When Is the Deposit Due When Buying a Home in BC?

You have found a home, and your agent is drafting an offer. One of the first questions is when the deposit has to be paid, and how soon you need the money ready. The answer depends on what the offer says.

This article explains the usual timing of a deposit in British Columbia, where the money goes, and what the timing means for both buyers and sellers. It does not cover how much a deposit should be, and it is general information, not advice on your own contract.

This article covers the law of British Columbia.

When the deposit is usually paid

BCFSA's consumer guidance says a buyer usually makes a deposit with the offer or after the offer is accepted. So there is no single fixed day for every purchase. The date comes from the terms written into your offer.

Some offers provide for no deposit until after subjects are removed. That is a choice made in the offer, so read the deposit wording closely before you sign.

• Deposit with the offer: money is delivered when the offer is presented.
• Deposit after acceptance: money is due once the seller accepts.
• Deposit after subjects are removed: money is due only once your conditions are cleared.

Where the deposit is held

The deposit is usually held in the licensee's brokerage trust account, and the brokerage holds it as stakeholder. As stakeholder, the brokerage is not holding the money for itself or for one side. It is holding it until the contract says where it goes.

The law backs this up. Receiving deposit money is part of what the Real Estate Services Act calls trading services. Licensees must pay money they receive into a trust account (s. 27), and withdrawals are controlled by s. 30. Breaking either section is an offence under s. 118(1).

Practising lawyers providing real estate services in the course of their practice are exempt from the licensing requirements of that Act. If a lawyer is handling a deposit, ask them how and where it will be held.

The risk of a late deposit

If an offer sets the deposit for after subjects are removed, the seller may not have any deposit in hand when they accept. BCFSA's guidance says a seller's agent should discuss the risk of not receiving a deposit at acceptance.

For you as a buyer, this means a seller may push back on a late deposit. If your offer is the one you want accepted, expect the timing to be part of the conversation.

What a seller can do about the timing

A seller who is uneasy about the deposit does not have to accept the offer as written. The seller can counter-offer to increase the deposit or to require it before subject removal.

BCFSA's offers guidance also recommends that only one offer be countered at a time. If you are in a competitive situation, ask your agent how a counter-offer will be handled.

Presales are different, and what to do next

If you are buying a new development from a developer before it is built, the rules differ. Developers must hold buyers' deposits in trust under the Real Estate Development Marketing Act (REDMA), and BCFSA can investigate if a deposit was not held in trust as required.

• Find the deposit clause in your offer and note the due date and the amount.
• Ask your agent whether the deposit goes to the brokerage trust account.
• Line up the funds ahead of time so that you can pay on the date required.
• For a presale, ask where the developer will hold the deposit and confirm it is in trust.
• Have a lawyer review the contract before you sign, especially if the deposit terms are unusual.

What happens if a deposit is missed or if a deal ends depends on the exact contract and the facts. A lawyer can explain where you stand before you act.

Frequently asked questions