What is a section 27?

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Your house has sold. Congratulations! As part of the sale process the purchaser must pay a deposit for the property upon signing the contract. The deposit amount is generally 10 percent of the purchase price, however this can vary by negotiation.

What happens to the deposit on a property?

Once the deposit is paid it is then held in either a real estate agent’s trust account or alternatively a conveyancer or legal practitioner’s trust account until settlement occurs.

When is a section 27 used?

Sometimes the vendor of the property may request the deposit to be released prior to settlement. They may request this for example if they need to pay a deposit on a new property, or use it for another investment.

How does a section 27 work?

A ‘Section 27’  or ‘Early release of deposit authority’ gives permission to the agent, lawyer or conveyancer who is holding the deposit, to release it to the vendor. The early release of deposit can only happen if the contract is unconditional. There is no guarantee that an early release of deposit will be possible.

Who should I contact about a section 27?

To determine whether an early release of deposit is possible and appropriate in your situaton, you will need to talk to your lawyer or conveyancer.

For more information about Section 27 or Early release of deposit visit Consumer Affairs Victoria here.

Please note that this advice is general in nature and for more specific advice relating to your personal circumstances and individual situation you will need to talk to your lawyer or conveyancer.