These deposits are a service that our clients can use mainly when transferring ownership of a real estate or when acquiring other property. In cases like this they need to make sure that the purchase (or other) price will be properly paid. They can get that certainty through a deposit agreement. In accordance with the agreement the purchasing party pays the purchase price (or its substantial part) to the security deposit. This money is not forwarded to the seller before all agreement points have been completed.
The money (purchase price) is deposited into the trust account (the account of the security deposit), registered with our law firm. Each client has got their own exclusive account. Thus, their money is managed separated from that of both the other clients and the law firm as well.
Management of the security deposit accounts at the law firm is provided for by an agreement entered into between the law firm and the bank. This agreement sets conditions (limitations) as to 1) what the authorised person can do with the money; and 2) for which purposes the deposited money can be used. The bank cannot use the money deposited there to cover its claims, the money cannot become subject of a distraint procedure or inheritance and cannot be used as collateral.
Unlike the services offered by notaries or banks, the option we offer is cheaper. What is more, the whole process of organizing the deposit is less formal, since the agreement can also be entered into from a distance. Also, the security deposit can be applied in cases the parties enter into non-standard agreements.
To sum up, the advantages of security deposits at our law firm are:
- legal certainty provided to the parties in the agreement;
- management of the deposit account at the law firm is provided for by a special agreement with the bank, which sets limits as to what can be done with the money by the authorised person and also for which purpose the money can be used;
- money deposited in the security deposit is insured and the staff of the law firm is responsible for cashing the money out in accordance with the agreement; in case the law firm fails to abide by the rules, it is its responsibility to cover the damage incurred;
- the status of a safety deposit at a law firm is equal to the one at a notary or bank, but it is cheaper.