Posted by: RM | May 29, 2009

Forfeit of Deposits

In the recent case of Aribisala v St James’ Homes (Grosvenor Dock) Limited the question of whether a deposit should be returned by the vendor upon the failure of a purchaser to complete a purchase of property was re-visited. The issue concerned the proper interpretation of section 49(2) of the Law of Property Act 1925 which confers upon the court a discretion to determine whether or not a deposit should be returned in such circumstances. In an earlier Court of Appeal case, Omar v El Wakil, the approach that a deposit should not normally be returned unless the circumstances were exceptional was adopted. It was followed in this case.

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