Unless the Agreement of Purchase and Sale specifically indicates that the deposit is non-refundable and may be irrevocably paid to the vendor on termination, he or she may not unilaterally retain it. This may be a negotiated term of a commercial transaction, but it is not typical in a residential one. Typically, the deposit would remain with the deposit holder (realtor or solicitor) pending a court order or mutual release signed by both parties. The vendor cannot profit from the purchaser’s default. His or her entitlement would be to be made whole again, considering all of the costs sustained. The vendor would have to mitigate his or her damages by attempting to resell the property as soon as possible and limit the losses and carrying charges. If the vendor actually makes more money on the resale and there are no damages after tallying up all of the carrying costs, the vendor would not be successful in a court action to retain the deposit. If there is a shortfall, a Court Order may be sought for a judgment against the purchaser for breach of the Agreement of Purchase and Sale, whereby the release of the deposit may be applied towards the satisfaction of the judgment. The vendor would first have to prove that the purchaser defaulted under the terms of the Agreement of Purchase and Sale. If the deal was conditional in the purchaser’s sole discretion (for financing or a building inspection for example) and the purchaser did not waive the condition, the purchaser would not have defaulted and would be entitled to the return of the deposit.