipt . It is drawn up as an annex to the contract and must correspond to the date of transfer of money to the seller.

How does a deposit differ from an advance?

Advance and deposit are legally different concepts, although many people confuse them. An advance payment is an advance payment for the purchased real estate property. It cannot serve as a guarantee of fulfillment of obligations.

A deposit is a form of securing obligations and fulfilling agreements reached. If these agreements are violated, the guilty party will lose a certain amount of money.

This will not happen in the case of an advance payment. If the transaction does not go through, it is simply returned to the buyer.

Despite this significant difference, an advance and a deposit equally serve as confirmation that the parties have agreed to conclude a transaction in the future. However, the advance represents part of the final cost, and the deposit acts as a guarantor that the buyer has serious intentions to buy the land, as well as the other party to sell.

Legislative basis for a deposit when selling a house

If the house is sold, the deposit serves as a guarantee that all obligations will be fully fulfilled by the parties. The provisions are regulated by the Civil Code of the Russian Federation, Article 380. The amount of money agreed upon by the participants in the deed of sale is transferred from the future to the current owner, on account of subsequent payments. It serves as confirmation that the main CP agreement will be signed and executed.

In the event that the deposit agreement for a house with a land plot is not officially concluded, the transferred funds will be taken into account solely as an advance. A refund is possible, but only if the terms of the contract are not met by the seller. If the transaction is canceled due to the fault of the buyer, the entire amount remains with the owner of the property.

According to the provision of paragraph 2 of Article 380 of the Civil Code of the Russian Federation, only cash can act as a transferred deposit

Deposit agreement for the purchase of land - sample 2020

When purchasing an apartment, house or land, the sample document will look the same:

It is not always possible to immediately draw up a purchase and sale agreement for a land plot that the buyer liked due to its location, size, shape, and also fits into the price bracket, the limits of which were outlined by the future owner according to his capabilities.

How to transfer the deposit correctly and not be deceived?

Why do you need a deposit?

To understand whether an agreement on a deposit is really necessary when purchasing a plot of land, a house or other real estate, you should understand what the deposit itself is.
In Russian legislation, the deposit is mentioned in the Civil Code and is defined as the payment to the seller of a certain amount of money in cash by the buyer as confirmation of the subsequent signing of the purchase and sale agreement. It is important to remember that if a potential buyer makes a deposit without signing an agreement, receipt or other documentary recording of this fact, he will not be able to return his funds by law. Only the document confirms that the payment was actually made. If not, the seller can safely keep the money, and the buyer has the right to file a lawsuit if he believes that he can provide significant evidence that the money was transferred in the form of a deposit.

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In what cases is a document drawn up?

A deposit agreement for the purchase of a land plot can be drawn up in the following cases:

• the buyer was unable to collect the required amount and expects to take out a loan or receive money from his debtor;
• The selling party is missing some documents, which are expected to be received in a month or two.

Such a document is an ideal way to secure the right to purchase the plot you like without the risk of losing funds, since the agreement is signed by both parties. One of the paragraphs in the text of the document should specify the terms of settlement in case of a failed transaction, the potential owner of the plot is especially interested in this, because it is his money that was transferred as a deposit.

A deposit should not be confused with an advance payment!

The advance represents a portion of the entire cost of the plot of land, and the deposit assures the selling party of the seriousness of the buyer’s intentions to purchase a specific plot of land, and the buying party of the intention to sell to her, and in case of failure, the seller has a chance to receive double the amount of the deposit.

An important point for the future owner is to fix the cost of a plot of land; when drawing up the main purchase and sale agreement, the full and final payment will be made taking into account exactly this figure.

If the transaction does not go through, and the seller does not want to give the double amount of the deposit (and this is stated in the deposit agreement), then such double-sided paper is quite suitable for the court, especially if it is executed by a notary.

The limits of the deposit are not regulated by law, but practice shows that most often this amount is taken equal to approximately 10% of the full valuation of the land.

Purpose of the deposit

Earnest money is money paid to the seller before concluding a purchase and sale agreement. Such a payment is regulated by Articles 380 and 381 of the Civil Code of the Russian Federation and becomes a guarantee of the subsequent conclusion of a house purchase and sale agreement.

Taking into account these factors, the following functions of the deposit agreement :

A deposit agreement for the purchase of a house is drawn up if it is necessary to postpone the conclusion of the transaction. The relevance of the agreement may be due to the unavailability of documents, the lack of full amount from the buyer at the current stage, force majeure, or other circumstances.

If the seller and buyer have already reached an agreement, then an appropriate agreement is concluded. In this case, the buyer can be sure that the house will not be sold to a third party, and the seller can be sure that the buyer really intends to buy it.

Return Policy

The deposit for the house and land is returned to the buyer under the following circumstances:

The deposit is also returned if the terms of the agreement are violated. For example, when the seller does not have time to complete the documents on time or the parties do not conclude a contract for the sale and purchase of a house and land by the specified date.

By law, the seller must return twice the amount of the deposit as a penalty for failing to complete the deal. If the advance payment agreement provided for additional penalties and fines, they are also paid in accordance with the agreement.

The difference between a deposit and an advance

When drawing up a deposit agreement when buying a house, the transferred funds are often confused with an advance payment. These concepts are often used as synonyms, but according to the law they imply different meanings, order of execution and consequences.

Advance payment has different legislative regulations. Such a payment usually means a partial payment of funds when the purchase and sale agreement has already been concluded. Transfer of an advance payment does not guarantee fulfillment of the terms of the agreement and assumed obligations.

Taking this factor into account, the advance agreement for the purchase of a house with land can be terminated without consequences for both parties. The payment itself is returned in the same amount in which it was transferred to the seller.

Unlike an advance, a deposit has legislative regulation and is aimed at securing the transaction and obligations of the parties. If the agreement is terminated, the seller must return double the amount received.

How does a deposit agreement differ from a regular land purchase and sale agreement?

The land purchase and sale agreement is a full-fledged document, after signing which can be registered (provided that all attachments are available), while the deposit agreement is intermediate, secondary, confirming only the transfer of part of the money, and is an annex to the preliminary purchase and sale agreement.

It is impossible to obtain ownership of a land plot under a deposit agreement; you do not need to register it anywhere; you can only have it notarized to be on the safe side. Legislatively, the concept of a deposit is regulated by Articles 380, 381 of the Civil Code of the Russian Federation.

Structure and content of the document

There is no established form of agreement - the parties can draw up the document independently or with the involvement of a lawyer.

The deposit agreement form contains the following sections:

• name of the locality, date of compilation;
• information about the parties;
• text part;
• signatures of the parties.

The content of the text part should not be cumbersome, but include all the main points:

• the amount of the deposit and the full cost of the land plot, both in numbers and in words;
• main characteristics and location of the plot, including area, cadastral number;
• validity;
• conditions for the return of transferred funds if the transaction does not take place;
• force majeure;
• contacts of both parties for notification in case of changes in circumstances;
• other.

It is allowed for either party to be represented by a trusted person with a notarized power of attorney.

An approximate sample of a deposit agreement can be downloaded

Here

.

Filling Features

When filling out a deposit agreement, you need to enter information about the seller and buyer very accurately and in detail; special attention should be paid to the authenticity of the seller’s documents.

Before entering information about a plot of land into the contract, you need to carefully study the title documents for the land plot - how it came to the current owner, compare the area in all papers for the land, the cadastral number, to be sure that we are talking about the same plot . That is why you need to enter the details of all title documents, as well as the cadastral number.

Without a main document

—

certificates of ownership

—

There is no need to give away money and bind yourself to a contract; now there is a huge selection of a wide variety of land plots on sale, the documents for which are in perfect order.

If you really like this particular plot of land, then there will be no shame in looking at the originals of the seller’s papers to make sure of their authenticity: the presence of seals, the quality of the paper, etc., and also not to begin drawing up the deposit contract until you have become acquainted with your future property.

When inspecting, consider the following:

• the presence of buildings on the site, and if there are any, how many there are, whether they are residential or non-residential, approximate size, what materials they are built from;
• are there any bushes, trees;
• maintaining the correct location of buildings and trees from the boundaries of the allotment.

All these features of the site, noticed in nature, need to be compared with the plan. If buildings are not marked on the plan, then they will subsequently be considered illegal, which will lead to problems for the new owner.

It is important to record inconsistencies or immediately draw a conclusion about the advisability of acquiring such an allotment. Signatures alone on the document are not enough; transcripts of the full name are needed.

It is also important not to miss one important detail: the duration of the contract. Usually this period ranges from 1 to 2 months, that is, exactly as long as the parties need in order to be ready to formalize the main transaction.

The day following the expiration date of the deposit contract must be the designated date for signing the purchase and sale agreement.

Since the document deals with the deposit of funds, which, if cooperation continues, will be counted towards the purchase price, the deposit agreement should be noted as an integral part of the main contract.

Purchase of land using maternity capital

is impossible if there is no house built or under construction on the land being purchased.

Are you planning to purchase an apartment under a shared construction agreement? The sample and procedure for its preparation are described here.

To discharge your ex-husband from the apartment, you need to take several actions. This is discussed in detail in our article.