15/12/2025
Buyers lose €64,500 deposit on a promise of sale (konvenju) after failing to complete property purchase
In a judgment delivered by Judge Henri Mizzi on 15 December 2025, the Civil Court (First Hall) held that the buyers were not in a position to complete the purchase of a Marsaxlokk property within the validity of a promise of sale and therefore could not validly compel the sellers to proceed with the sale. The Court also ordered that the €64,500 deposit be forfeited in favour of the sellers.
The facts of the case were that the buyers had entered into a promise of sale valid for nine months. The agreement was subject to several conditions, including that they obtain bank financing within 14 weeks, that the property be compliant with planning permits, that searches be in order, and that the buyers conclude the sale of their own property. The parties further agreed that if the buyers failed to complete the sale without a valid reason at law or under the contract, the €64,500 deposit held by the notary would be forfeited.
In February 2023, as the promise of sale was about to expire, the buyers did not have sufficient financing to proceed and requested an extension, which one of the sellers refused to sign. The buyers then attempted to secure a bridge loan; however, by that stage it was impossible for the bank to process the facility and complete the contract within the remaining five days.
Instead of withdrawing from the agreement, the buyers attempted to enforce the purchase in court by filing an official letter before the expiry of the promise of sale and instituting court proceedings within 30 days.
The Court held that this procedure can only be used where the other party unjustifiably refuses to sign the final deed within the validity of the promise of sale, and not where it is the buyer who is unable to complete due to lack of financing. The Court further ruled that an extension of a promise of sale is not a right, and that in these circumstances the buyers should have exercised their right to withdraw.
As a result, the Court dismissed the plaintiffs’ claims and ordered that the €64,500 deposit be forfeited in favour of the defendants, together with costs. Judgement is currently subject to appeal.
Defendant was represented by Dr Joseph Borda.