Losing Your Deposit

Since April 2017, and the market downturn after Premier Kathleen Wynn's announcement regarding her plan to cool the hot market, vendors have been increasingly requesting higher deposits with Offers for the purchase of their property. So what happens to the deposit if the transaction falls through? Who gets to keep it?

Deposits are held by the broker for the vendor. The broker, for all practical purposes, will not release the deposit without:

1. consent by both parties; or
2. a court order.

If a transaction closes, this is not an issue, as both parties consent to the deposit being released to the vendor and it being credited to the purchase price. However, where the transaction falls through, for all practical purposes, it will not be paid out without the buyer and vendor coming to an agreement as to who gets to keep the money (and hence the consent of both parties) or a Judge decides.