Section 27 statement is designed to simplify the buying and selling of real estate. When you are buying or selling a property, you’re supposed to go sign a never-ending stream of documents. That’s why a number of people often get confused about which document they should sign first.
Using the services of a lawyer can make things easier for you. When you have an experienced lawyer or real estate agent by your side, you don’t need to worry about terms like Section 27 and Section 32. However, we’ll still describe some information about the Section 27 statement so you may stay informed while signing different documents.
Understanding Section 27 Statement
When a vendor needs to get the deposit release before settlement, they can take advantage of the Section 27 statement. However, it can be really difficult to get a letter to support section 27. In simple words, it’s a document that ensures the early release of a deposit. The purchaser needs to pay a deposit when they are purchasing real estate.
It’s supposed to secure the sale. Usually, the deposit amount is 10% of the sale price. The lawyer or the real estate agent keeps the deposit when paid by the purchaser. The vendor has the right to keep the entire deposit if the purchaser decides not to buy the property after signing the contract.
But if the entire process goes well, the purchaser pays the remaining amount at the time of settlement, and the title of the property is transferred to them. In a normal situation, the deposit is also released along with the rest of the amount.
But if a vendor wants to get the deposit amount earlier, they can use the Section 27 statement in Victoria. It usually happens when the vendor wants to invest the money or when they want to pay their own deposit on a new property. The deposit can only be released earlier if both parties sign the document.
Section 27 is a written request from the vendor where they ask the purchaser to release the deposit amount before settlement. Although the amount is in the hand of the real estate agent or the lawyer, they cannot release it unless the purchaser gives them permission.
In most cases, the process goes well and the vendor transfers the title of the property to the purchaser when the rest of the amount is paid. But some vendors start delaying the transfer of title once they’ve received the deposit earlier. That’s why buyers are usually reluctant to sign the Section 27 settlement.