Safest method to give a Developer a $ Deposit

[eyogina]

Hi
I am buying off the plan, and the Vendor/Developer/REA (same person) wants a 5% deposit. There is no slab/building yet, we are entering into a contract. What is the safest way to give a deposit. Can you put a deposit in both my name and the Vendor's name?
I thought a Bank Guarantee was safe until my Bank said, that I would have to put it into the Vendor's name, and the Vendor could call upon the money at anytime?
Can anyone explain the options and what would cover me best?
Cheers

 

[Ausprop]

it needs to be held in a solicitor's trust account in your name. Be careful - I just heard of a developer that took 6 figure deposits in his own name (illegal) and has blown the cash and can;t pay it back and can't get funding to develop. what a situation!

please get some legal advice on the contract you are looking to sign

 

[Bradsdad]

Deposit bond depending on how long the OTP is due. You'll require a pre-approval for loan 1st.
A deposit dond is cheaper than an IG and saves you using your money upfront.
There should be no reason why the developer shouldn't accept it as he can't touch the deposit anyway until settlement.


Regards
Steve

 

[mja]

Be careful - I just heard of a developer that took 6 figure deposits in his own name (illegal) and has blown the cash and can;t pay it back and can't get funding to develop. what a situation!

Sounds like the Storm Financial debarcle.