Q&As

Can a deposit held as stakeholder be released if one set of solicitors is unresponsive or provides spurious reasons for withholding consent?

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Produced in partnership with Kate Andrews of Hamlins
Published on: 09 January 2017
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When purchasing property (either Freehold or Leasehold, residential or commercial), usually a deposit is payable on exchange of contracts, which will be held by the seller’s solicitors as agent or stakeholder. If the deposit is held as agent for the seller, the seller’s solicitors can release the deposit to the seller at any time. This would usually be as soon as it has been paid.

In contrast, where a deposit is held as stakeholder, the stakeholder can only pay the deposit to the person rightfully entitled to it. The money cannot be handed to either party without the consent of the other as the stakeholder is the agent of both parties.

In residential transactions, the Standard Conditions of Sale (Fifth Edition) provides that the deposit will be held as stakeholder, save where the seller is purchasing another property in England and Wales. Similarly for commercial transactions, the Standard Commercial Property Conditions (Second Edition) provides that the

Kate Andrews
Kate Andrews

Hamlins

Kate is a partner in the Property Litigation department at Hamlins LLP and advises on a wide variety of contentious property-related matters. Her main area of practice is contractual and development disputes, including specific performance claims, injunctions, rights to light, insolvency issues, Party Wall Act disputes and the redevelopment of business premises. She also deals with dilapidations, service charges, applications for consent, rent reviews and other landlord and tenant issues. Kate trained with Nabarro, qualifying in 2003. She joined Hamlins as a partner in 2014.

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Jurisdiction(s):
United Kingdom
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Solicitor definition
What does Solicitor mean?

A lawyer who is regulated by the Solicitors Regulation Authority.

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