The deposit is part payment of the purchase price and provides security if the purchaser defaults. The amount and payment date are recorded in the particulars of sale. The parties can agree to a different amount or payment arrangement, subject to applicable law and the contract.
When an agent receives a deposit, statutory trust-account rules govern how it is received and held. A solicitor or conveyancer holding the deposit must also comply with the applicable trust-account obligations. A stakeholder does not hold the money for the vendor alone and should not release it merely because one party requests payment. Release may occur at settlement or earlier if the contract and any applicable statutory process permit it.
The parties may agree that a cash deposit will be invested and that interest will be dealt with in a particular way. That can create tax, administration and accounting considerations. A deposit bond or bank guarantee is not cash in the stakeholder's account, so the settlement adjustment and any claim under the instrument must be addressed separately.
CMK Legal's property and conveyancing team can help with this.
Confirm the amount, due date, account holder and whether the deposit is cash or a bond. If early release is proposed, consider the statutory requirements and the risk that recovery may be difficult if the vendor later defaults.
Law referenced: Sale of Land Act 1962 (Vic); applicable trust-account legislation and rules; contract of sale deposit conditions.