(The following is sourced from Consumer Affairs Victoria Property deposits for sellers.)
Property
deposit amount
There are no laws setting the amount of deposit for a property sale. The deposit is usually:
- 10
per cent of the purchase price - paid at the time the buyer makes an offer
The buyer may pay the full deposit or a part deposit, with the remainder paid by a date specified in the contract of sale.
If a property is under offer from a potential buyer this does not prohibit other potential buyers making an offer or viewing the property. A property remains on the market until both the vendor and purchaser agree and sign a contract of sale.
If the contract conditions are not met, then the deposit is refundable.
Where the property deposit is held
If an agent is managing the sale, the buyer will pay the deposit to that agent. The agent will hold the deposit in their trust account until the settlement date, or transfer it to a conveyancer's or legal practitioner's trust account.
If an agent is not managing the sale:
- the buyer will pay the deposit directly to you
- you must pay the deposit to your solicitor, legal practitioner or conveyancer, or bank it in a special purpose account in an authorised deposit-taking institution in Victoria. The account must be in both the buyer's and your name.
Early release of property deposit
The buyer may release the deposit money to you earlier than the settlement date. For this to happen, the:
-
contract must be unconditional
- buyer must be satisfied with your proof of debts information, usually provided as an attachment to the contract of sale. If you are requesting early release of the deposit you must provide evidence to the buyer's satisfaction that either:
- there are no debts secured against the property, or
- the total amount of debts secured against the property does not exceed 80
per cent of the property sale price.
The buyer cannot release the deposit until at least 28 days after the date the contract was signed.
Default on property deposit or contract of sale
If you are faced with a buyer who defaults on the contract of sale or the agreed deposit, you should seek independent legal advice.
