One of the most important dates to be written into a property sales contract is the anticipated day the sellers must vacate the premises and allow you to move in or take possession as a landlord – otherwise known as settlement day.
However, the process can sometimes throw obstacles in your way, causing a delay to occur, despite both parties having already signed off on the agreed date that the keys will be handed over.
From the seller waiting for the bank to discharge their mortgage, and problems with paperwork, to the buyer discovering a problem during final inspection of the property, and unforeseen life hurdles that get in the way, the reasons for why settlement delays can occur are wide-ranging and often stress-inducing.
It is especially stressful if you are a proactive investor who has lined up a tenant to move into the property, as the delay has the potential to impact the new renters.
Fortunately, there are a few legal rights the buyer has at their disposal if the vendor delays settlement day – keeping in mind of course that some problems can’t be helped. A buyer should show some level of understanding, depending on what has caused the delay; however, if a delayed settlement truly doesn’t suit you, there is recourse available.
What are your settlement rights as a buyer?
Your rights as a buyer depend on the state you’re purchasing in, but remember that settlement laws can change, and it’s always best to team up with a professional conveyancer or solicitor throughout the buying process.
If you’re a buyer in Queensland, you have the right to either accept or deny the seller’s amended settlement date. You also have the right to sue for damages in case of an unagreed delay and to terminate the sales contract, with the option to charge the seller penalty interest.
In WA, buyers need to allow settlement to be delayed for three working days before they’re able to charge the vendor penalty interest.
New South Wales
On the other hand, in NSW buyers have the right to issue the seller with a Notice to Complete, which gives them an extended time, usually about two weeks, to settle. Thereafter, the buyer can terminate the contract and retrieve their deposit.
Unfortunately, a buyer doesn’t have as many legal rights in Victoria. They have no right to enforce payment of penalty interest by the seller, and only after a 10-day delay is the buyer able to terminate the contract.
The rules protecting buyers in Tasmania mirror those in NSW, in that they can issue a Notice to Complete extending the settlement to about 14 days. If the seller does not comply, the buyer has the right to claim for losses suffered as a result of the delay.
In SA, the buyer doesn’t have a legal obligation to approve a delayed settlement by the seller. Changes can only happen if both parties are able to reach agreement as to the new date. The buyer can, by giving written notice, ask the seller to rectify the delay within three working days, and their failure to do so grants the buyer the right to impose the penalty interest specifi ed in the sales contract.
Northern Territory buyers are able to send written notice to the seller, giving them 10 days to settle, and if the seller doesn’t follow this instruction, they have to repay all fi nancial assets to the buyer, including interest as per the contract.
Considering how settlement laws vary between each of the states, it’s advised that you should team up with a conveyancer or solicitor who operates in your specifi c state. That way you can gain the most up-to-date advice on buyers’ rights in your state, and also ensure that the settlement process is as smooth as possible.
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