fbpx

Settlement Delays: Know your rights

Buying and or selling property can be a very stressful time. Our article “What is a conveyance?” outlines what is involved in the process. When we enter these contracts, we all hope that everything will go smoothly, but there are several moving parts to pull together to make any property settlement occur and sometimes, they don’t all come together at the right time. This is where extensions to the settlement period is required to ensure settlement occurs.

In Queensland, requesting extensions to a settlement date is risky and should be avoided unless necessary. However, property settlement delays can occur for a range of different reasons. Some of those we list below.

  • Late requests to change cheque or funds disbursement directions.
  • The seller’s bank may not be ready to release the mortgage in time for settlement.
  • Sellers do not have enough funds to pay out their existing loans.
  • Documents necessary for settlement have not been completed or have not been provided to the bank or their solicitors in time.
  • The tenant has not moved out of the house – the property may not be ready for vacant possession.
  • If it is a PEXA settlement, either party is not ready.
  • The incoming mortgagee does not have funds ready for settlement.
  • A caveat has been placed on the property to prevent settlement.
  • A seller has unexpectedly passed away prior to settlement.
  • Delays in obtaining financial approval.
  • The seller has not completed the works they were to undertake prior to the property settlement.
  • Pre-settlement inspection – identifies issues delaying the settlement and causes delays.
  • Difficulty selling the alternate property where the purchase contract is dependent on the funds obtained from the sale of the current property.

In Queensland, the Settlement Date is an essential term of the contract, and time is of the essence. What this means is you must be in a position to settle. If you are not, then this will give the other party, among other things, the right to terminate the contract, potentially retain the deposit or sue for any damages or losses incurred. There is no obligation on a party to agree to an extension of the settlement request.

So, if you are selling your property and the purchaser of your property cannot settle on the settlement day and they request an extension, your options are;

1. You can choose to refuse the extension request. Call for settlement to take place by advising the buyer that you are ready, willing and able to settle and if the buyer does not tender for settlement, then at 5.01 pm on the settlement day, terminate the contract and retain the deposit and you will have the right to sue for damages.

For example, you may then resell your house and it sells for a lower price, you have suffered damages and the difference in the price of the two contracts is damage you have suffered.

2. You can agree to the extension of time for the settlement request. You will have the right to charge interest pursuant to the contract each day the settlement is delayed.

How to assist in avoiding settlement delays

Whether you are a home buyer or a seller, you must be organised and be prepared for the settlement. Your bank must be prepared. It is important that you pay attention to the paperwork that MCG Legal will provide to you as it will outline everything, we and you need to do in a timely fashion to make sure settlement occurs on time and there are no delays.

About Us

We are an experienced law firm in Gold Coast providing you with the best legal advice in the areas of Family Law, Conveyancing, Personal Injury, Commercial Law, Estate Planning and Traffic Law. Get in touch with us for a free initial consultation

[class^="wpforms-"]
[class^="wpforms-"]
[class^="wpforms-"]
[class^="wpforms-"]