Before a property is officially yours, you have to wait for the settlement period, which is typically 30 – 90 days in length. However, this settlement period isn’t set in stone. There are many reasons a buyer or seller may delay settlement. So, how does this work and how should you handle it?
WHAT CAN CAUSE A DELAYED SETTLEMENT
There are many reasons a settlement could be delayed, both on the buyer’s and the seller’s sides. Here are some of the situations we most commonly encounter when acting as a property buyer’s agent:
- Awaiting the sale of another property
Often a seller has put the property on the market with the plan to buy another. One contract is dependent on the sale of another, so if the seller hasn’t found another property, they may look to extend the settlement period.
- Post-settlement repairs and maintenance
Final inspections can sometimes find issues that weren’t there before. The buyer may request time to get these fixed, either by the seller or themselves to prepare for moving into the new space.
- Late or incorrect paperwork
There’s a lot of documentation involved in buying property, and it’s not uncommon for things to be late or completed incorrectly. This means they must be redone, which can delay settlement.
- Off-the-plan purchase
This is the most common reason for a long settlement period and allows for the purchased property to be constructed.
UNDERSTANDING YOUR RIGHTS
The laws around conveyancing vary by state, so it’s important to understand the differences. This is where professionals in the area, like our Brisbane buyers agents, can help. At its most basic level in Queensland, vendors and buyers can both refuse delays. They can also terminate contracts and sue for damages. One other option is to allow the extension but charge default interest for the extra days so that you are compensated. Ensuring you know your rights, as well as the other what the other party can do, is crucial for any part of the settlement process.
HOW TO AVOID A DELAY
If you don’t want settlement delayed, the most important thing is to be organised and communicate clearly! This can ensure there are very few opportunities for the settlement to be extended. It can also help to have a professional team on your side to do all the heavy lifting for you.
Please note we do not provide legal advice – contact your lawyer for more information around the legalities of settlement periods.