What is a Section 27 Statement?

When a Vendor/Seller sells their property in Victoria they can request to access the deposit funds paid by the Purchaser prior to settlement of the property, subject to the conditions of Section 27 of the Sale of Land Act being satisfied.

A Section 27 Statement can be prepared by the Vendor’s conveyancer on behalf of the Vendor and served on the Purchaser’s conveyancer for the Purchaser to sign. Once the Statement has been received by the Purchaser’s conveyancer, the Purchaser has 28 days to return the Section 27 Statement to the Vendor’s conveyancer or object to the Section 27 Statement.

The Section 27 Statement must include details of the original loan amount borrowed against the mortgage registered on the title of the property, the amount owing on the mortgage, the current interest rate and default rate payable on the mortgage, the amount and frequency of mortgage payments of the loan to the mortgagee and if the Vendor is in default of the mortgage. A letter of evidence supporting the information contained in the Section 27 Statement must be obtained from the mortgagee and also provided to the Purchaser.

If a Real Estate agent has sold the property and a signed Section 27 Statement is provided to them or the 28 days has passed without any objection to the release of deposit funds by the Purchaser then the agent can release the deposit funds to the Vendor to their nominated bank account. Prior to the agent releasing the funds to the Vendor, the agent is entitled to take payment of their commission and fees.