Counterparty Confirmation — Reservation Deposit
Confirm the commercial event before the money
A reservation deposit is often paid before the final sale instrument, so the greatest danger is ambiguity about what the payment actually does. Counterparty confirmation should establish the same facts across buyer, seller or developer, authorized intermediary, and payment recipient before funds become difficult to recover. The objective is not to collect signatures on a generic reservation form. It is to prove who is reserving which property, for how long, on what price basis, what event converts or credits the deposit, and under what conditions it is refundable or forfeited.
Identify the exact property
Use the strongest available identifiers: project, block, independent-unit number, floor, unit type and any official parcel or title reference already available. Marketing labels alone are weak because sales teams may rename unit types or reuse numbers across phases. If the property is not yet separately titled, record the approved project identifiers and require any later renumbering to be bridged by documented change control. Buyer and seller should be confirming the same unit, not merely the same project.
Confirm the receiving party and authority
Establish who is legally receiving the deposit and why that party is entitled to receive it. A developer, owner, authorized broker and unrelated collection account are not interchangeable. Where an intermediary receives money, the authority and contract should explain whether it is held on behalf of the seller, in escrow, or as the intermediary’s own fee. A last-minute beneficiary change is not an administrative convenience; it is a fraud and authority trigger requiring independent verification.
Agree the refund logic in plain language
The confirmation should state whether the deposit is fully refundable, conditionally refundable, credited toward the price, or potentially retained. List the specific events rather than using “non-refundable” as a blanket label: failure of due diligence, seller withdrawal, buyer withdrawal, financing, title defect, project document failure, missed signature deadline, or another defined event. If local mandatory consumer rules apply, contractual wording cannot simply erase those statutory protections.
Separate a reservation from a pre-paid housing sale
A deposit form may in substance be part of a pre-paid housing transaction. The Ministry of Trade’s current guidance states that, within that consumer regime, a valid pre-paid housing sale follows formal requirements, the buyer receives prescribed pre-information, and the seller cannot demand payment before a valid contract is made. Therefore, when the project and buyer fall within that scope, the team must not treat the word “reservation” as a way around mandatory form or consumer protections. Obtain legal review if classification is uncertain.
Confirm deadlines and next document
State the reservation start and end, the deadline for issuing the next contract, the documents the seller must provide, and what happens if a deadline passes. Buyer and seller should also agree how extensions are approved. An open-ended reservation gives poor evidence of whether the unit is genuinely held. If the final instrument is a notarized promise of sale, title transfer, or another formal document, name that next step explicitly.
Reconcile amount and payment evidence
The amount written in the reservation terms must match the bank instruction and receipt. Note currency and exchange treatment if relevant. The payment narrative should identify the project/unit and purpose without misleading wording. Cash payments or transfers to unrelated accounts create evidentiary and fraud problems. Preserve the buyer instruction, bank record and seller/authorized recipient acknowledgment as separate pieces of evidence.
Final confirmation record
A strong counterparty confirmation can be read by a new reviewer and answer: who pays whom, for which unit, how much, what is reserved, until when, what the money becomes if the sale continues, and when it must be returned. It should also name unresolved conditions and the source of each confirmation. If any party describes a materially different deal, the reservation should remain unsigned or unpaid until the difference is resolved.