Q 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 Deposit Power Guarantee.
Q Do I need to amend the Contract of Sale if a Deposit Power Guarantee is used?
A 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 Deposit Power Guarantee is being used (not required with standard NSW Contract of Sale of Land). This suggested condition enables the Deposit Power Guarantee to be substituted for the cash deposit and requires the purchaser to pay the full purchase price including the deposit represented by the Deposit Power Guarantee at settlement.
Q Can the Deposit Guarantee be used at Auctions?
A Yes. The Deposit Power 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 Deposit Power 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 Deposit Power 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 Deposit Power Guarantee Certificate should be inserted into the contract when signed on the day of the auction.
Q What happens if the purchaser defaults under the Contract of Sale?
A If the purchaser defaults under the Contract of Sale and the vendor is entitled to retain the deposit, the vendor can claim the Deposit Power 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 Deposit Power Guarantee Certificate).
Q When does the Deposit Power Guarantee terminate?
A The Deposit Power Guarantee ceases when the Contract of Sale is completed, terminated or rescinded or when the expiry date on the Deposit Power Guarantee occurs, whichever happens first. The Deposit Power Guarantee also terminates when a claim is paid by Vero, the guarantor.
Q How do I arrange a Deposit Power Guarantee for a purchaser?
A The simplicity of using a Deposit Power Guarantee is one of its main attractions. Applications, which include an indemnity, can be downloaded completed and faxed directly to Vero Insurance Limited and the Deposit Power Guarantee will normally be issued within 24 hours.
Q What do I do if the vendor, purchaser or I need more information?
A Should you, or any of your clients, have any questions about the Deposit Power Guarantee or the application process, our helpline is available on 1800 678 979 Monday to Friday 8.30am to 7.00pm (AEST) excluding public holidays.