Section 27 Deposit Release in Victoria: A Buyer and Seller Decision Guide

A Section 27 statement asks a Victorian buyer to release the deposit to the vendor before settlement. If the buyer gives no written response within 28 days of receiving the disclosed details, the law treats that silence as approval.

For the seller, making the request does not guarantee quick access to useful cash. The mortgage payout, the contract conditions and the buyer’s response can make the exercise worthwhile, slow or completely pointless.

Current as at 1 September 2026. This is general information about Victorian law, not advice on your contract.

The short answer for buyers and sellers

If you are the buyer: agreeing is reasonable when the disclosed mortgage and caveat details are accurate and the price clearly covers the mortgage payout. If the statement shows a $380,000 payout but the lender’s supporting letter shows $412,000, objecting while that discrepancy is resolved is reasonable.

Doing nothing is not the cautious option. After 28 days, silence is treated as satisfaction with the details and authorisation to release the deposit.

If you are the seller: asking is worthwhile when the sale price comfortably clears the mortgage and the deposit solves a real funding problem. On a $900,000 sale with a $90,000 deposit and a $500,000 mortgage payout, that deposit is genuinely available for the next purchase.

If the mortgage consumes almost the entire price, asking just moves a settlement shortfall into your hands early. Your conveyancer prepares and serves the statement. Your decision is whether the numbers justify starting.

What a Section 27 statement does

A deposit is commonly 10% of the price, although Victorian law does not set one standard amount. When an estate agent manages the sale, the deposit normally stays in a trust account until property settlement, when the balance is paid and the property changes hands.

Consumer Affairs Victoria’s guidance for sellers, last updated in May 2021, also describes the agent holding the deposit in trust until settlement. Before release, it is not money the seller can simply spend.

A Section 27 statement starts the early-release process. It gives the buyer information about any mortgage and caveat affecting the property. A caveat is a recorded claim that someone asserts over the title.

The Act calls this information the particulars, which means the disclosed details. Those details allow the buyer to assess whether the price will clear every mortgage and whether the information appears accurate.

A Section 27 is not part of the Section 32

The similar names cause unnecessary confusion. A Section 32 statement discloses information about the property before the buyer signs the contract. It may cover title details, planning controls, services, outgoings and other matters affecting the land.

A Section 27 statement deals only with releasing the deposit before settlement. It normally appears after the contract has been signed and starts its own 28-day response period.

The practical distinction is timing and purpose. A buyer reads the Section 32 to decide whether to buy. The buyer reads the Section 27 to decide whether money already paid should remain protected in trust.

A Section 27 request applies under Victorian law. Similar early-release arrangements in New South Wales or Queensland may follow different rules, even when people use similar language for them.

The 28 days run from receiving the disclosed details

The 28-day clock starts when the buyer receives the disclosed details, not when the contract was signed. It does not run from when the seller first asked their conveyancer about release either. For example, a buyer who receives the statement on 3 September does not have 28 days from the auction or contract date. The response period runs from 3 September, assuming that is when the required details were received.

The current Sale of Land Act 1962 says a buyer who gives neither response within the allowed time will:

“be deemed to be satisfied with the particulars provided” and “be deemed to have given the authorization required”

Here, deemed means treated as, after 28 days of silence, the buyer is treated as satisfied and as having authorised release.

Release may happen sooner if the buyer gives written approval and everything else required for release is already in place. If the buyer objects in writing with reasons, the seller cannot rely on silence after 28 days to obtain the money.

Agree, object or do nothing

Your choice	What it means	What happens to the deposit	What you give up
Agree	You confirm in writing that the disclosed details satisfy you	It may be paid to the seller before settlement once the other requirements are met	The protection of having that money held in trust
Object	Your representative sends a written notice within 28 days, explaining why the details do not satisfy you	It remains in trust unless you later authorise release or another lawful basis applies	Nothing. The money stays protected; the seller loses early access
Do nothing	The law treats you as satisfied after 28 days	It may be released without your active signature	The same trust protection as agreeing, but without making a deliberate choice

Buyers should first check whether release is available

Early release cannot operate while the contract remains subject to a condition. In everyday terms, the contract needs to be unconditional.

If finance approval is still due on 20 September, for example, the seller cannot obtain release on 10 September merely because the Section 27 statement has arrived. The finance condition is still protecting the buyer. The same issue can arise while a building inspection condition or cooling-off period remains open.

The buyer must also have accepted title, meaning they have reached the point of no longer questioning the seller’s title to the property, or be treated as having accepted it.

An older standard contract contained a term connecting 28 days of silence with acceptance of title. That term was removed from the current standard form. The available evidence does not resolve how the acceptance-of-title requirement is satisfied on every current-form contract, so it must be checked rather than assumed.

Objecting is reasonable when the details or figures do not work

The buyer’s central test is narrow. The disclosed details must be accurate, and the mortgage information must show that the purchase price is enough to discharge every mortgage over the property.

Suppose the price is $700,000 and the disclosed mortgage payout is $720,000. The price does not cover the mortgage, so the financial test is not met. If the statement says $640,000 but reliable supporting material gives a materially different figure, the accuracy question also needs an answer.

Missing or inaccurate caveat details can support an objection. The mere existence of a caveat does not automatically do so, because the Act requires disclosure of any caveat rather than a caveat-free title.

An objection only counts if it is in writing, arrives within 28 days and gives reasons. Your conveyancer prepares and sends that notice. The buyer’s job is to forward the statement immediately and explain any concern. If nobody is acting, choosing between a conveyancer and a solicitor becomes urgent.

This decision requires advice on your own contract, particularly where the disclosed figures conflict or title acceptance is unclear.

Agreeing means releasing financial security

While the deposit remains in trust, it is available to be dealt with when the sale completes or if the contract ends in circumstances covered by the law. Once released, that money may be spent before settlement.

If the seller defaults and the buyer then cancels the contract, the Act gives the buyer an entitlement to the immediate return of the deposit. An entitlement is not the same as cash already sitting safely in trust.

For example, if an $80,000 deposit has been released and used toward another purchase, the buyer may have to pursue its return rather than receive it directly from the trust account. This article cannot predict recovery in that situation or what a court would decide.

An estate agent holding the deposit can currently retain commission, auction expenses and certain other amounts from released money. If the agent is entitled to $18,000 commission from an $80,000 deposit, the seller may receive only the remaining amount.

The 80% rule is not in the Act

The Sale of Land Act does not contain an 80% mortgage limit. Its financial test asks whether the purchase price is sufficient to discharge every mortgage over the property.

The 80% figure came from a previous standard contract. According to the Legal Practitioners’ Liability Committee’s September 2025 contract update, the current standard form removed its early-release conditions.

A $590,000 mortgage on a $700,000 sale exceeds 80% of the price, but the price is still enough to discharge that mortgage. On the current standard form, the old percentage test does not decide the issue.

The old rule has outlived the contract that carried it. The Consumer Affairs Victoria deposits page mentioned earlier still presents the 80% rule as the general position, and it counts the 28 days from the day the contract was signed. The Act counts them from the day the disclosed details arrive, and the Act’s count governs.

Check which contract you have:

• Current standard form: the old 80% condition is absent, so the Act’s accuracy and mortgage-payout tests apply.
• Older standard form: the contract may still contain an additional 80% condition.
• Contract with a special condition: its wording must be reviewed, but it cannot reduce the buyer’s 28-day rights under Section 27. A term allowing only five business days would not replace the full period.

Sellers should test the payout before asking

Early release is worth asking for when the deposit solves a real funding problem and spending it will not leave the seller unable to clear the mortgage at settlement.

Take a $500,000 sale with a $50,000 deposit and a $490,000 mortgage payout. Once the deposit is released, only $450,000 of the price remains to arrive at settlement. If the seller spends the deposit, they are $40,000 short of the mortgage payout.

That request has not created extra money. It has moved money needed for settlement into the seller’s hands early.

The opposite case is simpler. On a $900,000 sale with a $90,000 deposit and a $500,000 payout, the remaining $810,000 still covers the mortgage. Release is useful if the $90,000 is needed for the next purchase, subject to the contract and all other amounts due.

Seller-side advice must still be based on the actual contract and current lender figures. A general example cannot price the risk in a particular sale.

The statement needs more than a mortgage balance

Where there is a mortgage, the disclosed details cover the amount secured, current interest rate, repayment arrangements, whether the seller is in default, the amount required to discharge the mortgage at the statement date, and the lender’s name and address. Details of any caveat must also be included.

The payout figure is date-specific. If a lender states that $490,000 is required on 1 September, interest may change the amount by settlement. A narrow margin deserves more attention than a comfortable one.

The realistic timetable therefore includes obtaining the information, preparing and serving the statement, and then allowing the buyer’s 28 days. The buyer can approve earlier, but the seller cannot plan on that outcome.

Knowingly or recklessly supplying false information is an offence with a maximum of 50 penalty units, equal to $10,455 in the 2026–27 financial year under Victoria’s current penalty-unit value. The buyer is also entitled to cancel the contract and recover the deposit. The fine is a maximum, not an expected result.

Section 27 is changing, but it remains law today

The Consumer Legislation Amendment Bill 2026 passed both Houses of the Victorian Parliament in August 2026. As at 1 September 2026, it was awaiting Royal Assent and had not taken effect.

The deposit changes will take effect on a date to be proclaimed, or on 1 July 2027 at the latest. Until then, Section 27 remains the current route for early release.

Once the change takes effect, Section 27 will be repealed. Early release will instead require a term in the contract, agreed by the buyer and seller, that permits the deposit to be released before settlement. The current system, where 28 days of silence can authorise release after disclosure, has no equivalent in the replacement section.

The Bill does not include a specific rule explaining how these deposit changes apply to contracts signed before the change takes effect. The answer for an existing contract is unresolved on this evidence.

The agent’s access to commission will also change

Under the current law, an estate agent may retain commission, auction expenses and certain other amounts from a deposit released before settlement. That explains why the seller may receive less than the full deposit.

The replacement rule stops the agent taking those amounts out of the deposit before settlement or cancellation. It does not prevent the seller from paying the agent separately from the seller’s own money.

For example, if a $60,000 deposit is released and the commission is $15,000, the new rule prevents the agent subtracting that $15,000 from the deposit. The seller could still pay the same commission early from another account.

That distinction matters. The change protects the source of the released money; it does not impose a general ban on paying an agent before settlement.

What each side should do next

Buyers should send the statement to whoever is handling their buyer conveyancing as soon as it arrives. Do not wait for the 28th day to ask whether the details are accurate or whether an objection is available.

Sellers should give their seller conveyancer the current loan information and decide whether the deposit will genuinely improve their position. If the payout arithmetic creates a shortfall, the sensible answer may be not to ask.

We are licensed conveyancers, not solicitors. Where a dispute, cancellation right or unresolved change in the law requires advice beyond conveyancing, legal advice is needed. If you are still deciding whether to sign a contract, a free 24-hour Section 32 review can identify the contract terms before they become fixed.

The sections this article refers to

Section	What it does
Section 24	Requires a deposit received by a conveyancer, legal practitioner or estate agent to be held as stakeholder.
Section 26	Gives a buyer an entitlement to the immediate return of the deposit after cancelling for the seller’s default.
Section 27(1)	Allows the buyer to authorise release of the deposit in writing.
Section 27(2)	Requires buyer-protecting conditions to be resolved and title to be accepted.
Section 27(3) and Schedule 1	Set out the mortgage and caveat details the seller must disclose.
Section 27(4)	Applies the accuracy and mortgage-payout tests and gives the buyer 28 days.
Section 27(5)	Treats the buyer’s written satisfaction notice as authority to release.
Section 27(6)	Requires an objection to be written, timely and supported by reasons.
Section 27(7)	Treats 28 days of silence as satisfaction and authority to release.
Section 27(8)	Covers false information, the maximum penalty and the buyer’s cancellation right.
Section 27(9)	Allows an agent to retain commission and specified expenses from a released deposit.
Sections 26A and 26B	Passed but not yet in force. They introduce contract-based release and restrict deductions from the deposit.