Buyer has already paid earnest deposit for a property. On goodwill grounds, seller extended the 14-day grace period TWICE to at the request of the buyer to give him more time to secure financing. After 7 weeks, buyer asked if he can get back his earnest deposit as his loan was approved with the condition that he has a guarantor, but he couldn't find one. So the buyer decided not to proceed and requested for the deposit to be returned.

In this case, who has the rights to claim the deposit? Is the property agent also entitled to a share of the deposit as well? If the agent returns the deposit to the buyer, is the seller allowed to claim liquidated damages as the property was out of the market for 7 weeks?

Any agreement? By right, only refund 40%. Balance 60% shared with agent and owner.

What is stated in the booking form or letter of offer to purchase signed by buyer seller in the event the buyer is unable to obtain a loan ?

If is subject to buyer obtaining a loan and is unable to proceed because of additional conditions imposed by the bank, is same as not having secured a loan.

Therefore, the seller's agent have to refund the earnest money to the buyer and the deal is consider aborted.

Agent cannot claim for any fees as is subject to fulfillment of a condition, i e. to secure a loan.

Seller cannot claim for any damages, reason ... same for agent.

Next time, ask 'buyer' to secure the loan first b4 accepting his offer. You state that you will sell to anyone who comes first with an approved bank loan. Using this approach, you are not tied down to anyone and you must honour your words to the 'buyer' if he secured a loan.

This post has been edited by mini orchard: Oct 14 2020, 03:47 PM