Complaint for unreturned deposit, what to do

What to do if the deposit is not returned

When you enter into a preliminary contract having as its object a sale (or a real estate lease), one party usually pays the other a sum of money as a confirmatory depositpursuant to Article 1385 of the Civil Code, as a guarantee of compliance.

How to get your deposit back – Getty Images photo

What protections does the legal system offer to the party willing to comply if the other party does not return double the amount received?
In the event that the seller does not comply with the return of the deposit, it will be possible to contact the Giudice in order to ascertain the serious breach of contract by the person who received the deposit and his obligation to pay double the amount to the other party.

In fact, the obligation to reach the stipulation of the definitive contract with which the transfer of ownership takes place arises from the preliminary contract. Therefore, if the person who received the deposit, for example the seller, does not comply with these obligations, he will be forced to pay the fulfilling party the double of the same.

Let’s take a step back and explain what the preliminary contract is and what the function of the confirmatory deposit is.

What is the preliminary sales contract?

The preliminary contract, described by theArticle 1351 of the civil code, is the contract with which the parties undertake to stipulate, at a later time and according to agreed methods, the definitive sales contract (the notarial deed), of which the essential elements are determined.

Deposit and preliminary contract – GettyImages photo

It is therefore the transaction drawn up in written form with which the owner of the property (promisor seller) undertakes to sell to the other party (promisor buyer), who undertakes to buy at the agreed price.
From the preliminary contract only the obligation to contract arises; the typical effects of the sale will be produced at a later time, namely with the stipulation of the deed.
This period of time can be more or less long and anything can happen.

It may happen, for example, that the seller changes his mind and no longer wants to transfer ownership of the property.

What is the confirmatory deposit?

The confirmatory deposit It is a sum of money that one party sometimes pays to the other upon the conclusion of a contract, usually the preliminary contract of sale.

There are various situations that can occur once the deposit has been paid by one of the contracting parties to the other.

The first is that the parties have fulfilled the contract.
Whoever received the confirmation deposit must return it or charge it to the service as a whole.

What does it mean?
Let us assume that the deposit has been paid by the buyer; in the event that the latter fulfills the obligation to pay the price, the deposit will be charged as a price, i.e. the sum already paid will be deducted from the total of the sale price.

It may happen instead that the person who received it, for example the seller (but nothing prevents it from being the buyer) does not fulfill the obligation arising from the preliminary contract.
He no longer wants to sell and transfer the property within the established time frame and therefore does not appear before the notary to sign the deed.

At this point the buyer can withdraw from the contract and demand double the deposit.

The function of the confirmatory deposit

The function from the confirmatory deposit it is threefold:

• Of advance of the performance of payment of the purchase price;
• Of he confirms of the conclusion of the contract;
• Of compensation preventive damage, thus inducing the parties to comply regularly. In this case, the complying party is therefore facilitated as it will not have to provide proof of the damage.

What is the main function of the deposit? It has the function of conventional liquidation of the damage suffered by the party that intended to fulfill, following the non-fulfilment of the other.

The law recognizes the right to withdraw and to demand double the amount as compensation for the damages suffered for failure to stipulate the final contract within the agreed terms.

It is a sum, already quantified in advance, to be collected as compensation for damages, without the need to turn to the Judge for its determination because it has already been determined. We are faced with a form of out-of-court settlement.

Through a specific agreement, at the time of conclusion of the preliminary contract, the amount of damages possibly suffered due to non-fulfilment is quantified.

It is defined as confirmatory because it confirms that the transaction has taken place conclusion of the contract to which it refers and the agreement with which its amount is defined is a real agreement which is perfected with the delivery of the sum of money.

Requirements to get double the deposit

In order to be able to demand double the deposit, it is not enough that there is a breach by the seller who received it, but an additional element is needed: there must be a serious breach.

The breach must be culpable and of no small importance.

It is therefore not sufficient not to appear before the notary for the deed, unless the expected deadline has been defined as essential termfailure to comply with which alone justifies the termination of the contract.

Double house deposit – Getty Images photo

You need a guilt by the seller and the total loss of utility of the contract for the party that was willing to perform.

Other actions to protect the compliant buyer

In the case examined, in which both the salesperson a do not fulfill obligations arising from the preliminary contract, we must remember that the claim for double the deposit is not the only form of protection for the buyer.

This request does not exclude any other legal actions available to him.

In fact, you will always be able to exercise:

• the action to obtain theexecution of the contract by means of a ruling by the Judge with which the effects of the definitive contract are produced, or the transfer of ownership;
• the action for the termination of the contract in the ordinary way.

These roads are therefore not closed to you, but in that case the right to compensation for damages will be governed by the general rules and therefore the buyer will be required to provide proof of both the damage itself and its amount, keeping the deposit solely as a guarantee.

Failure to return double the deposit

What to do if, once the right of withdrawal has been exercised, the seller does not return double the confirmatory deposit to the buyer?

The non-defaulting party may contact the Giudice so that it formally recognizes and declares the existence of the right of withdrawal and of the failure to return of the amount due.

Failure to return double deposit – Getty Images photo

For the purposes of the legitimacy of the right to withdraw, pursuant to Article 1385 of the Civil Code, the Judge must ascertain the not of little importance of non-fulfilment, as we have already anticipated and as provided by article 1455 of the civil code.

To this end, the Judge shall take into account the relationship of reciprocal nature between the performances which are the subject of the preliminary contract to establish whether the delay or failure to perform can be considered of such importance as to justify the withdrawal of the other party.

Once serious non-fulfilment by the seller has been ascertained, the right to double the deposit ceases only if there is an unequivocal will to renounce to the same by the buyer.

According to what was stated by the Court of Cassation with the ruling n. 19801 of 12 July 2021, accepting the return of the check paid pursuant to article 1385 of the civil code, as a deposit, is not equivalent to giving up double the same.

According to the Supreme Court, acceptance cannot be considered as a manifestation of a consensual resolution of the preliminary contract nor of a tacit waiver of double the amount. Such acceptance is instead a neutral behavior that does not indicate any explicit will to renounce the right of withdrawal, which may also be asserted by submitting a specific legal questionin the event of the seller’s failure to spontaneously comply with the relevant obligation.