Section 27 - Release of Deposit?

Newbie here, we won at an auction in April and our solicitor has now asked us for the release of the deposit (10%) under section 27. There are no caveats on the property as the conveyancer has checked it out and also the mortgage is less than 80%. I have 28 days to respond, else it gets released anyway....and am told I have no reason to object?

Anyone done this before, anything sinister behind this and anything I should look out for? I want to be on good terms for a smooth transition but the inside of me is reluctant to sign anything major like this. Any chance he can renegade on the auction as once money gets into his hands and the agent's its very hard to get back and I cant afford that.

The way I see it, I'm planning for an earlier settlement, would that be a smarter way to solve this?

Thanks!!

 

Sounds like the property is in Vic?

I would avoid releasing if possible. What if they remotgage the property, increase the loan, die, someone lodges a writ. Plenty of reasons why you may not be able to settle. If you do release seek legal advice on loding a caveat.

 

Yes in Vic.

I am trying to avoid releasing, but they say it will be released anyway after 28 days without notification...would an earlier settlement safeguard this issue?

 

Never do this if its just land or off the plan. What did your solicitor recommend.

 

If you settled within 28 days then yes.

Seek legal advice.

 

You can object. In which case the 28 days immediately ceases and the vendor may give up or bug you further under the s27 process

 

SALE OF LAND ACT 1962 - SECT 27 Release of deposit moneys in certain circumstances

 

what can we argue of not to release?

 

You can argue there are "conditions enuring to the benefit of the purchasers".

Your solicitor should be advising you about this...

 

It sounds as though based on what you've said, you really have no reason to object unfortunately. Being an auction, it's an unconditional contract of sale, and therefore there would be no special conditions enuring for the benefit of the purchaser. If there's no caveats or mortgages that are an issue, it's very hard to argue (equity is sufficient to cover your deposit). At best I'd say you'd just have to wait the 28 days. Really a Section 27 is pretty standard...

Source: I'm a property lawyer in Central Victoria

 

+1

 

You say no, wait the 28 days and see if their solicitor forces the issue. We have not had it pursued yet. I was annoyed when my conveyancer said I should allow based on what Badbanana said above - because my conveyance is there to look after my best interests. If the vendor doesn't settle and the agent has taken their fees and the vendor has spent the rest - good luck getting it back. Deposits go into a trust account for a reason. It is all good until it goes bad.
I appreciate contracts where this is added as a special condition - the s27 is served as part of the contract. It annoys me when a week after signing you get hit. To be fair, I would not issue the buyer of my property an s27. Each to their own.

 

Conveyancers are there to transfer title from A to B. You need proper legal advice on something like this. Consider that it only partially relates to property law. You have to consider the estate planning and litigation aspects - how do you get your deposit back if it doesn't settle.

 

I had experience in WA where my conveyancer asked me to seek legal advice as there was a break in before settlement. Guess I will use lawyer for all my settlements going forward, a sat least I get some basic advice for free to begin with.

 

Have done it a few times..it allows the R/E to access their commission earlier.

 

Real estate agents are commonly the main reason. Unless the vendor needs the funds for a deposit also. Why should you be funding the agents getting their fee early if the vendor doesnt ?