Buyer’s Finance Termination Notice: A Seller’s Checklist

An email headed ‘finance declined’ has arrived, asking you to return the buyer’s deposit on your Victorian home. Before replying, place the message, every attachment and the signed contract side by side.

The short answer: A buyer’s ability to end the sale for finance reasons depends on the finance condition in the signed contract and whether its requirements have been met. The notice, supporting material and any agreed changes need to be reviewed together. A missing detail may call for focused clarification, but the seller’s preference to keep the sale alive does not decide the buyer’s contractual rights.

Start with the finance condition that actually applies

Read the complete signed contract, including the particulars, general conditions, special conditions and any written changes agreed after signing. The particulars contain transaction details such as the parties, loan information and dates, while special conditions contain terms added for that sale.

There is no single prescribed form of Victorian contract of sale, so a clause number, deadline or evidence requirement from another transaction may not match yours.

Identify the finance condition the buyer says they are relying on. Check any lender, loan amount or approval date recorded in the contract only where those details form part of your condition. If the parties later agreed to change a finance date or another relevant term, include that written record in the review.

Then read the buyer’s message for what it actually claims to do. Is it communicating termination, asking you to agree to end the contract, or asking for more time? Those are different positions. If the wording is unclear, that is a specific point for your representative to clarify rather than something to infer from an email subject line.

Separate the termination notice from the supporting evidence

The notice communicates the buyer’s claimed decision to end the contract. Supporting evidence addresses the finance outcome relied on. One document does not necessarily perform both jobs.

Some finance conditions require evidence of rejection or non approval of a loan application. That does not mean every Victorian finance clause requires a bank letter, or that a particular broker email is always sufficient or insufficient. The signed wording controls the comparison.

A short review table can keep the received material focused:

Check	What to record
Contract connection	Does the material identify the buyer and the loan application said to relate to this purchase?
Loan details	If the condition specifies a lender or amount, can the evidence be matched to those details?
Finance outcome	Does the document describe rejection, non approval, a pending application or something else? Keep the exact wording.
Relevant dates	Record the finance approval date in the contract, any agreed change, the date on the evidence and when the notice was received.
Evidence requirement	What does the actual condition require, and which attachment is said to meet it?

These are comparison questions, not new conditions a seller can impose after signing. An apparent mismatch should be identified and assessed against the contract rather than treated as automatic proof that the termination is ineffective.

Preserve the complete message and delivery information

Send the original email and every attachment to your conveyancer promptly. Keep the sender, recipient, date and time visible, together with earlier correspondence that records any agreed change to the finance condition.

Do not rely on a forwarded extract saying ‘the bank said no’ if the original notice or attachments are missing. The finance approval date, any deadline for exercising the condition and the way the notice was delivered are separate matters that may need to be checked under the actual contract. Our guide to service of notices under a Victorian contract of sale explains the separate delivery issue.

The date you personally opened an email should not be substituted for a review of when and how the notice was received for contractual purposes.

Ask for the precise missing fact

If the material leaves a genuine gap, ask your conveyancer to identify exactly what is missing and why it matters under the signed condition. That gives the buyer’s representative a focused point to address without turning the response into a demand for the buyer’s whole finance file.

Suppose the buyer sends a cancellation email with an attachment stating that the application is ‘under assessment’. The attachment does not, on its face, explain a claimed rejection. Whether the notice and evidence satisfy a condition referring to non approval still depends on the wording of that condition and the circumstances.

A focused clarification might ask which application an attachment concerns or request a document expressly referred to in the notice but not provided. Do not assume a later document automatically cures an earlier problem.

The useful outcome is a documented seller position: what was received, what requirement was checked, what remains unresolved and what that means under the contract after review.

Match deposit instructions to the reviewed position

The deposit question follows the contractual position. If the buyer validly terminates under a finance condition that provides for the deposit to be refunded, the deposit must be dealt with in line with that entitlement. Finance not proceeding is not, by itself, a reason for the seller to keep the money.

Identify who is holding the deposit and make sure any instruction to release or retain it reflects the reviewed position. Where an estate agent holds the deposit, it is commonly held in the agent’s trust account pending the proper payment outcome.

If entitlement to the deposit remains disputed, obtain legal advice before giving payment or retention instructions. A request for clarification should not be used to delay a refund that is properly due. Your conveyancer can explain the sale document issues and identify when a dispute needs a legal practitioner.

About the Pearson Chambers Conveyancing team

Pearson Chambers Conveyancing provides Melbourne and Victorian residential purchase, sale and title transfer conveyancing services. Our sale work includes preparing contracts and Section 32 statements and managing the conveyancing steps through settlement.

Sources we consulted

Get help reviewing your sale documents

If you have received a finance termination notice, contact Pearson Chambers Conveyancing promptly about the contract, supporting documents, deposit position and next steps. We can also help prepare your contract and Section 32 and manage your sale conveyancing through settlement.

Email contact@pearsonchambers.com.au.

General information only, current as at the date of publication. Victorian conveyancing rules and legislation change frequently. Please contact the Pearson Chambers Conveyancing team for advice on your specific contract.