Buying an apartment: I’ve been told I will lose my deposit if I can’t close

If the deposit was paid on foot of an unconditional contract, you are in a tricky position

Earlier in the year I put my mortgage-free house in Dublin 8 on the market for €900,000. There were plenty of viewings but not one offer. I withdrew it last month. During October, feeling optimistic at the level of viewings, I put an offer on an apartment in Rathmines for €550,000.

I am now in a position of being unable to complete that sale. I paid a deposit of €55,000 to the agent. They now say they will keep the deposit if the sale is not completed by the end of the month. Have you heard of this happening before and any ideas of what I could do?

My broker has gone to the market and can only raise €260,000 from one institution. Any advice would be greatly appreciated.

It is not altogether clear from your email whether the deposit you paid was just a booking deposit or paid on signing contracts. €55,000 is 10 per cent of the purchase price and is considerably more than would normally be requested by an auctioneer by way of booking deposit. The standard contract for sale would usually demand payment of a deposit equal to 10 per cent of the purchase price, to be paid when contracts are signed.


A person who pays a booking deposit to an auctioneer is entitled to the return of that deposit where they do not proceed with the purchase, provided they have not entered into a binding contract. If you have not signed a contract, you should be entitled to the return of it in full.

The next step in the purchasing process after paying the booking deposit is to liaise with your solicitor, who will advise you to have the property surveyed and have your finance put in place before you sign contracts to ensure that you do not enter into a contract that you will be unable or unwilling to perform.

If you decide not to proceed with the purchase at this stage due to lack of finance, or indeed something arising on foot of the survey, you are entitled to walk away from the purchase and have the booking deposit repaid.

In your case, your solicitor would have recommended that you negotiate a condition in the contract making the purchase of the apartment conditional upon the sale of your property in Dublin. This would ensure that even if you paid the 10 per cent deposit on signing contracts, you would be able to recoup same in the event you were unable to sell your own house.

If you have signed unconditional contracts and the deposit was paid on foot of that contract, then you are in a much more difficult position and you should seek the advice of your solicitor immediately to review the terms of the contract you signed.

If you have entered into an unconditional contract, it is open to the vendors of the apartment to sue you for specific performance of that contract, in which case you could be forced to go ahead with the purchase or have your full deposit forfeited. In that regard, I note the value of the property you are selling is almost twice that of the property you are purchasing, and therefore you should make inquiries with your broker about whether a mortgage could be obtained over that property instead of the apartment, which would allow you to go ahead with the purchase. The mortgage over the house could be redeemed when you ultimately agree the sale of it.

If the agent is refusing to return your deposit, you need to consult with a solicitor immediately to review the documentation relating to this matter and to advise you on how best to proceed.

Samantha Geraghty, partner at P O’Connor & Son, solicitors, Co Mayo