Section 27 Deposit Release in Victoria
When a seller can have the deposit before settlement, and when a buyer should object
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In Victoria a seller can ask for the deposit to be released before settlement, often to use as the deposit on their next purchase. Section 27 of the Sale of Land Act 1962 sets the rules, and the buyer has a short window to object.
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When the deposit can be released
- The contract is unconditional: cooling-off has ended and finance and inspection conditions are satisfied.
- The buyer has accepted title, or is taken to have accepted it.
- The seller has given a written Section 27 statement with particulars of the property, including any mortgages and caveats.
- The particulars show the deposit is not needed to give clear title at settlement, for example because the price is enough to pay out the mortgage.
The buyer has 28 days
The buyer has 28 days from receiving the statement to object in writing, giving reasons. If the buyer does not respond, they are taken to agree and the deposit can be released. A buyer should check the statement against the title and the mortgage particulars before that deadline passes.
Why it matters
Once the deposit is released, it is no longer held in trust. If the sale later falls over, getting it back depends on the seller being able to pay. For sellers, a correctly prepared statement can release money for the next purchase weeks before settlement.
What clients say
“he assisted us with the sale of our Melbourne property and the outcome was great.”
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Questions about Section 27
How long does a buyer have to object to a Section 27 statement?
28 days from receiving it. If they do not respond, they are taken to agree.
Can the deposit be released if the contract is still subject to finance?
No. The contract must be unconditional first.
What should a buyer check?
That the mortgage particulars are complete and the price is enough to discharge them, and that there are no unexpected caveats.
Is there an equivalent in other states?
Not in the same form. Early deposit release in other states depends on the contract terms.
Related: Section 32 vendor statements | Conveyancing Melbourne | Property lawyers Melbourne
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