Also known as an Early Release of Deposit Authority, the Section 27 is a request from the Seller to the Buyer for their consent to allow the initial deposit to be released to the Seller prior to the settlement day.
Why is it called a Section 27 (Early Release of Deposit Authority)?
The name of the Section 27 statement comes from Section 27 of the Sale of Land Act 1962, which specifies what certain circumstances the Seller may be able to obtain the Buyer’s consent to early release of their deposit money.
What is required to form the Section 27 statement (Early Release of Deposit Authority)?
The Section 27 statement requires the Seller to disclose details of any applicable mortgage on the property. This is for the Buyer’s information to check that the property’s purchase price will cover the money remaining on the Seller’s mortgage.
This ensures fairness and lower risk to the Buyer when they make the important decision to agree or object to releasing their deposit before the settlement date.
What if the Buyer objects the Section 27 statement?
Once a Section 27 is issued to the Buyer, the Buyer can either:
- Object to the request: The Buyer is given 28 days to make any objection to the request, after which the funds are automatically released . This means that if the Buyer does not object within 28 days, then it will be deemed as an automatic consent to release the deposit early to the Seller. If the Buyer objects within the 28 days with reasonable justifications then the Seller will not receive an early release of the deposit and must wait until the settlement date.
- Consent to the request: The deposit holder can release the deposit to the Seller once written confirmation of consent is received from the Buyer.
Wealthsource can help!
We can help you form and prepare a complete and accurate Section 27 with all necessary information to assist you in obtaining your deposit as quickly as possible. We include this work as part of our all inclusive service and package fees for Sellers, so speak to us about your property sale needs.
Feel free to contact us via [email protected] or +61 3 9590 6180 for more information.