Questions and answers for the Real Estate agent

Do I have to accept a Deposit Guarantee?
Do I need to amend the Contract of Sale if a Deposit Power Guarantee is used?
Can the Guarantee be used at Auctions?
What happens if the purchaser defaults under the Contract of Sale?
When does the Guarantee terminate?
How do I arrange a Deposit Power Guarantee for a purchaser?
What do I do if the vendor, purchaser or I need more information?


Do I have to accept a Deposit Guarantee?

The only person who has the authority to accept or deny a request for a purchaser to use a Deposit Power Guarantee is the vendor. The vendor has sole discretion to use the Guarantee.
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Do I need to amend the Contract of Sale if a Deposit Power Guarantee is used?

A Suggested Special Condition is included on the reverse of the Deposit Power Guarantee Certificate. This should be annexed to the Standard Contract of Sale when a Guarantee is being used (not required with standard NSW Contract of Sale of Land). This suggested condition enables the Guarantee to be substituted for the cash deposit and requires the purchaser to pay the full purchase price including the deposit represented by the Guarantee at settlement.
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Can the Guarantee be used at Auctions?

Yes. The Guarantee can be very useful for purchasers wanting to bid at an auction as it can be difficult for them to organise a cash deposit beforehand, particularly when they are not sure if their bid will be successful.

The Guarantee can be issued prior to the auction so you can gain the vendor’s acceptance of a Deposit Power Guarantee beforehand. The vendor and property details on the Guarantee Certificate will be left blank and the purchaser is authorised to complete these details if they are the successful bidder.

The Suggested Special Condition on the reverse of the Guarantee Certificate should be inserted into the contract when signed on the day of the auction.
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What happens if the purchaser defaults under the Contract of Sale?

If the purchaser defaults under the Contract of Sale and the vendor is entitled to retain the deposit, the vendor can claim the Guarantee amount from Vero Insurance Limited. This amount will be paid to the stakeholder nominated in the contract within two clear days of Vero Insurance Limited being provided with the necessary documents (detailed on the Guarantee Certificate).
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When does the Guarantee terminate?

The Deposit Guarantee ceases when the Contract of Sale is completed, terminated, rescinded or the expiry date occurs, whichever happens first. If the contract is forfeited by the purchaser, the Guarantee terminates when the claim is paid by the Guarantor.
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How do I arrange a Deposit Power Guarantee for a purchaser?

The simplicity of using a Guarantee is one of its main attractions. Applications, which include an indemnity, can be completed and faxed directly to Vero Insurance Limited and the Guarantee will normally be issued within 24 hours.
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What do I do if the vendor, purchaser or I need more information?

Should you, or any of your clients, have any questions about the Guarantee or the application process, our helpline is available on 1800 115 222..
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