Section 27

[gldsaucer]

Hi all,

I am in the process of buying a property for the first time. Today, we have received section 27 from the vendor's solicitors to release the deposit earlier. The settlement is 1 month away. After googling I am leaning toward objecting this. What sort of implication will it have towards the sale of the property if I decide to object it?

Previously, I have requested the vendor to settle earlier because we have got our finance already, and the vendor doesnt seem to be interested. I was thinking if the owner needs the money, she should have come and approach me to settle at an earlier date.

What do you guys think? Thanks.

 

[Peter_Tersteeg]

If the contract is unconditional then the vendor is going to be entitled to the deposit. There's no real reason not to release it.

It could be argued that you want to ensure that the property is in appropriate condition at settlement before allowing the vendor access to the money. The vendor can force you to settle in most circumstances anyway, and I'd think that by not releasing the money you'd be annoying them so they're actually more likely not be accomidating later if you need them to be.

 

[gldsaucer]

I dont mind releasing it earlier, but its a bit fishy dont you think for releasing the deposit earlier but not want to settle earlier?

The reason that the vendor gave me for not want to settle earlier was because she have arranged for removalist. I would assume that if she is desperate, she could ask the removalist to come earlier?

 

[buzzlightyear]

I dont mind releasing it earlier, but its a bit fishy dont you think for releasing the deposit earlier but not want to settle earlier?

The reason that the vendor gave me for not want to settle earlier was because she have arranged for removalist. I would assume that if she is desperate, she could ask the removalist to come earlier?

Release of deposit monies is a different issue to the settlement date. There may be another compelling rationale other than the removalist for not to bring forward the settlement date, that the current vendor doesn't want to disclose for whatever reason. For example if they are purchasing another property, to move into, they may be co-ordinating the settlement of the new purchase with the settlement of this property.

Section 27 is pretty standard but there is nothing compelling you to sign it.

 

[Peter_Tersteeg]

It could be possible that the vendor has purchased another house and needs to put down a deposit herself, hence she wants you to release your deposit.

She may want to settle on that specific date because that is when her new property settles.

Or maybe she just wants the money asap .

Often agents will push for the release of deposit so they can get paid.

 

[gldsaucer]

are there any consequences that we need to know of if we release the deposit earlier? We are pretty much set on settling unless if there is anything that cropped up from their side..based on my research, the vendor could re-draw the money from their bank on the house and caused the money owing to be more than the money that we will pay at settlement. Is that possible? Sorry guys, I am really a newbie in this.

I have contacted my conveyancer to see what she say, she havent get back to me yet.

 

[The Y-man]

Would agree with others above that the vendor most likely has a purchase settling on the same day - otherwise all their stuff would need to go into storage and short term accomodation sought.

We have requested early release of deposit when selling our property - better in our hands than in a non-interest bearing trust account!

Cheers,

The Y-man

 

[sparky23]

I wouldn't be concerned about it, we have just made a similar request to our purchasers as we have to pay the surveyor that did the work for our seperate land titles before he will release the documents that need to go to land titles office. Its no biggy just that we hit the slippery slope before we could pay him last year so we put a clause in the contract advising that they would need to release some of the deposit to us and they will do that.

Yours is no doubt less complicated as people have suggested they probably just need the deposit to pay their deposit and don't want to move out before they can move in to the place they are buying.

 

[Bradsdad]

are there any consequences that we need to know of if we release the deposit earlier? We are pretty much set on settling unless if there is anything that cropped up from their side..based on my research, the vendor could re-draw the money from their bank on the house and caused the money owing to be more than the money that we will pay at settlement. Is that possible? Sorry guys, I am really a newbie in this.

I have contacted my conveyancer to see what she say, she havent get back to me yet.

I've had a client who came across this scenario. He was the vendor though. The lender wouldn't settle as due to X-Coll on a Lo-Doc facility and the fact the LVR was going to end up over 80%. Had some fun and games with that 1