When can the deposit be released to the Vendor before settlement?
The purchaser will often have a legal practitioner, conveyancer or estate agent hold deposit moneys payable to the vendor in the sale of property until settlement. However, in certain circumstances the purchaser may authorise the release of the deposit to the vendor prior to settlement.
Early release of the deposit is possible where:
- the contract is not subject to any condition enuring for the benefit of the purchaser;
- the purchaser has accepted title or is deemed to have accepted title;
- the vendor has given the purchaser notice in writing setting out if there is a mortgage over the land and the particulars of the mortgage and particulars of any caveats lodged on the land;
- the purchaser is satisfied with the particulars provided in the notice from the vendor; and
- the purchaser gives the vendor a signed notice stating that they are satisfied (or is deemed to be satisfied under the Act by the passage of time without objection).
As such, the notice provided by the vendor must contain details of any mortgage or caveat affecting the property. The purchaser should be satisfied that the amount owing against the property is low enough to be covered by the balance of the purchase funds payable at settlement before consenting to the release.
