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The section 27 statement is an instrument allowed by legislation for the seller to access their deposit prior to settlement if they are able to satisfy certain criteria. This statement is drafted by the seller’s conveyancer and served on the buyer’s conveyancer. If the buyer does not have reasonable grounds to object to the release, they can either sign for the release, or the notice will take effect 28 days after service. One of the main conditions of the section 27 is that the seller must provide proof that the mortgage they hold over the property is not more than 80% of the purchase price and that there is no caveats lodged against the property’s title. The mortgage details provided by the seller must also be supported by a section 27 information statement from their mortgagee.
If you have been provided with a section 27 statement and information by the agent, it is important that you bring it to the attention of your conveyancing lawyer for review before you sign it. Otherwise, if the deposit is released and the seller is otherwise unable to complete settlement, then you will have no avenue but to commence litigation against the seller to recover your deposit which could be a timely and costly exercise.
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