Get started with a quote
Your deposit is at risk: how much, when it's due, and what happens if you miss the deadline
/
Section 27 Early Release of Deposit (VIC)

What is Section 27 early release of deposit in Victoria, and how does it work?

Reviewed by a licensed conveyancer

Reviewed by

Cordell Smith

Last updated

July 24, 2026

Under Victoria's Sale of Land Act 1962, a buyer's deposit is normally held in trust until settlement — but Section 27 allows it to be released to the seller earlier, before settlement, if certain conditions are met.

In detail

Three things need to be true for early release to apply:

  1. The contract has no ongoing conditions for the buyer's benefit — like finance or building and pest inspection clauses.
  2. The seller provides a statement detailing any existing mortgages or caveats on the property title.
  3. The buyer is satisfied the statement is accurate, and that the purchase price is enough to discharge all mortgages over the property (in practice, the payout figure needs to be no more than 80% of the purchase price).

If the buyer isn't satisfied with any of this, they have 28 days after receiving the seller's statement to serve written notice objecting to the early release, stating their reasons — and the deposit stays in trust until settlement. If no valid objection is made within that 28-day window, the buyer is deemed to have accepted the statement and authorised the early release, and the deposit goes to the seller before settlement.

Objection scenarios at a glance

SituationGrounds to object?What happens to the deposit
Contract unconditional, statement accurate, payout 80% or less of the priceNo valid groundReleased to the seller if no objection within 28 days
Payout figure exceeds 80% of the purchase priceYesStays in trust until settlement
A caveat or mortgage the statement doesn't account forYesStays in trust until settlement
Contract still subject to finance or building & pestYes — the statement is prematureStays in trust until settlement

VIC · Section 27

Section 27 early release in practice (VIC)

In our experience, Section 27 requests are a routine part of Victorian purchases, but buyers are often unsure how to respond. A few things we see:

  • Buyers who don't realise the deposit can go to the seller before settlement at all, having assumed it stays in trust until the day.
  • Buyers who feel pressured to agree quickly, when they actually have 28 days from receiving the seller's statement to object in writing — and if they raise nothing valid in that window, they're deemed to have accepted and the deposit is released.
  • Buyers unsure what to check, when the real questions are whether any of their own conditions (such as finance or building and pest) are still on foot, and whether the mortgage payout figure looks safe against the price.

What we do is review the seller's statement, confirm those conditions are cleared, and object within the 28 days where there's genuine reason.

The takeaway: a Section 27 notice is answerable, not automatic — check the statement and use the 28-day window before the deposit leaves trust.

Common questions

What happens if I don't respond within the 28-day window?

You're deemed to have accepted the seller's mortgage/caveat statement and authorised early release of your deposit to them, before settlement.

Can my deposit be released early if my contract still has a finance condition?

No — Section 27 only applies if the contract has no ongoing conditions for the buyer's benefit, such as finance or building and pest inspection clauses.

Related explainers

Deposits in Property Transactions

A deposit is part payment of the purchase price you pay when signing the contract. Paying it on time secures the property and takes it off the market to other buyers; if you don't pay by the date required in the contract, the seller may terminate and claim compensation — even after you eventually pay.

→

Finance Approval Guide

Finance approval is your lender's formal agreement to fund the purchase. Where your contract is subject to finance, you must take all reasonable steps to obtain approval by the finance date — applying promptly and following up diligently — then notify the seller in writing before the deadline whether it's approved, waived, or not approved.

→

Consequences of Buyer Default (QLD)

A buyer default happens when the buyer fails to meet their contract obligations, and the seller then has several remedies available to recover their position and be compensated for losses.

→

Complying with Contract Conditions

Complying with contract conditions means satisfying the requirements your contract is subject to — typically a finance condition or a building and pest inspection condition — by the relevant deadlines. You must take reasonable steps to meet them in time, or you may lose the right to terminate on those grounds.

→

Buying a property?

Lock in a fixed-fee conveyancer who'll flag issues like this one before you're committed — no surprises, no hidden costs.

Get your fixed-fee quoteSpeak to a conveyancer

Fixed fee · No hidden costs · Rated on Trustpilot

Ask Zoe