Goodbye Section 27: Are You Ready for the Changes?
/Goodbye Section 27
One of the biggest changes to Victorian property sales in decades is getting closer.
For decades, Victorian agents, vendors and conveyancers have worked with section 27 of the Sale of Land Act 1962 as the familiar mechanism for releasing a purchaser's deposit before settlement.
If the Consumer Legislation Amendment Bill 2026 proceeds in its current form, that familiar section 27 process is going.
But section 27 is only part of the story.
The same package of reforms proposes significant changes to when a Section 32 Vendor Statement must be ready and available, together with changes affecting what an estate agent can do with an early-released deposit.
First, goodbye Section 27
The Bill proposes to repeal section 27 of the Sale of Land Act 1962.
That means the familiar process of serving a section 27 statement after the contract has been signed, providing mortgage details and waiting for the purchaser's representative to consent or object, would disappear.
However, this does not mean a vendor will never be able to receive their deposit before settlement.
The proposed new section 26A allows the parties to agree to an early release of the deposit where the contract itself provides for it.
That is a fundamental change.
Instead of early release being something the vendor generally pursues after the sale using the statutory section 27 procedure, it will become something that needs to be considered when the contract is being prepared and negotiated.
Does the vendor need access to the deposit before settlement?
Are they relying upon it for another purchase?
Is early release important to their plans?
If it is, that issue should be raised with the vendor's conveyancer before the contract goes out, rather than after the SOLD sticker goes up.
The days of simply saying, "We'll do a section 27 after the contract is signed", are proposed to come to an end.
There is another important change for commission
The proposed legislation also restricts an estate agent from taking commission, auction expenses or other entitlements from an early-released deposit before settlement or rescission.
The Legislative Council amended the Bill to make one thing clear: this does not prevent the vendor paying the agent separately from the vendor's own funds before settlement.
What it prevents is the agent taking those amounts out of the purchaser's deposit simply because the deposit has been released early.
Section 32 is changing too
The proposed reforms also change the timing surrounding the Section 32 Vendor Statement.
This is potentially just as significant for agents as the loss of section 27.
Importantly, the 14-day private sale rule does not mean the vendor has to wait 14 days before selling.
If a buyer appears during those first 14 days and the vendor wants to accept the offer, the Section 32 simply needs to be available before the purchaser signs the contract.
So can you launch a listing without the Section 32?
Under the proposal as presently drafted, yes, for an ordinary advertised private sale.
But there is a catch.
Once the property has been advertised for 14 days, the Section 32 must be available to prospective purchasers on request.
And if somebody wants to buy before that 14-day point, you still cannot get the contract signed until the Section 32 is ready.
Monday: Property goes online.
Wednesday: Three groups inspect.
Thursday: One buyer offers exactly what the vendor wants.
Thursday afternoon: The agent calls the conveyancer and discovers searches are still outstanding and the Section 32 is not ready.
The buyer is ready.
The vendor is ready.
But the contract cannot safely be signed yet.
Section 32 will also become a living document
Where a Section 32 has been made available to a purchaser and something in it changes before that purchaser signs the contract, the vendor will be required to give the purchaser written notice of the change.
The proposed wording refers to "any changes", rather than only material or adverse changes.
That means everyone involved in the sale will need to be more conscious of keeping the Vendor Statement current between preparation and signing.
Agents and conveyancers will need good communication throughout the campaign, particularly where something changes involving planning, owners corporation information, notices, title information or other matters disclosed in the Section 32.
When is all this happening?
Not today.
The Bill has passed the Legislative Council with amendments, but those amendments are presently back before the Legislative Assembly for consideration.
It has therefore not yet completed the parliamentary process or received Royal Assent.
If the Bill proceeds in its current form, the section 27 provisions may commence earlier by proclamation but otherwise have a default commencement date of 1 July 2027.
The proposed Section 32 changes have a different commencement structure and may therefore begin earlier.
What should agents be doing now?
1. Start asking vendors whether they expect to need their deposit before settlement.
2. Encourage vendors to appoint their conveyancer early, particularly for auction and fixed-date campaigns.
3. Do not assume the Section 32 can always be sorted out after photography and advertising have started.
4. Make sure your sales team understands that deposit release, Section 32 preparation and campaign timing will become much more closely connected.
The preparation behind it is changing.
Section 27 has been part of Victorian conveyancing practice for a very long time.
If the Bill becomes law in its current form, we will be saying goodbye to it.
For agents, that does not make the deposit less important.
It makes getting the contract right before the property sells even more important.
Victorian Property Settlements will continue following these reforms through Parliament and will keep our referring agents informed as the final legislation and commencement dates become clear.
Call 03 9783 0111 Email David