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Posted 20 September 2013

Deposits – are you entitled to keep them?

Deposit payments form part of a legally binding contract between the park owner and the buyer of a holiday caravan.  So when a buyer contacts you and wishes to cancel the contract to buy a caravan, are you entitled to retain the deposit? The general and very broad rule is that ‘yes’ you are you are able to, but that you not able to profit from the cancellation.  This means that you should refund any amount of the deposit that is pure profit.  Whilst it is relatively easy to calculate losses to date, it may be difficult to quantify any future loss.  Extreme care should be taken when dealing with buyers to ensure that you are not retaining more of the deposit than is necessary to recover your losses.    It is advisable to ensure that your sales documentation covers the issue of the deposit and the situations in which it, or any part of it, is refundable.

If you have a query regarding a deposit or want advice on how to document the purchase please contact the parks team on 01392 207020 or email

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