Anxiety levels can be very high around the time for settlement of a property transfer. Delays can occur for many reasons and may even cost you money. Having an experienced conveyancer on your side will give you the best chance at a successful settlement.
Property transactions contain an inherent tension, as both parties have their own interest to preserve and sitting between them is a contract and a couple of banks. The seller might be buying another property at the same time, or the buyer might have to sell their property to buy this one. Whatever the surrounding circumstances, settlement is a natural time for these tensions to show up and a delay in settlement can be anything from inconvenient to catastrophic.
Bliss Conveyancing has many years of experience helping clients complete smooth transactions, and when there have been hiccups, they have mostly been one of these issues:
Payment delays – banks can often have internal processes that take additional time, and this can result in the funds required for the purchase to be unavailable at the scheduled time.
Documentation errors – just prior to settlement, all parties will be checking and re-checking the documents. If an error is discovered, it can cause delays from a few hours to a few weeks, depending on the severity of the error.
Stacked settlements – when you are selling one property to buy another and attempting to settle them at the same time, this multiplies the possibility of errors and delays and you must ensure that settlements occur in the correct order, or they may fail.
Final inspections – if the buyer is not satisfied with the final inspection, it can cause a delay or even a cancellation of the settlement. It is in the sellers’ interest to keep everything in working order and maintain the property in as close condition as possible to the first inspection.
Valuations – valuations can cause delays if the value of the property is given as less than the contract value. In these cases, discussions must be had quickly to determine if the purchaser can borrow additional funds, put in some more of their own cash or renegotiate the purchase price. In new estates, sometimes the land may not be available for access and so the valuer cannot even provide the valuation, until they are able to see the land.
Tenants – if the seller has not taken the appropriate actions to vacate the tenant, or if the tenant has just decided to disobey the direction to leave, there can be delays while the tenant is forcibly removed. In some instances, this can take months, so best to ensure that you have dealt with it properly well before settlement.
Destruction of the property – It’s rare, but sometimes occurs that the property is lost to a natural or other disaster. The contract will set out who takes the risk until settlement, so make sure you discuss with your conveyancer about whether you need to keep or acquire insurance until settlement.
The consequences of a delay can vary greatly subject to which party is at fault (if any), what state you are in, and whether you are using a standard contract or a modified contract. This table sets out the likely consequences of delay in each state, where the standard contract is being used.
|Delay By Vendor||Delay By Purchaser|
|Purchaser can give “Notice To Complete” and terminate if not settled in 14 days||Vendor can charge penalty interest and send “Notice To Complete”, and terminate if not settled in 14 days|
Note – this is a very high-level guide, you will always require appropriate advice from a qualified person on your exact rights and responsibilities under the contract you have signed.
Dealing With Delays
The occurrence of a delay does not have to result in nasty letters to each other and imposing financial penalties. These things are generally a last resort and an experienced conveyancer like Bliss Conveyancing can discuss matters with the other parties to keep things moving. The actions that we have found are effective in preventing delays, or resolving them quickly are:
Organisation – making sure documents are signed and returned as quickly as possible.
Funding – make sure you meet all of your bank’s requirements as soon as you can
Communicating – keeping all parties and advisers up to date, well in advance of any known delay
Good Manners – requests for short extensions of time are quite common throughout the process, standing on ceremony and becoming combative will not serve you well. When the time comes for you to request an extension, how you have behaved when the other party requested one will have a big impact.
The Bliss Conveyancing team are here to support you in your transaction and ensure that you get the best advice and service for your property journey.