Buyer protections update: Sale of Land Act reforms

The Consumer Legislation Amendment Bill 2026 (Vic) proposes significant reforms to the Sale of Land Act 1962 (Vic) (Act), particularly affecting deposit handling and vendor disclosure. 

The Bill passed second reading on 4 June 2026 and is currently before Parliament for debate. If enacted, these changes will materially affect conveyancing practice in Victoria. 

Early release of deposit abolished 

The Bill repeals section 27 of the Act, which currently governs early release of deposit monies. 

It will be replaced with new section 26A, which provides that a deposit must not be released to the vendor (or as the vendor directs) prior to settlement unless the contract contains an express condition permitting early release. 

Importantly, the reforms remove the existing statutory framework governing early release. Instead: 

• any early release of the deposit will depend entirely on express contractual agreement between the parties; and 

• a new section 26B will prohibit estate agents from deducting or retaining any part of the deposit for commission or expenses prior to settlement or rescission, even where early release is contractually permitted. 

If passed, the reforms will have several key consequences: 

• Purchasers must carefully review and negotiate any special conditions allowing early release before signing the contract and should obtain legal advice. 

• Vendors can no longer assume access to deposit funds prior to settlement. Early release will depend on negotiated terms, which may affect funding arrangements for onward purchases. 

• Vendors should also review their agency agreements. While agents are prohibited from drawing commission from the deposit before settlement, vendors may still be required to fund these amounts separately. 

Additional vendor disclosure obligations 

The Bill introduces additional obligations in relation to section 32 vendor statements. Vendors will be required to: 

• provide the section 32 statement to prospective purchasers, in electronic or hard copy, upon request; 

• make the section 32 statement available at least 14 days before:  

• an auction or fixed date sale, or 

• a contract is signed. 

From a practical perspective, vendors should determine key sale dates (such as auction or closing dates) as early as possible and communicate these promptly to their legal practitioners, to ensure the contract of sale and section 32 statement are prepared and made available within the prescribed statutory timeframes. 

If you have any queries regarding your property sale or purchase, please contact our Commercial Property & Development team. 

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