In Queensland, the Settlement Date is an essential term of the contract and time is of the essence. It is the date and time set by the seller (Vendor) in the Contract of Sale, for when the buyer (Purchaser) will officially take legal possession of the property.
Settlements can be delayed for many reasons, from financial issues or documentation delays to problems with the property and it is important to know your rights especially when you are not the reason behind the settlement delay.
Buyers and sellers in Queensland can refuse to agree if one requests to postpone the settlement to a later date. A notice is usually sent to the other party stating the time period in which they should settle. Failure to comply may compel the other party to sue for damages and end the contract.
As a buyer, if the seller delays settlement, you could wait until close of business on settlement date and send notification to the seller noting you are ready, willing and able to settle. If they don’t settle by that required time, you can terminate and sue for damages, or possibly obtain specific performance where a court would force the seller to have to settle. Alternatively, you may be able to allow the extension but charge default interest for the extra days so that you are compensated.
On the other hand, if you are the seller and the buyer delays settlement, you could also wait until close of business on the settlement date and send notification to the buyer that you are ready, willing and able to settle. If they don’t settle by that required time, you can terminate the contract, keep their deposit and sue for damages, or possibly obtain specific performance where a court would force the buyer to have to settle. Another option is to allow the extension but charge default interest for the extra days so that you are compensated.
Settlement delays and getting involved in legal courses of action can be stressful for both parties. It is important to carefully go through the terms and conditions of the Contract of Sale and get a thorough review of the contract by a conveyancer. Conveyancing laws vary from state to state, so it’s advisable that you consult a professional conveyancer or solicitor throughout your conveyancing process.