Paying a 5% deposit instead of a 10% deposit under a Contract to purchase a property is very popular when property prices are high.
It makes sense when buying and selling at the same time because the deposit money is tied up in the property to be sold.
But as a recent Court decision illustrates, it is not a free ride for buyers.
Not only do buyers need to come up with the other 5% of the 10% deposit if they don't buy the property but they could lose the property if they don't pay the other 5% strictly on time.
In the Court decision, the vendor successfully terminated the Contract and kept the deposit because the buyer was two days late in paying the second instalment of the deposit.
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