What are the Deposit and Deposit
Deposit - the amount of money transferred by the buyer to the seller as payment for the purchased housing and to evidence that the purchase obligations will be performed subsequently. As payment of the Deposit has all the properties of the advance.
In turn, the advance is a minimum amount that is paid by the buyer to the seller as part payment of the full value of the property. Unlike the Deposit, it performs only the payment function.
The difference between the advance payment and Deposit essential. If the buyer changes his mind to pay for the purchase, the Deposit will still remain with the seller. If the seller changes his mind, he will have to pay the other party the amount of the Deposit in the double size.
In addition, when transferring money a receipt must clearly specify that a certain amount is paid as a Deposit. This will get rid of the unnecessary worries both the seller and the buyer.
The main differences between advance payment and downpayment
The main difference from the Deposit of the advance is that the first serves as a proof of the contract and method of ensuring performance of obligations. And the down payment is only a Deposit on an apartment that is paid to ensure reservation of a certain option.
In this case, the transfer of money is also formalized agreement to make a down payment. The document specifies the rights and obligations of the two parties, as well as the consequences for breaking them (one of the parties gets another advance in full and in a single size). Requires the Deposit of the advance payment agreement that is in writing, regardless of the amount. The agreement may be in the form of receipts. It must be mentioned surnames, names and patronymics of the buyer and the seller, place of residence, passport data, the amount of Deposit and date of execution of obligation on it.
The advance does not have such a strong formal framework. Moreover, in civil law it is not even a question, although it plays an important role when purchasing property. To protect yourself from unnecessary risks, the seller and the buyer must also enter into an agreement on making the advance (in writing).
Summing up
An advance is a payment prior to the transfer of property or provision of services. The main difference from the Deposit is that it is not a guarantee of performance of the obligation and may also be at any time recovered. The advance does not oblige both parties to conclude between themselves a contract.
The Deposit is the amount that is issued on contract as evidence of their enforcement. The process of transmission and receipt of the earnest money is governed by articles 380 and 381 of the Civil code of the Russian Federation. The agreement must be in writing; it has legal force. The Deposit – of-a-kind guarantee, which ensures the fulfillment of obligations. But because clearance of the deposits is very common in the rental market and fully justified.
Both of these concepts should not be confused with the key – way to ensure commitment in which the pledgee is entitled to dispose of the money when it detects any debt of the other party. For example, when rental housing is usually a Deposit to cover any damage to property, flat, etc. after Receiving the money as collateral, a property owner has the right to compensate the damages caused by the tenant, and to pay for the repair.