Chris, you were going to answer this as you were busy at the time, the bit about ‘how protected clients’ deposits are if your agency did go under due to ‘hanging on by the skin of their teeth’ you said’. This would also apply to agencies in general and I’m sure clients would like to know.
If you’d rather not answer on the forum, you could send pm to me 😉
Just back in a very wet Harrogate, but I have just been forwarded a ten day forecast for Marbella and it is heavy rain for 10 days, so probably better off here, so have the time to reply now yes.
I suppose it depends is the answer, upon a credit card it has always been my understanding that if an agent were to – abscond – go bust – or otherwise, then I believe under various acts, you would be entitled to claim against the credit card company for deposit as, goods or services were never provided, and they did give that agent the facility to take such sums in the first place.
We always operated a “client account” but really, there is no true safety in that per se, as all accounts could be misused or misappropriated in one form or another. I can recall back in the day taking in excess of £750,000 in credit card deposits in one weekend alone, so… yes, some margin for bedevilment there one supposes. But then who is going to sell 140+ properties in one weekend today I wonder? Or even 1 year maybe?
Cash or cheque I don’t think you have any recourse, but then where do you place the deposit?
With your lawyer? Well the vendors lawyer is not going to hold the property on that, if the vendor gets a better offer, he will take the better offer, and you know that happens as often now as before, in fact sometimes more so, when someone has gone to their absolute bottom line there is often another who may go slightly above.
With the vendors lawyer, well how you going to get that back if there is an argument, dispute or misunderstanding really?
And lets face it, if we are worried about someone taking the funds well it could be any of all three above, and four if you pay directly to the vendor.
The thing to do is progress as quickly as possible to the private purchase contract of course, as the reservation deposit could actually be ignored at any stage up until then , though most vendors are satisfied and very happy that the funds are placed.
Our old company went under early in 2008, sadly although we had in advance repaid all the deposits that were due to be returned, I think subsequently two clients decided post collapse to cancel their purchases and seek their deposits back rather than these be recognised as having been received within the purchase and deducted from commission due, and they then had to apply to the administrators, whom would then actually have given them a degree of preference. But that was a most unfortunate experience for them, as we ensured that no client during the time of running the company would not have had their funds protected.
However, yep it can happen, I suppose you have to look at who has the money and their background etc, I have money constantly with JET2 and they are a great little airline, but there was some Edinborough outfit went bust recently with millions of credit card fees paid, so goodness knows really.