Is it safe to accept a property buyer’s 10% deposit from a third party?

Be advised that accepting a 10% deposit from a third party is possible but carries risks, including enforceability and refund disputes. Ensure written authorization from the buyer and clear documentation of the deposit.

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Accepting a 10% security deposit from a third party (not the buyer directly) is not recommended without proper legal verification. While it is sometimes used in practice, it may expose you to risks such as:

• Difficulty enforcing the deposit if the buyer defaults.
• Challenges proving the buyer’s commitment under Contract F.
• Potential disputes if the third party later claims no liability.

To protect yourself, you should ensure the source of funds, liability, and buyer’s obligations are clearly documented before signing.

For a proper risk assessment and to ensure the contract is legally secure, we recommend booking a consultation or appointing Future Vision for Advocacy and Legal Consultancy to handle the transaction on your behalf. We are happy at Future Vision Law Advocates and Legal Consultancy to assist you and provide the best legal services that meet your needs.

Hello, as per your query, if the security cheque is not issued by buyer then you should not proceed with Contract F, since if there is any default from the buyer, then you can not sue the buyer.

Please contact us by email or call/ WhatsApp.

Thank you for your message.

In property sale transactions, the 10% security deposit should ideally be issued directly by the buyer, as it forms the basis of their financial commitment under the Form F (RERA Sale & Purchase Agreement). When the deposit cheque is issued by a third party, it is still legally acceptable in certain cases, but it also creates additional risks that you should be aware of before signing.

Your main exposures include:

• No direct recourse against the buyer if the third party’s cheque bounces or is withdrawn.
• Difficulty enforcing the deposit because the cheque drawer is not the contracting party.
• Possibility of dispute later, where the buyer claims they never issued a cheque and shifts responsibility to the third party.
• Complications at the Dubai Land Department during the transfer if the buyer’s funding source does not match the purchaser’s name.
• Potential AML/Source of Funds concerns if the third party is not clearly linked to the buyer.

To protect yourself, we normally recommend one of the following before you sign the Form F:

• Obtain a written undertaking from the third party and the buyer jointly.
• Ensure the third party is clearly identified as an authorized payor for the buyer.
• Replace the cheque with one issued directly in the buyer’s name, which is the safest option.

I can review the cheque, your Form F draft, and the parties involved and advise you on the safest way to proceed so you are not exposed to any avoidable legal risk.

Please feel free to contact me directly on WhatsApp or phone, and I will guide you step-by-step on how to secure your position before signing.

Yes, it is practically and legally permissible for a deposit to be made by a third party:

• A friend of the buyer
• A relative
• A company owned by the buyer
• A financier
• A partner

But… on one essential condition:

• That the third party is paying on behalf of the buyer and with their consent, and that they are not the actual buyer in secret.

Dear Sir/Madam,

Thank you for your query.

Regarding the 10% security deposit paid by a third party on behalf of the buyer, it is crucial to proceed with caution. While it is possible to accept such a deposit and sign Contract F, this carries certain risks, including potential challenges in asserting your rights if the buyer later disputes the deposit's validity.

We strongly recommend verifying the third party’s authorization via a valid Power of Attorney or other formal document and ensuring your contract clearly addresses the role and responsibilities related to this deposit. Doing so will help mitigate your exposure to disputes or delays in ownership transfer.

Our legal team can assist you by reviewing Contract F, verifying authorization documents, and advising on contractual safeguards to protect your interests. We can also represent you if enforcement or dispute resolution becomes necessary.

Please feel free to reach out to arrange a consultation.

Best regards

Accepting a 10% deposit from a third party instead of the buyer is not “wrong”, but it does increase your risk if the deal collapses.

The third party can later say “this money is mine, not the buyer’s”, and try to claim it back or dispute your right to forfeit it, especially if Contract F is silent on who really bears the risk.

In a nearly identical sale we handled, we protected the seller by adding clear wording that the sum is paid on behalf of the buyer, that the buyer remains fully liable, and that the third party waives any independent claim to the deposit if the buyer defaults.

The safest path is either to insist the deposit comes directly from the buyer or to sign only after a tailored clause or side letter is drafted and proof of relationship and source of funds is checked.

You can share Contract F and the deposit details for a targeted review by RASHID ALKAITOOB ADVOCATES & LEGAL CONSULTANTS.

This response is provided by RASHID ALKAITOOB ADVOCATES & LEGAL CONSULTANTS, based solely on the information you have provided, and does not constitute a final legal opinion. A binding legal assessment can only be given after reviewing the full documents of the case.