Objections To Early Release of Home Deposit

When purchasing property in Victoria, understanding your rights regarding the early release of deposit funds under Section 27 of the Sale of Land Act is crucial. As a buyer, you have specific grounds for objecting to an early deposit release request. This comprehensive guide will help you understand when and how you can object to protect your interests.

What is Section 27?

Section 27 of the Sale of Land Act allows vendors (sellers) to request the early release of the deposit before settlement. However, this isn't automatic - buyers have specific rights and protections, including the ability to object under certain circumstances.

Valid Grounds for Objection

Based on recent case law and statutory requirements, here are the key grounds on which a purchaser can object to an early deposit release:

1. Mortgage-Related Objections

• Inadequate evidence of mortgage terms
• Cases where the mortgage permits further advances
• "All moneys" mortgages without clear limitations
• Insufficient sale price to discharge all mortgages
• Potential interest accumulation if settlement occurs after loan repayment date
• Lack of independent review of security terms

2. Financial Concerns

According to McEwen v Theologedis [2004] VSC 244, buyers can object if:

• The purchase price appears insufficient to discharge all mortgages
• There are concerns about unpaid rates and land tax (which fall within the extended definition of mortgage under s27(10))
• Additional interest might accumulate, affecting the final payment required

3. Documentation Issues

Valid objections can arise when:

• The vendor's statement lacks complete information about mortgages or caveats
• There are discrepancies in the provided particulars
• The statement doesn't address all registered encumbrances

The Objection Process

When objecting to a Section 27 statement, remember:

1. You have 28 days from receiving the vendor's statement to object
2. Objections must be in writing
3. You must provide specific reasons for the objection
4. Focus objections on matters outlined in s27(4)

Important Case Law Insights

GLP Batesford Case

This significant case established that:

• Purchasers aren't required to act "reasonably" when objecting
• The 28-day response period is mandatory
• Special conditions attempting to shorten this timeframe are void

McEwen v Theologedis

This case confirmed that:

• Purchasers don't need to prove their objections are reasonable
• The test is subjective - it's about whether the purchaser "is satisfied," not whether they "should be satisfied"
• Objections must relate to the matters in s27(4)

What You Can't Object To

Not all concerns constitute valid grounds for objection. The following are generally not valid grounds:

• General contract conditions
• Pending property inspections
• Potential nominations
• General dissatisfaction with the property

Protecting Your Rights

To protect your interests:

1. Review the Section 27 statement carefully
2. Seek professional legal advice before responding
3. Keep track of the 28 day response period
4. Document all communications regarding the deposit release
5. Ensure objections are specific and relate to permitted grounds

The Importance of Professional Guidance

Given the complexity of Section 27 requirements and the significant financial implications, seeking professional legal advice is crucial. A qualified conveyancer or property lawyer can help ensure your objections are valid and properly documented.

Need Expert Advice?

For a comprehensive review of your Section 27 statement and professional guidance on your rights regarding deposit release, contact Pearson Chambers Conveyancing:

Phone: 03 9969 2405

Email: contact@pearsonchambers.com.au

Our experienced team offers free Section 32 contract reviews and can help protect your interests throughout the property purchase process.