A seller of a property may require a buyer to enter into a lockout agreement.
It is usually drafted by the estate agent or the seller’s solicitor. It requires the buyer to pay an initial deposit to the seller’s solicitor to demonstrate their intention to buy the property.
The agreement will usually say that exchange and completion need to happen at a specific time and if they do not and it is the fault of the buyer, they will lose their deposit. The deposit should be deducted from the actual deposit paid on exchange of contracts. The deposit paid on exchange is different to a deposit paid under a lockout agreement.