Section 27 - Anything to worry about?

Hello all,

After a loooong back and forth- finally managed to get my 1st IP. Yay!!

Firstly, thanks to all those who helped me along the way:
http://www.somersoft.com/forums/showthread.php?t=60412

Been a few days since we exchanged contracts and today I got a call from RE Agent asking if I would be happy to sign Section 27 releasing the money to the seller (he is settling on another property soon).

From what I gather its just releasing money from RE Trust account to Seller's account. Any thing else to be aware/beware of?
 
It's early release of deposit to the vendor. It's standard practice in Victoria. Ask your solicitor first though before signing it.

thanks but what I meant was is if there a downside to signing it. Any risks etc.

Couldnt get my conveyancer- will try her later on.

The settlement is in four months - maybe thats the reason why the seller wants to go through with it.
 
thanks but what I meant was is if there a downside to signing it. Any risks etc.

Couldnt get my conveyancer- will try her later on.

The settlement is in four months - maybe thats the reason why the seller wants to go through with it.

Harder to get your deposit back if the sale bombs for whatever reason.

The Y-man
 
Harder to get your deposit back if the sale bombs for whatever reason.

The Y-man

Yep and there is also a high probability that the rea selling said property will get their commission paid (first) out of that tranche of funds released, assuming the vendor/seller signed such a clause in the selling agreement. Most folk don't read what they sign anyway.

I've never released funds until settlement. Seek legal advice.
 
I'm glad I've discovered these forums, I bought and sold at the same time about 18 months ago. My solicitor told me it was normal and nothing to worry about, releasing the deposit so I did. Nothing went wrong thankfully. On the other hand I was grateful to my purchaser for releasing my deposit though, which enabled me to use the funds on my purchase deposit. But having read some of the stories and problems that can (hopefully rare though) occur during settlement, I don't think I'll be releasing the deposit again.
 
We released the deposit as a gesture of goodwill the lady who sold us her PPOR - we knew she was buying another place.

Our solicitor was totally unhelpful in this regard, so we went with our gut feeling and released the deposit to make things easier for everyone. Everything was OK in the end, no dramas, and she left us a lot of generously sized plants that would've been expensive to buy ourselves. Maybe she didn't want to move them herself, but we'd like to think it was the goodwill that did it!
 
In Victoria it is one of the States that's has this system, as they have abolished Requisitions on Title the seller guarantees the Title.
In other States the seller can ask for a special condition to have the deposit released for another purchase only , but in Victoria you could do anything with the released funds.
This does seem a bit risky.
 
Always worth whilte chatting to a solicitor.

We have in the past used the section 27 as a negotiating point, we signed it for the vendor in exchange for them letting us in to the property early to start doing renovation work. This worked in that scenario because the house was abandoned and in bad shape - so they saw anything that we could do it it would be an improvement :)

Wishing you every success, Ana
 
Did a couple of these s27s. Actually 2 of the purchasers rejected this clause therefore making me wait 28 days on when it was served to their solicitor.

Other than that - from a vendor's point of view. it's only more secure that the purchaser would settle the property anyway.
 
Yep and there is also a high probability that the rea selling said property will get their commission paid (first) out of that tranche of funds released, assuming the vendor/seller signed such a clause in the selling agreement. Most folk don't read what they sign anyway.

I've never released funds until settlement. Seek legal advice.

Normal practice here in Vic. Besides, once the purchaser is unconditional the deposit sits doing nothing so might as well be released. It can be released after a clear 28 day period anyway so long as there is no valid objection.
 
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