Advance agreement
An advance is a preliminary payment under a purchase and sale agreement . Most often it is found in preliminary agreements, when the parties only confirm their intentions to conclude the main deal in the future.
Unlike a deposit, an advance payment has only a payment function - by its nature it is just a regular prepayment without any additional legal consequences. It does not force anyone to enter into a major deal in the future.
If the main transaction does not take place for any reason, the advance payment is returned to the buyer in a single amount. The seller does not have the right to withhold the advance amount, citing any “security” nature of the payment. If the seller refuses to return the money, the buyer goes to court to recover unjust enrichment and damages.
Sample contract
The advance agreement is concluded in simple written form. Externally, this can be either a separate document called the “Advance Advance Agreement” or a clause in the preliminary (or even main) apartment purchase and sale agreement.
In the contract, the advance payment condition can be written as in the example:
“The Buyer pays the Seller an advance in the amount of ___________________ (____________________) rubles. The advance payment is paid in cash at the time of signing this preliminary agreement, for which the Seller issues a receipt to the Buyer. advance amount is counted towards payment for the apartment under the main purchase and sale agreement.”
Please note that prepayment is referred to in the text as an advance payment. Advance agreement is possible
Read about the specifics of drawing up a preliminary agreement for a mortgage here
The procedure for depositing money by receipt
As a rule, the advance payment is made at the time of signing the preliminary contract. Depending on the situation, it can be transferred to the seller at any time before the actual transfer of the property. After the transfer of real estate, the payment will lose its preliminary nature; in fact, it will already be considered as the main payment.
Write down in the contract the exact deadline for making the advance payment (for example, “within 2 days from the date of signing the preliminary purchase and sale agreement” or “by November 15, 2020”).
Upon transfer of money, the seller issues a receipt to the buyer. The receipt is the only proof of the advance payment, so do not delay in preparing it . The receipt indicates:
- date and place of drawing up the receipt;
- names of the parties;
- against what obligation the money was received;
- amount in numbers and words;
- indication of no claims.
The seller signs the receipt with his own hand, after which the original is handed over to the buyer.
Most often, the advance is made in cash. However, the law does not prohibit other types of payments, including non-cash bank transfers or using an intermediary (bank or notary).
What else should you pay attention to in the preliminary contract?
Some sellers try to circumvent the law by writing in the contract a condition approximately as follows:
“If the main purchase and sale agreement is not concluded due to the fault of the Buyer, the advance amount paid is not subject to return by the Seller to the Buyer”
Thus, the seller tries to unilaterally give the advance the force of a deposit, but in such a way that it protects the interests of only the seller. Such a position does not stand up to criticism in court if it comes to trial. The advance amount will still have to be returned.
Real estate purchase agreement
Advice from lawyers:
1. The seller of the property canceled the sale at the last minute. A deposit was made in the manner prescribed by law with the signing of a deposit agreement. But changes were made to the agreement in the clause of responsibility of the parties (the articles in the clause did not change) by agreement between these parties, namely, that the seller returns the amount in full, and not double. The seller also refuses to compensate for losses incurred related to the purchase of real estate.
1.1. Julia, what is your question?
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2. We signed an agreement on a deposit to secure mutual obligations for the upcoming alienation of ownership rights to the property and towards its value. The agreement states that the sale of the property is guaranteed, but it turned out that the house was not delivered, the developer’s accounts were frozen, and the property was under encumbrance. We decided to refuse to purchase this property, is it possible to return the deposit paid?
2.1. Yes, it is possible, since the main sales contract cannot be concluded due to the fault of the seller.
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2.2. Yes, you have the right to a refund of your deposit.
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2.3. Elena, hello! You need to look at the terms of the contract. To do this, you can contact any lawyer. Probably (without taking into account the terms of the contract) you need to wait until the Seller is unable to fulfill his obligations, since if the house is not delivered, it is actually impossible to sell the property and then demand a refund. Sincerely, lawyer Dmitry KVN.
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3. The buyer gave me a deposit, but has not yet approved the mortgage. Now the buyer refuses to buy an apartment citing the fact that the bank refused to issue a mortgage. Our terms of the deposit agreement provide for the following clause: “If the bank refuses to issue a mortgage loan to the Buyer for the purchase of the above-mentioned property, this agreement is terminated... and the seller returns the deposit amount.” My question is: should I return the deposit?
3.1. Good afternoon Tatyana, in your case, in essence, you answer this question yourself, unless of course you signed the agreement, then it is not valid and you have the right not to return it, if everything is signed, and the agreement contains a return clause, you must return it.
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3.2. Hello, Tatyana... I’ll add a little to the previous answer. Ask him for an official refusal from the bank to provide a loan. After all, it may be that he is simply deceiving and has not applied anywhere. Plus, did the agreement stipulate which bank he was supposed to contact and within what time frame? Perhaps one refused, but another will provide.
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4. When purchasing real estate using MK, the transaction amount does not exceed the balance on the certificate. Is it necessary to formalize an agreement on the allocation of shares to children with a notary? Or can this be immediately stated in the purchase and sale agreement?
4.1. Hello! The commitment does not have to be written. You can immediately include all buyers in the contract, including children. And in this case, your expenses will be lower without a notary.
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5. I entered into an agreement with a real estate agency to sell my apartment and buy a new one. The contract ended in May. An hour later we found a buyer, do I need to conclude a new contract or is it enough additional? agreements to the old contract.
5.1. Good afternoon. In this case, you need to renew the contract, because Add. agreement is not applicable to a contract that has lost force.
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5.2. Good evening, Dear Elena, in this case, if the contract has already ended, then this is already your right. Whether to renew your relationship or not.
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5.3. Good day. An additional agreement to the concluded contract between you and the real estate agency is sufficient.
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5.4. Hello, we need to look at the terms of your contract to be sure that you may have to enter into an additional agreement first.
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6. The real estate service represented by the Contractor, in the agreement for the purchase of real estate, obliges them to make an advance in the amount of 150 thousand rubles towards the cost of the apartment for transfer to the Seller, but in fact this is payment for the work of the SN from the seller, and for the day of signing the Sale and Purchase Agreement. 1. The seller may refuse to sign 2. Registration of rights may be refused after 2 weeks. And 150 thousand rubles. already given away and how to return them?
6.1. The seller always has the right to refuse to sign an agreement to make an advance in the amount of 150,000 rubles. And if the advance has already been paid, then to return it, first file a claim; if the money is not returned within 10 days, you will have to go to court, Article 3 of the Code of Civil Procedure of the Russian Federation for the return of this money.
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7. The borrower and the lender entered into a targeted loan agreement for the purchase of real estate for a period. Upon expiration of the period, an additional agreement was signed to return the funds within 1 month after receiving written notice, and if the borrower cannot repay the debt with money, then he transfers ownership to the lender. Everything would be fine, both agree to sign a compensation agreement, but the bailiffs imposed a ban on registering the property. What should I do? To court? Thank you.
7.1. Hello! The situation must be considered in its entirety. But first of all, appeal the actions of the bailiff in court.
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7.2. Good night, Heroda! To speak substantively about your situation, you need more information! To begin with, go to the bailiff who is handling the case and talk. Good luck to you!
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8. The apartment was purchased in 1/2 shares with my son, but 90% of the payment is from my account, the rest of the amount and repair costs are paid by my son. To get a 13% refund, the tax office asks for an agreement on the distribution of shares. This is right? After all, since 2014, EVERYONE can receive a tax deduction of 13% of the amount spent on the purchase (shared construction) and renovation (finishing) of real estate.
8.1. Hello! Since there is no evidence of payment in equal shares, the Federal Tax Service requires an agreement on the distribution of the deduction. Otherwise, the deduction will be denied.
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8.2. Hello, Nadezhda. This is right. Each of you will receive a tax deduction within your shares. For the tax authorities, it does not matter from whose account the payment was made. Art. 220 of the Tax Code of the Russian Federation. If shares are not established in the purchase and sale agreement, then an agreement on the distribution of shares must be prepared. There's nothing wrong with that, don't worry. If anything remains unclear, ask, I will be happy to help.
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9. If the Agreement on making an advance towards the purchase of an apartment in a house under construction said: “the cost of the property is 3,510,000 and cannot be changed (and nothing is said about the glazing of the loggias), then will it be necessary to pay additionally for the glazing of the loggias? Thank you.
9.1. Hello. It is necessary to fully examine the agreement under Article 420 of the Civil Code of the Russian Federation for the correct application of substantive law.
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10. I am interested in the question of termination of the agreement for the provision of paid services when purchasing real estate. We have entered into this agreement with a real estate agency, but we will not be able to buy this apartment due to family reasons. The agency demands payment of a penalty.
10.1. Hello! You need to read your agreement, you can’t answer in absentia.
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11. On December 26, 2015, I entered into an agreement to make an advance payment for the purchase of an apartment with a real estate agency. I deposited 50,000 rubles. Currently there is no money to buy an apartment. The agency does not return the advance payment, citing a clause in the additional agreement to the contract, which states that a fine will be collected in case of refusal to purchase an apartment. Are the agency's actions legal?
11.1. Their actions contradict Article 782 of the Civil Code.
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12. We contacted a real estate agency to buy an apartment in a new building. We signed a deposit agreement. The transaction must be completed by May 30, 2020. The house must be completed in June 2020. As a result, the transaction was not completed. The offered apartment was not the property of anyone, the house was rented in October 2020. Should we get the deposit back? Thank you.
12.1. In such circumstances, request a refund of the deposit.
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13. Please tell me, if the agreement on accepting a deposit for real estate does not indicate the period for purchasing real estate, is this agreement considered unlimited?!
13.1. Hello. Yes, according to the terms of the contract.
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14. The husband does not claim real estate (several) that will be purchased in the name of his wife during marriage. WHAT DOCUMENT is needed so that the wife can dispose of real estate (and future ones too) at her own discretion, and what does this have to do with a division agreement if more than one-time purchase is possible and sale in the future?
14.1. Hello! You only need a marriage contract, which will indicate both the right to dispose of current real estate and the right to dispose of future real estate.
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15. When purchasing an apartment under a remote control, an agreement was concluded with a real estate agency for the provision of services for registering property rights and payment was made. Due to the fact that the construction is turning into a long-term construction, I wrote a statement to terminate the contract for the provision of services. To which I received a refusal to terminate the contract by agreement of the parties due to the fact that I did not provide documents for the provision of services. The contract has not yet expired, but the delivery of the house is delayed indefinitely.
15.1. A written refusal can be appealed in court if there are grounds for it. I recommend contacting a lawyer in person with the documents related to the case.
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16. The question is: after a divorce, does the agreement on the division of property between the former spouses have legal force. And how can you enter into it the purchase of new property as compensation, registering the property in the name of the ex-spouse, but at the same time the property is purchased without transferring money to the account for the transfer of other real estate by 3 persons.
16.1. Good evening. Yes, the agreement has legal force if it is certified by a notary.
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17. If real estate is purchased during marriage, and it is registered only in the name of the husband, then a power of attorney (agreement) must be drawn up from the wife stating that she agrees to the purchase. Is it necessary to issue such a power of attorney? And in the event of a divorce, wouldn’t it be a basis for the husband to appropriate this property without dividing it in half?
17.1. Then a power of attorney (agreement) must be drawn up from the wife stating that she agrees to the purchase. Is it necessary to issue such a power of attorney? - No, such a power of attorney is not needed.
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17.2. Not a power of attorney, but consent. It is advisable to formalize it.
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18. I am looking for a sample claim for early termination of a cooperation agreement for the purchase of real estate, which I concluded with a real estate company for a period of two months, because I'm not happy with the realtor's work.
18.1. Nika, hello! The claim must be made based on the terms of the specific contract. I do not recommend using samples; this is fraught with legal consequences. If you need help, please contact us.
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19. Made an advance payment for the purchase of a room. The seller is listed as TYPE (real estate agency). I didn't ask for a power of attorney. Those. Now I only have in my hands the advance payment agreement and a copy (not certified) of the state certificate. registration of rights, where the owner is XXX. What risk do I bear now?
19.1. The risk that the purchase and sale agreement will not be concluded with you and you will have to recover money from AN through the court.
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19.2. Greetings. If we are talking specifically about an advance, and not about a deposit, then if the contract is never concluded (regardless of the reasons and the guilt of anyone in this), the recipient of the advance is obliged to return it back to you in full.
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20. A written agreement has been drawn up to make an advance payment when purchasing real estate. The agreement expires, the seller did not have time to collect the entire package of documents, and asked to wait another week. We agreed. Will there be any problems with the return later, and how can we then prove that the transaction did not take place due to the fault of the seller?
20.1. Draw up an additional agreement with a modified term for concluding the contract.
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I want to buy an apartment in a new building in installments. Construction investors sell apartments through a real estate agency, which is their attorney.
The buyer of my apartment offered to do without the services of a real estate agency.
Deposit for purchase and sale
A deposit (Article 380 of the Civil Code of the Russian Federation) is a more serious legal instrument. This is not just a preliminary payment, like an advance, but also a measure that encourages the party to conclude a deal in the future.
It happens that the parties cannot, for some reason, conclude the main deal immediately. To ensure that efforts to agree on conditions are not in vain, a deposit is used to maintain the agreements reached.
Its peculiarity manifests itself in the event that the main transaction is never concluded:
- if the parties agreed not to conclude a transaction or if its conclusion is objectively impossible, in other words, if everyone acts in good faith, the deposit is returned to the buyer in a single amount;
- if the deal fell through due to the fault of the seller (for example, he changed his mind, found another buyer) - the deposit is returned to the buyer in double amount;
- if the deal fell through due to the buyer’s fault (for example, he decided to buy another apartment or simply changed his mind) - the deposit is not returned.
The deposit is a financial incentive to conclude a deal. The larger the deposit amount, the greater the incentive.
The amount of the deposit and how to arrange it correctly
The terms of the deposit are drawn up in writing. This can be either a separate “Deposit Agreement” or a clause in the preliminary purchase and sale agreement:
“To ensure the conclusion of the main purchase and sale agreement, the Buyer pays the Seller a deposit in the amount of ___________________ (____________________) rubles. The deposit is paid in cash at the time of signing this preliminary agreement, for which the Seller issues a receipt to the Buyer. deposit amount is counted towards the payment for the apartment under the main purchase and sale agreement.”
Please note that the text contains the word “deposit” and also emphasizes the security nature of the payment. If you do not directly refer in the text to the fact that the prepayment is a deposit (the word “deposit” or a reference to Article 380 of the Civil Code of the Russian Federation), the court will consider such payment an advance.
The deposit is made in the same way as described above for making an advance payment. The seller issues a receipt on receipt of money, the original of which is kept by the buyer.
The amount can be any - by agreement of the parties.
A sample deposit agreement can be obtained from this link.
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Is it possible to terminate a deposit agreement?
By downloading a ready-made sample deposit agreement, participants in an apartment purchase and sale transaction minimize the risk of errors. However, the contract can still be terminated. The procedure can be carried out at the initiative of both parties.
Video
The first option is possible if the buyer has identified shortcomings in the apartment or the premises differ significantly from the stated description. Termination of the agreement makes sense as long as the main purchase and sale agreement for the apartment has not been signed, payments have not been made and ownership has not been registered with Rosreestr. If the above steps have already been completed, the procedure is considered pointless. The entire deal must be terminated.
What to do if the main deal falls through?
Further actions depend on whose fault the main agreement was not signed.
Buyer actions
If the main transaction fell through due to the fault of the seller, first write him a claim demanding the return of the deposit in double amount. In your claim, refer to the preliminary purchase and sale agreement (or deposit agreement), the deadline for concluding the main transaction and the reasons why the transaction fell through. After 30 days from the date of receipt of the claim by the seller, feel free to go to court with a statement of claim.
If the deal fell through due to your fault, you cannot demand the return of the deposit. Even if you go to court, your claim will be denied.
Seller's actions
If the deal doesn't go through due to the buyer's fault, you simply keep the deposit. In the event of a legal dispute, refer to the circumstances why the deal fell through.
If the deal falls through due to your fault, return double the deposit to the buyer. If you do not do this voluntarily, the buyer will go to court, and then you will additionally have to pay the plaintiff's legal costs.
The most important point in the contract is to determine the legal nature of the payment . The legal consequences of failure to conclude the main transaction will depend on which payment you choose. If the main purchase and sale agreement is successfully concluded, there is no difference between the advance payment and the deposit - the prepayment amount will be taken into account during the final settlements.
How to return the deposit?
One of the parties has the right to terminate the deposit agreement for significant reasons. For example, serious irreparable defects were discovered in the apartment, which were not noticed by the buyer during the initial inspection. The issue of returning the deposit is considered in the following order (Article 381 of the Civil Code of the Russian Federation):
- The agreement is terminated by mutual consent. The received amount of money is returned to the buyer.
- The buyer refused to fulfill the terms of the preliminary agreement. The deposit amount remains with the seller.
- The seller refuses to fulfill the terms of the agreement. Then he is obliged to return to the buyer not only the deposit, but also an additional amount of the same amount as compensation.
In practice, this obligation is often violated by sellers. To restore justice, the buyer has the right to file a claim for recovery of the double deposit in court:
- for a claim up to 50 thousand rubles - to the magistrate's court;
- for claims exceeding 50 thousand rubles - to the district court.
The plaintiff will have to document the fact of failure to fulfill obligations under the deposit agreement by the seller.
It should be taken into account that some situations may deprive the buyer of the opportunity to return the deposit. This usually happens when a realtor is involved in the transaction and asks for a deposit before the preliminary purchase and sale agreement is drawn up and the deposit agreement is finalized. In this case, the realtor keeps the deposited amount for himself and does not transfer it to the buyer. Accordingly, it is not a guarantee payment under the contract.
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If the deal falls through, the money transferred by the buyer is not returned, since in its essence it cannot be considered as a deposit. Therefore, you should not give cash to the realtor, but only to the seller or his representative with a notarized power of attorney and only within the framework of the deposit agreement.
Remember
- If you do not state the advance (deposit) condition in writing in the documents, the seller will not have the right to require the buyer to make any advance payment at all.
- Precise wording in the documents will avoid ambiguity during the transaction, as well as if a legal dispute arises.
- If the contract does not specify the name of the payment, but there is a reference to Art. 380 of the Civil Code of the Russian Federation – we are talking about a deposit. If there are no instructions, the prepayment is considered an advance.
- The agreement on the deposit (advance payment) can be drawn up as a separate document, but it is easier to include the condition in the preliminary agreement.
