A vendor may want the deposit released before settlement to fund another purchase or meet other commitments. Section 27 is intended to allow early release in defined circumstances, but it does not make release automatic. The vendor must provide the information required by the Act about mortgages and other charges affecting the land and the amounts secured. The statutory notice and objection process must be followed, and the secured debt position must satisfy the Act.
The expression "condition enuring for the benefit of the purchaser" is important. In *Aurumstone Pty Ltd v Yarra Bank Developments Pty Ltd* [2017] VSC 503, the Supreme Court of Victoria rejected the argument that section 27 is confined to contingent conditions such as finance approval. The Court held that the expression can include an essential contractual term that benefits the purchaser. The case does not establish that every obligation remaining to be performed before settlement prevents release. The nature and legal character of the relevant term must be considered in context.
Early release can expose a purchaser to recovery risk if the vendor later defaults or becomes insolvent. Whether to object, and the grounds for doing so, should be assessed against the contract, the statutory requirements and the actual circumstances.
CMK Legal's property and conveyancing team can act on matters like this.
Do not assume the deposit can be released merely because finance has been approved or because settlement is expected to proceed. Equally, do not assume every outstanding contractual obligation automatically prevents release. Obtain advice before serving or responding to a section 27 notice.
Law referenced: Sale of Land Act 1962 (Vic) s 27; *Aurumstone Pty Ltd v Yarra Bank Developments Pty Ltd* [2017] VSC 503.