Congratulations! The paperwork is done, your buyer has paid the deposit and the countdown to settlement has begun. You've been asked to sign a Section 27, so when do you see the money?
Time to get acquainted with the Section 27 Statement.
The buyer’s deposit (usually 10 per cent of the sale price) is paid into a trust account, as per the Sale of Land Act requirements.
Under Section 27 of the Act, vendors can request an early release of the deposit (ie prior to settlement), provided that certain conditions are met:
- As the vendor, you have adequate equity in the property and don’t owe more than 80 per cent of the sale price.
- None of the conditions specified in the sale contract are in dispute.
From there, you can request a Section 27 Early Release of Deposit Authority.
This requires a little extra work from your solicitor/conveyancer so you’ll need to be prepared to pay for that service.
Once both parties have signed the Section 27 Statement, the deposit will be headed your way.
Time to pop the champagne? Maybe. But, there are still a few things you need to factor in:
- There’s no guarantee that a deposit will be released early, so don’t put yourself in a situation where you’re totally reliant on accessing that money ahead of settlement.
- In most cases, it takes about 28 days for a deposit to be released. If you’ve got a reasonably short settlement of 60 days or less, a Section 27 might not be worth the effort.
- The agent who sold the property for you is entitled to have their fees taken out of the deposit, so the amount that lands in your bank account will be the deposit less those fees.
Now, getting back to that champers—salute, chin chin and cheers!
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