Conveyancing – transferring “deposit” money

* Please consult our previous post about deposits for more information.


Clients are usually confused as to when they actually need to pay the “deposit” money and where to. Some think that because their mortgage is calculated on the basis of the LTV (loan-to-value), which mainly means that it is based on the sum of the deposit you have available to contribute towards the purchase, they have to pay these money to their lender. This is incorrect.


A few days before the exchange of contracts, your lawyer will ask you to pay in to their client account 10% of your contribution towards the purchase price. Regardless of how much money you are contributing towards your purchase, it is vital to understand that your contract will state 10% deposit (contractual deposit) and this is what your lawyer must have on the client account before the exchange actually happens.


If you are contributing more than 10% towards your purchase, you will pay the rest of the money to your lawyer after exchange and before completion. Your lawyer will let you know when these money must reach their client account. After the contracts are exchanged you will receive a provisional statement of account, which will detail the balance that is due to be paid by you. This amount will include not only the rest of your “deposit”, if you are paying more than 10% of the purchase price, but also your lawyer’s fees, insurance or service charge apportionments (if any), Stamp Duty Land Tax calculation etc. The statement of account is only provisional because very often various fees need to be confirmed by your seller, as the seller’s liability to pay their portion of them depends on the date of the exchange of contracts.


You will have to transfer this balance before completion but it is vital to speak with your lawyer when this must happen. Please remember that you should not send any money to your lawyer’s client account until you are told to do so.


After completion you will receive an updated statement of account, which will confirm whether you owe anything (and you will have to pay the balance due) or you have paid too much and the balance will be returned to you.


If you would like to discuss any stage of the conveyancing process please contact Anna Przytula-Pieniazek: or call 0207 703 5034.