Holding Deposits - There's No Such Thing!
This was our very first posting on the Australian Real Estate Blog, almost a year ago. We reproduce it for two reasons. First, the problem has become worse. Second, a recent experience suggests that the holding deposit is being used to penalise purchasers, and creates an opportunity for theft.
Holding Deposits - There's No Such Thing! by Peter Mericka B.A., LL.B
A client recently engaged me to act for her in submitting her offer and negotiation her purchase of a home unit. I had been warned by the client that the estate agent was a bully, and that she would be difficult to deal with. I prepared the client's offer and faxed it to the estate agent, requesting that it be put to the vendor as soon as possible (as required under the Estate Agent Regulations).
The estate agent telephoned me and explained,
"We don't put any offers to vendors unless we have a holding deposit of at least $500." I was forced to explain to the estate agent that her demand for a holding deposit in the circumstances was improper, unprofessional, and highly illegal.
The estate agent quickly backed down, and submitted my client’s offer without any further nonsense.
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