Release of deposit monies

Hi
I received a section 27 today requesting me to release the deposit to the vendors of the property I have purchased.
Due to damage to the property that has yet to be fixed I refused to sign, my conveyancer however tells me that the deposit will be released to the vendor after 28 days regardless of whether I sign or not. Does anyone know if this is standard?
Thanks
 
Do some checking but I think it is released if you agree or do nothing but if you have a problem put it in writing that you refuse to release the deposit until the issue is resolved to your satisfaction. Somebody else may be able to help you with more info.
 
Hi July,

Yes, this is pretty standard (the request for a Section 27). Here is the relevant legislation:

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

27. Release of deposit moneys in certain circumstances

(1) Where a legal practitioner or estate agent is holding deposit moneys as a stakeholder under section 24, the purchaser may by authorization in writing empower the legal practitioner or estate agent (as the case may be) to release those deposit moneys to the vendor in his own right or as the vendor directs.

(2) Sub-section (1) shall only operate-

(a) where the contract is not subject to any condition enuring or the benefit of the purchaser; and

(b) where the purchaser has accepted title or may be deemed to have accepted title.

(3) An authorization in writing shall not be effective unless and until the vendor has given the purchaser a notice in writing setting out-

(a) vif there is a mortgage over the land which is the subject of the transaction, the particulars specified in Schedule 1; and



* * * * *

(c) viparticulars of any caveat lodged under the Transfer of Land Act 1958 in respect of the land which is the subject of the transaction-

and the purchaser has given notice under sub-section (4) that he is satisfied with those particulars.

(4) Where the purchaser is satisfied-

(a) that the particulars provided under paragraphs (a) and (c) of sub-section (3) are accurate; and

(b) that the particulars provided nder paragraph (a) of sub-section (3) indicate that the purchase price is sufficient to discharge all mortgages over the property-

he shall give the vendor notice in writing to that effect within 28 days of receiving the particulars.

(5) A notice in writing under sub-section (4) stating that the purchaser is satisfied with the particulars shall be deemed to be the authorization required by sub-sections (1)(2) and (3).

(6) Where the purchaser is not satisfied with the particulars he shall within 28 days of receiving them give notice in writing stating that he is not satisfied with the particulars and giving the reasons why he is not satisfied.

(7) Where the purchaser fails to give a notice under either sub-section (4) or (6) within the time limited by the sub-section he shall-

(a) be deemed to be satisfied with the particulars provided; and

(b) be deemed to have given the authorization required by sub-section (1).

(8) Where a vendor knowingly or recklessly supplies false information to the
purchaser regarding any particulars required to be given under sub-section
(3)-

(a) he shall be guilty of an offence against this Act and liable to a penalty of not more than 50 penalty units; and

(b) the purchaser shall be entitled to rescind the contract for the sale of the land and recover the deposit moneys.

(9) Where an estate agent is empowered to pay deposit moneys to the vendor pursuant to sub-section (1) the estate agent may retain out of the deposit moneys an amount equal to the commission and any auction expenses that he is or will become entitled to and any other moneys that he is or will become entitled to by law in relation to the transaction.

(10) Notwithstanding section 2(1) of this Act, for the purposes of this section "mortgage" means a charge or lien on land for securing money or money's worth.

(11) This section shall not operate to authorize the release of deposit moneys which are being held by a legal practitioner or estate agent under section 9AA.
The sections you are most interested in are:


(2) Sub-section (1) shall only operate-

(b) where the purchaser has accepted title or may be deemed to have accepted title.
So you have to accept the title, which means that you have to say "Yes, I am ready to settle" (obviously pending banks and timing, but generally you must be happy to settle)

(6) Where the purchaser is not satisfied with the particulars he shall within 28 days of receiving them give notice in writing stating that he is not satisfied with the particulars and giving the reasons why he is not satisfied.
You CAN write to them (well, your solicitor to theirs...) and say that you are NOT happy with the deposit being released, and maybe say that you will be happy to release the deposit once the repairs are made and you are more satisfied.


7) Where the purchaser fails to give a notice under either sub-section (4) or (6) within the time limited by the sub-section he shall-

(a) be deemed to be satisfied with the particulars provided; and

(b) be deemed to have given the authorization required by sub-section (1).
This is what your solicitor was talking about. If you receive a section 27 and DO NOT reply, you will be deemed to have agreed to having the deposit released.

hope this helps,

asy :D



*usual disclaimers apply, I'm not a solicitor, this is not advice, check with your solicitor... blah blah blah.. :)
 
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