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When purchasing property, a deposit is typically paid upfront as an initial payment and to demonstrate the purchaser's serious intent to purchase the property.
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When purchasing property, a deposit is typically paid upfront, usually between 5% and 10% of the purchase price. The deposit is held in the trust account of the real estate agent or property lawyer.
If the purchaser withdraws from the purchase or decides not to proceed with the purchase after signing the contract of sale, the vendor may be entitled to keep the entire deposit. This is because the deposit is seen as a sign of the purchaser’s commitment to the purchase.
At settlement, the purchaser pays the remaining balance of the sale price in return for the certificate of title for the property.
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A Section 27 deposit release statement is a document that allows the vendor to request the early release of the deposit from the purchaser. The statement must be in writing and must include the following information:
The information in the Section 27 deposit release statement is required to allow the purchaser to make an informed decision about whether to consent to the early release of the deposit. This information includes details of the mortgages and caveats that are registered against the property, whether the vendor is in default of any loans secured by the property, and whether there is sufficient equity in the property to discharge any loans.
If the purchaser considers it to be safe for the vendor to have early access to the deposit, they can sign the deposit release statement. The deposit money held on trust can then release the deposit to the vendor.
If the purchaser provides a written objection to the Section 27 deposit release statement with reasons for their objection, the vendor will not be able to access the deposit until settlement.
Here are some specific reasons why the information in the Section 27 deposit release statement is important for the purchaser to know:
The completed and signed Section 27 deposit release statement must be served on the purchaser. The purchaser has 28 days after service to respond.
If you have any questions about Section 27 deposit release statements, or any other aspect of the property purchase and sale process, please contact one of our property lawyers in Melbourne. We would be happy to help you.
If you are not familiar with the conveyancing process, it is important to seek professional advice from a conveyancer or solicitor.
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