أسئلة وأجوبة
How to protect my deposit if financing falls through?
Dear Lawyers,
I have verbally agreed on the sale price of a property I wish to buy.
What happens if I sign the MoU, deposit my 10% security, and the finance falls through, or the bank undervalues the property, meaning I’d need a larger deposit?
Can I get it written into the MoU that for such reasons I will not be liable to lose my deposit or cover agents' fees, and would this be legally binding?
Greetings,
Most likely, the sellers will try to confiscate the guarantee, but state explicitly in the memorandum of cooperation that the guarantee is refundable in the event of failure to finance.
For further inquiries about your topic, you can visit our office or contact us on WhatsApp at [------].
Dear Questioner,
It is possible to include conditions in the Memorandum of Understanding (MoU) that protect you in the event that your financing falls through or the property is undervalued by the bank.
These conditions can be legally binding if both parties agree to them and sign the MoU.
You can include clauses in the MoU stating that if you are unable to secure financing or if the property is undervalued by the bank, you will not be held liable for losing your deposit or covering agent fees.
However, it is important to clearly and specifically outline these conditions in the MoU to ensure that both parties understand and agree to them.
It is recommended to consult with a legal professional or real estate agent to ensure that the terms and conditions in the MoU are legally binding and provide you with the necessary protections in the event that your financing falls through or the property is undervalued.
You can add an additional clause to the MOU.
These kinds of terms can be added to the MOU to protect your security deposit. You can negotiate with the seller to include these terms in the MOU.
Add a clause making the sale "subject to finance" approval from your bank. This allows you to back out if the bank denies the loan or undervalues the property, requiring a higher deposit than you can manage.
If you need further clarification, kindly share your WhatsApp number.
Generally, such an instance where your finance might not get approved will fall under a force majeure clause.
As such, your 10% deposit would be refunded. However, this will depend on the specific terms and conditions under the MOU.
Therefore, we have identified the need for further clarification and detailed explanations before giving you a definitive answer.
Our firm offers complimentary consultations to assist with your legal concerns, which can be conducted online in a free 15-minute session.
Please contact us via email at [------] or call our offices in Dubai at [------] or Sharjah at [-------].
Jasim Al Haddad Law Firm
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