Changes for Deposit Releases and Vendor Statements: What Victorian developers need to know

The Consumer Legislation Amendment Bill 2026 (Vic) proposes significant changes to the Sale of Land Act 1962 (Vic) that will affect the way Victorian developers prepare for, market and contract the sale of land.

For developers, two reforms are particularly important:

• replacement of the existing section 27 deposit release process with a commercial contractual early-release regime; and
• requiring section 32 vendor statements to be available earlier in the sales process and kept up to date before a purchaser signs.

The Bill has passed both Houses of the Victorian Parliament. The Sale of Land Act amendments will commence on a day to be proclaimed or, if not proclaimed earlier, on 1 June 2027.

A new approach to early release of deposits

Early release of purchaser deposits can be commercially important to developers, particularly across projects involving a large volume of sales.

At present, section 27 of the Sale of Land Act 1962 provides a statutory process by which a vendor may seek the early release of a deposit. The Bill repeals section 27 and replaces it with a new section 26A.

Under the new regime, where a legal practitioner, conveyancer or estate agent holds the deposit as stakeholder, the deposit cannot be released to the vendor, or as the vendor directs, before settlement unless the contract itself includes an agreed condition providing for early release.

The practical significance for developers is that early release will no longer depend upon completing the existing section 27 procedure after the contract is signed. Instead, the contractual entitlement to early release will need to form part of the bargain between the developer and purchaser from the outset.

This makes the drafting of the developer’s standard contract particularly important. If early access to deposits is part of a project’s commercial or funding strategy, the contract suite should expressly and appropriately provide for it. All developers should urgently commence their review of standard forms of contract and special conditions to design a process which suits their commercial requirements.

It should be noted though the proposed changes do not alter the current position in relation to deposits paid under an “off-the-plan” contract. That is, section 9AA of the Sale of Land Act 1962 still requires the deposit to be held by the legal practitioner, conveyancer or licensed estate agent until registration of the plan of subdivision. However, once the plan is registered, the contract of sale can then provide for the deposit to be released to the vendor before settlement.

What does this mean for project funding?

The reform may simplify the mechanics of early release, but it also moves the issue squarely into contract negotiation.

A purchaser is not required by the new section 26A simply to accept early release. The contract must contain a condition agreed by the purchaser and vendor. Developers should therefore consider whether early release is commercially important to a project before contracts are issued and how the relevant condition will be dealt with if purchasers seek amendments.

Developers and financiers should also revisit any feasibility or cash-flow assumptions that depend upon deposits being available before settlement. The new regime may alter the timing, certainty and negotiation risk associated with accessing those funds.

It may also impact the relationship for a financier and mortgagees as to requirements as part of any lending facility.

Estate agent commission and other amounts

The Bill also inserts a new section 26B dealing with estate agents. As introduced, it prevents an estate agent from retaining commission, auction expenses or other amounts from deposit moneys released under section 26A before settlement or rescission.

The Council amendments clarify that this does not prevent the vendor separately paying the agent its commission, auction expenses or other entitlement before settlement. The important distinction is that those amounts cannot be retained by the agent out of the released deposit itself.

Developers should check that their agency agreements and project cash-flow arrangements reflect this distinction.

Vendor statements: the final Bill is more nuanced than a blanket 14-day rule

The section 32 reforms are also significant, but the position after the Legislative Council amendments differs from the Bill as originally introduced.

The original Bill proposed, broadly, that a section 32 statement be made available at least 14 days before an auction or fixed-date sale and, in other cases, at least 14 days before the contract was signed.

The Council amendments alter that position for publicly advertised private sales. Under the Bill as amended, the relevant ‘sale availability time’ will depend on how the property is being sold.

• Publicly advertised private sale: the section 32 statement must be available from the day that is 14 days after the land is first publicly advertised for sale.
• Auction or fixed-date sale: the section 32 statement must be available from 14 days before the first auction date or first fixed date.
• Land not publicly advertised: the section 32 statement must be available before the purchaser signs the contract.
• Early sale during an advertised campaign: if the land is to be sold within 14 days after it is first publicly advertised, or more than 14 days before the first auction or fixed date, the section 32 statement must be available before the purchaser signs.

This is an important qualification for developers. The amended provisions do not impose a universal requirement that every private-sale section 32 statement be available for 14 days before a purchaser can sign.

However, they do move disclosure earlier into the marketing process and require developers to have their disclosure material organised around the way in which each release is being marketed.

What does ‘make available’ mean?

The Bill defines ‘make available’ as making the section 32 statement available, in electronic or hard-copy form, on request by any prospective purchaser.

This shifts the focus away from providing the statement only to the eventual purchaser immediately before signing. Once the relevant sale availability time is reached, the developer must be in a position to provide the statement to prospective purchasers who request it.

Real estate agents also need to consider their timing for requesting materials as part of any marketing campaign.

Changes to a vendor statement must be notified before signing

A further change is especially relevant to development projects, where the information disclosed during a sales campaign may evolve.

New section 32(3) requires the vendor to give the purchaser written notice of any changes to the section 32 statement made available to that purchaser before the purchaser signs the contract.

For developers, this creates an additional document-control issue. It will not be enough to prepare a vendor statement at the beginning of a campaign and assume it remains suitable throughout the release. Changes occurring between initial disclosure and contract signing will need to be identified and communicated in writing.

This may be particularly relevant where planning, title, owners corporation, subdivision, services or other project information changes while lots remain on the market.

While a statement of changes is not unusual in our areas of practice, it is now brought into the regime for sale of land and marketing campaigns, which increases the level of diligence required.

Consequences of non-compliance remain significant

The reforms also amend the existing rescission and offence provisions to reflect the new timing requirements. A failure to make a section 32 statement available from the applicable sale availability time may give a purchaser a statutory basis to rescind in the circumstances provided by section 32K.

The offence provisions are also amended so that a vendor must not knowingly or recklessly fail to make the statement available from the required time. The existing maximum penalties remain significant, including 300 penalty units for a body corporate.

For developers conducting high-volume sales programs, compliance therefore needs to be systematic rather than dealt with transaction by transaction.

A 28-day transition for the section 32 changes

The Bill contains a specific transitional provision for the section 32 reforms. The amended section 32 regime will not apply to contracts entered into within 28 days after the commencement day; the existing provisions will continue to apply to those contracts.

That transition is useful, but developers with active campaigns around commencement will need to identify which regime applies to each contract and ensure their sales teams and agents are working from the correct process.

What should developers do now?

• Review contract precedents: Developers intending to obtain early release of deposits should ensure their standard contracts contain an appropriate section 26A condition.
• Review funding assumptions: Consider whether project cash flow or financing assumes access to purchaser deposits before settlement and whether purchaser negotiation of the release condition affects that assumption.
• Map section 32 preparation to the sales method: The timing differs between publicly advertised private sales, auctions, fixed-date sales and unadvertised transactions. Sales and legal teams should agree the intended sales method before launch.
• Introduce vendor statement version control: Processes should identify changes to disclosure information after a statement has been made available and ensure affected purchasers receive written notice before signing.
• Review agency arrangements: Agency agreements and payment practices should recognise that an agent cannot retain its commission or other entitlement from the released deposit before settlement, although the vendor may separately pay those amounts.
• Plan for commencement: Projects expected to be selling around the commencement date should be reviewed in advance, including the 28-day transition applying to the section 32 amendments.

The key issue for developers: sales documentation becomes part of project planning

These reforms are more than conveyancing changes.

The new deposit regime makes early release a matter that must be addressed expressly in the contract. The section 32 reforms require disclosure documentation to be prepared and managed by reference to the timing and method of the sales campaign, with an ongoing obligation to notify purchasers of changes before they sign.

For developers, the practical response is to bring legal preparation further forward and integrate contract and disclosure management into the project’s sales and funding strategy.

Developers with projects that will remain on the market into 2027 should review their contract suites, deposit arrangements and section 32 processes before the new regime commences.

Best Hooper’s Development Advisory and Property Teams can assist developers to review project contracts, deposit release provisions and sales disclosure processes in preparation for the new regime.

This article provides general information only and does not constitute legal advice. Specific advice should be obtained in relation to individual projects and transactions.