Yes, a Vendor can have the deposit released to them before settlement, however the contract must be unconditional, and the deposit paid by the Purchaser.
Additionally, the Vendor must be satisfied that there is not more than 80% of the sale price in debt against the property. This would include what is owing on their mortgage, council rates, an amount to discharge a caveat registered on title, etc.
The Vendor would also need to ensure they are up to date with their mortgage payments, ie. not be in default of them.
If this is all in order, then we, as your Conveyancers would prepare the required Statement (called a ‘Section 27 Statement’) and send this to the Purchaser, along with a letter from the Vendor’s bank, confirming the mortgage is in order.
If the Vendor has an unencumbered title, it is a far less complicated process to get a release of the deposit.
The Vendor should also note that once the Section 27 Statement is served on the Purchaser, there is a 28 day waiting period in which the Purchaser may agree to releasing the deposit, object to the releasing the deposit (an objection can only be made on certain grounds) or do nothing. If the Purchaser does not sign the Section 27 Statement or objects to releasing the deposit, then 28 clear days must elapse before the deposit can be released.
If the Purchaser signs the Section 27 Statement, the deposit may be released to the Vendor, however they should note that their Agent is entitled to take their commission and marketing expenses before the deposit is released.
