What is a Section 27?
…And why it matters if you’re selling your home.
If you’ve been chatting with your conveyancer or agent and heard the term “Section 27” thrown around, you’re not alone in wondering what it actually means - and whether it matters to you.
At Woods, part of our role is making sure the jargon doesn’t get in the way of a smooth, confident selling journey. So here’s what you need to know, in simple, straightforward terms:
The Short Answer:
A Section 27 Statement is a legal document that can allow a seller to access their deposit early, before settlement. It’s named after Section 27 of
the Sale of Land Act 1962 (VIC).
Why Would You Want Early Access?
Normally, when a property sells, the deposit paid by the buyer is held in trust until settlement day. A Section 27 allows the seller to request early release of that deposit, which can be helpful for covering things like:
Deposit on your next home
Moving costs
Financial commitments ahead of settlement
How Does it Work?
Your conveyancer prepares the Section 27 Statement, which outlines details about your mortgage and confirms there are no issues preventing early release. This is then provided to the buyer’s conveyancer for approval.
For the deposit to be released early:
Your lender must confirm there’s no problem with discharging the mortgage
The buyer’s conveyancer must agree
The buyer has 28 days to object, otherwise, the funds can be released
A purchaser can object to the early release of the deposit in certain circumstances, but it isn’t simply a matter of choosing whether or not to approve it.
Before a deposit can be released under Section 27, the contract must be unconditional and the vendor must provide the required information about any mortgage or other debts secured against the property. The purchaser must also be satisfied with the information provided and that the requirements for early release have been met.
If there is still a condition operating for the purchaser’s benefit, such as finance, a building and pest inspection or the sale of another property, the deposit generally cannot be released until that condition has been satisfied or waived.
Where the contract is unconditional and the Section 27 requirements have been properly met, a purchaser cannot simply refuse early release without a valid basis for doing so.
In any event, the deposit cannot be released earlier than 28 days after the contract was signed.
Need Guidance?
We work closely with trusted conveyancers and can help you navigate whether a Section 27 is right for you. If you have questions, we’re here to help make it simple.
Give us a call to chat about your sale or your next step.
