Where is the deposit held when buying property in Malta?

The standard arrangement: held by the notary, not the seller

Notary Dr. Michael Laferla explains the standard practice plainly: the 10% deposit paid on the Promise of Sale (Konvenju) is normally held by the notary, deposited in the notary's client account, and released to the vendor only on the final deed of sale.

This is a deliberate protection for the buyer. The notary's client account is a regulated, separate account — the funds are not in the seller's possession during the months between the Konvenju and the final deed. If anything goes wrong with the transaction during that period, the deposit is held by a neutral, regulated officer rather than by the other side of the deal.

Why this keeps the buyer safe

The gap between signing the Konvenju and signing the final deed is typically several months — time during which the notary conducts title searches, the buyer arranges financing, and any conditions in the Konvenju are satisfied. Throughout this period the money sits with an impartial public officer. If the sale completes, the notary releases the deposit to the vendor at the final deed as part of the purchase price. If it does not complete for a reason that entitles the buyer to recover the deposit (for example a refused bank loan, where the Konvenju was made subject to financing), recovering money held in the notary's client account is far more straightforward than chasing funds already paid to a seller.

The developer exception: deposit paid directly to the seller

Dr. Laferla notes one common exception. In some cases — particularly with developers — the buyer and seller agree that the deposit will be paid directly to the vendor on the Promise of Sale, rather than held by the notary. In return, the buyer typically receives a reduced purchase price. The logic is commercial on both sides: paying the deposit directly helps fund the project's construction, and the developer passes back some of that benefit as a discount.

The trade-off: a discount in exchange for protection

The trade-off is straightforward but important — paying the deposit directly to the seller means giving up the peace of mind of having it held by the notary. If the transaction later runs into trouble, the deposit is already in the seller's hands, and recovering it is harder. This is a contractual choice the buyer is free to make; the notary's role includes making sure the buyer understands that the discount comes at the cost of that protection. Whether it's worth it depends on the buyer's confidence in the seller, the size of the discount, and their own appetite for risk.

Sources

• Dr. Michael Laferla — Yitaku Asks video (standard practice + developer exception)
• Maltese notarial practice — notary's client account as custodian of the Konvenju deposit
• Civil Code of Malta, Chapter 16 — deposit on account of the price (Article 1357) and the buyer's remedies
• Notarial Profession and Notarial Archives Act, Chapter 55 — the notary as impartial public officer