Certificate In Mortgage Advice And Practice (CeMAP) Module 3 Practice Exam

If the buyer reneges on the contract, what can the vendor do?

The vendor is entitled to keep the deposit and resell; if resale results in a lower price, they can also claim shortfall from the former buyer. The vendor can sue for damages beyond the shortfall. The seller must refund the deposit and void the sale. The buyer can sue the vendor for breach of contract.

Correct Answer:

The vendor is entitled to keep the deposit and resell; if resale results in a lower price, they can also claim shortfall from the former buyer.

Explanation:

When a buyer breaches a property purchase contract, the seller has remedies to protect against loss. The standard approach is for the seller to keep the buyer’s deposit as compensation and move to resell the property. If the resale price ends up below the original contracted price, the seller can claim the difference—the shortfall—from the buyer. This reflects the deposit acting as security for performance and the damages being measured by the drop from the contract price to the actual sale price. The seller wouldn’t refund the deposit or void the sale in response to the breach, and the option for the buyer to sue the seller describes the opposite scenario.

Access more questions from this quiz

Continue to Certificate in Mortgage Advice and Practice (CeMAP) Module 3 Practice Exam for more practice questions and the full quiz experience.

Access More Questions