What would happen if........

[Leondrums]

We have exchanged on some land with a large deposit...what would happen if the company/person we have purchased from went bust before we completed?

I am assuming the bank/administrators would be in control of his assets/debts and want the transaction to continue to 'recoup' as much money as possible??

What I'm getting at is would we potentially lose our large deposit?

[sleepezy]

Technically probably - but the administrators would be looking to sell the property anyway so you could contact them and confirm that you're still willing to complete on the deal. Given current market conditions your may well receive a positive response in order to get a property away with minimum fuss.

[Leondrums]

Any further comments?

[JustinP1]

If you have physically exchanged contracts then as far as I can see, on the agreed date the land is no longer theirs - it's yours. Further to that, you are still under contract to complete your side of the contract, being the remainder of the payment which should be forwarded to the administrators.

I would get in writing from them that this will be the situation.

[Leondrums]

This was my view, as we are under contract the administrators would want to see they deal go through (and get their money!). We have exchanged contracts already but not due to complete for a few months. I dont actually think anything is amiss, but in this market wanted to know where we would stand.

Edited by Leondrums on Monday 1st December 14:35

[paoloh]

The deposit is held by Solicitor, that would be safe.