If you're not ready for settlement on the agreed settlement date, don't panic, but it's important to act quickly!
In NSW, if you're buying a property and aren't ready to settle on the scheduled date, there can be financial and legal consequences depending on your contract and the reason for the delay.
Here's what you need to know:
1. You may be able to request an extension
Your conveyancer or solicitor can contact the vendor's representative to request an extension of the settlement date. However, the vendor does not automatically have to agree.
2. You could be charged penalty interest
If settlement is delayed due to the purchaser not being ready, the contract may allow the vendor to charge penalty interest for each day settlement is delayed.
3. You may be in default
If you fail to settle on the agreed date, you could potentially be in default under the contract. This can have more serious consequences if the delay continues.
4. You could risk losing your deposit
If the situation escalates and the contract is validly terminated due to your default, you may risk losing your deposit and could potentially face further financial claims.
5. What should you do?
Contact your conveyancer or solicitor as soon as you become aware there may be a delay. They can communicate with the other party, negotiate an extension and explain your options.
The important thing to remember: Missing your settlement date does not necessarily mean your contract is automatically cancelled. The consequences will depend on the contract conditions and whether a valid Notice to Complete is issued.
How do you avoid this?
The best way to avoid a delayed settlement is to get organised early and stay in regular contact with your conveyancer, broker and bank!
Here are 6 ways to help ensure you're ready for settlement in NSW:
1. Get your finance organised early
Make sure your home loan is formally approved and your lender has everything they need well before settlement.
2. Respond to requests promptly
If your bank or conveyancer requests documents, identification or signatures, don't put them off. Even small delays can hold things up.
3. Make sure you have enough funds
Ensure you have enough money available to cover your deposit balance, stamp duty, legal fees and any other settlement adjustments.
4. Complete your pre-settlement inspection
Arrange your final inspection before settlement to check the property is in the agreed condition and that any agreed inclusions remain.
5. Sign your documents early
Make sure all required loan and transfer documents are signed and returned within the requested timeframes.
6. Stay in contact with your conveyancer
Keep your conveyancer updated and let them know immediately if something changes, particularly with finance or available funds.
A little tip: Don't wait until the week of settlement to check everything is ready. The earlier you identify a potential issue, the more time there is to resolve it.