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LPLC regularly receives questions from practitioners about the release of deposits pursuant to section 27 of the Sale of Land Act 1962 (Vic). They are usually acting for the vendor and are frustrated that the purchaser has objected to the release or refused to sign the section 27 statement.

Some objections are purely on the basis that the contract contains conditions enuring for the benefit of the purchaser and therefore the deposit cannot be released pursuant to section 27. It is often argued that general condition 24.2, which requires the vendor to deliver the property to the purchaser in the same state as at the day of sale, is a condition that enures for the benefit of the purchaser. The difficulty is that ‘enuring for the benefit of the purchaser’ is not defined in the legislation.

Where a purchaser objects to releasing a deposit and the vendor wants the deposit released, their only option is to take court action as it is an offence to release the deposit prior to settlement other than in accordance with section 27. If the vendor is determined to seek a court order, practitioners need to give careful consideration and then advice to the vendor about the cost and timing consequences of doing so.