Clients often sell one property in order to buy another, but find themselves unable to pay the deposit on their purchase without funds from their sale.  Many ask the question: Can I access my deposit prior to settlement?

When you are selling a property, you are entitled to an early release of deposit monies in certain circumstances.  Section 27 of the Sale of Land Act 1962 allows a purchaser to empower your estate agent or lawyer to release the deposit monies to you where sufficient notice has been provided by preparing and serving a Section 27 Statement.

This Statement must confirm the following:

1.  That there are no debts secured against the property

If you have a mortgage or any debts, these must not exceed 80% of the sale price; and

2.  That there is no caveat registered on Title

If there is a caveat on Title, then you must provide particulars of the caveat for the purchaser’s consideration. 

If the purchaser is satisfied with the information provided on your Statement, then they may agree to the early release of deposit.  In circumstances where your particulars are not satisfactory, the purchaser is entitled to object to the early release.  The deposit will then be released to you at settlement. 

It is not uncommon for a purchaser to receive your Statement but take no action within the notice period.  In this case, if the above particulars are satisfactory and 28 days have elapsed, then the deposit can be released without requiring authorisation from the purchaser. 

Freeing up funds from your sale can facilitate paying a deposit on your new home or can take away the stress of finding a rental. It is important to understand however that the release of a deposit is not an automatic entitlement and even if the conditions of release are met, it can take up to 28 days.

If you require advice or assistance with this process, please do not hesitate to contact us on 03 9804 0035. 

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