What is a Section 27 Statement?
In order to get your hands on the deposit before your settlement you will need a section 27 statement.
Here are the 7 steps required to obtain an early deposit release on a property subject to a loan.
It should never be assumed or relied upon that your deposit will be released early as this is not always possible. The steps that need to be undertaken are set out below.
Step 1 Complete the Section 27 Deposit Release Statement and Discharge of Mortgage request as accurately as possible. Have you completed and returned both of these forms to your conveyancer? If so, go to Step 2.
Step 2 Is your loan over 80% of the sale price? (ie. you have sold for $400,000.00 and you currently owe or are able to redraw more than $320,000.00). If yes, it is highly unlikely that you will obtain early release of your deposit. If your loan is under 80%, go to Step 3.
Step 3 Are you currently in default or owe any arrears on your mortgage? If so, you are highly unlikely to obtain an early release. If your mortgage is in good standing, go to Step 4.
Step 4 Is there a Caveat registered on your title for any reason? If yes, the deposit may not be released. This will depend on why the Caveat has been lodged – please speak to your conveyancer. If no Caveat, go to Step 5.
Step 5 Your Section 27 Statement will then be served on the Purchasers’ representative. They have 28 days from service to do their due diligence, check the particulars and object to release of deposit. If no objection is received, go to Step 6.
Step 6 We receive a letter from your Bank confirming Section 27 particulars. The Purchaser’s representative will often object to early release. We need to satisfy the objections (usually by receiving a letter from your Bank). Most Banks take 1-2 weeks from receiving the Discharge Request however some banks will not be forthcoming with the required letter. You (as the Bank’s customer) may need to apply some pressure on your Bank to provide this.
Step 7 Wait for the Purchasers to return the Section 27 Deposit Release Statement– this can be up to 28 days. The sale must also be unconditional. Once 28 days have passed and there is no valid objection, your conveyancer should be able to authorise release on your behalf. Please remember there is no guarantee of early release.
The information in this website and the links provided are for general information only and should not be taken as constituting professional advice from the website owner - Kaye Charles Real Estate. KCRE is not a financial adviser. You should consider seeking independent legal, financial, taxation or other advice to check how the website information relates to your unique circumstances. KCRE is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this website.