Section 27 deposit release statement
When purchasing property a deposit must be paid upfront as an offer and to demonstrate the genuine intention of the purchaser in securing the property. This deposit generally ranges from 5% to 10% of the purchase price. The deposit is held in the trust account of the real estate agent or property lawyer. Section 27 deposit release.
If the purchaser of the property withdraws from the purchase or decides not to proceed with the purchase after signing of the contract of sale of real estate and Section 32, the vendor may be entitled to this entire deposit.
At settlement, the purchaser pays the remaining balance of the sale price in return for the certificate of title for the property.
What is a Section 27 deposit release statement?
The Section 27 deposit release, also known as an early release of deed authority, is a written request by the vendor for an early release of the deposit. The document itself contains particulars of:
–> any mortgage on the property
–> details of any further loan advances
–> whether the vendor is in default of their loan
–> the sufficiency of equity in the property to discharge the loan
–> whether there is caveat over the property
Th above information allows the purchaser to make a calculated decision as to whether to consent to the deposit release request.
If a purchaser considers it to be safe for the vendor to have early access to the deposit, the deposit release statement can be signed. The deposit money held on trust can then release the deposit to the vendor.
If a 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.
Serving the Section 27 deposit release statement
The completed and signed Section 27 deposit release statement needs to be served on the purchaser. The purchaser has 28 days after service to respond. If the purchaser ignores the Section 27 deposit release, after 28 days the deposit can be released to the vendor. A written objection to the section 27 deposit release statement nullifies the 28 days period.
Contact one of our property lawyers in Melbourne who can help guide you through the property purchase and sale process.