Purchase Deposits & Trust Accounts

You may have just purchased a property and wondering what happens next?

Please find below our brief description, general in nature – naturally, which may assist in your understanding of the process,

Whilst the settlement of a property can vary, depending on what’s agreed between the buyer and seller, generally, we find most settlements within metropolitan South Australia are for 30 days.

Before a property can settle there may also be conditions that need to be met for example;

• Building inspection
• Finance approval
• Sale or settlement of a property
• Probate

This being said, a contract is drawn up for both the buyer and seller to execute which outlines all particulars which include but isn’t limited to:

• Purchase amount
• Settlement date
• Buyer and Sellers details
• A description of the property (address)
• Inclusions and exclusions
• Any conditions to the contract; plus
• The deposit amount

Once the contract is executed, complete Form 1 documentation has been provided to the buyer and the cooling-off period has been completed then the deposit is due and payable into the agent’s trust account.

When the agency processes the deposit they’ll provide to yourself a trust deposit receipt.

If the contract is conditional and the conditions are not met then the deposit would be refundable,

Note that the funds are held in trust, therefore it isn’t as simple as just refunding the deposit amount.

Firstly both parties (the purchaser and seller) must ensure the contract is terminated correctly.

Secondly, consent from both parties is also required to be able to withdraw the funds and return them.

If the contract is not conditional or was conditional but all conditions have been met and the buyer does not complete the sale then the likeliness of the deposit being refunded would be minimal, in addition to the seller being able to potentially claim damages.

For buyers, we recommend making sure you work towards completing all conditions using your best endeavours and by the agreed dates as set out in the contract,

If at any point, for both buyers and sellers of properties, there are disputes we recommend liaising directly with your nominated conveyancer.

If you have any questions we’d love to hear from you,