What if I can’t settle on the settlement date?
Whether you are the purchaser or the vendor, it can be a frustrating time to receive news that you cannot settle on the day appointed for settlement. There are a few reasons you may not be able to settle on the date appointed for completion, the most common reason is that your bank may not be ready to settle.
What can I do if I am unable to settle?
Clients often ask; “what happens next?” if they are unable to settle. Contracts in NSW will generally contain a condition that if settlement does not occur on the settlement date, then a Notice to Complete can be issued. The Notice to Complete can be issued by the Vendor or the Purchaser. Generally, a Notice to Complete will provide an additional 14 days for settlement to take place within.
What happens if I still haven’t settled after the 14 days?
As a Vendor
At the end of the additional 14 days provided in the notice, the Vendor can either extended the notice to complete or terminate the contract. Upon termination, the Vendor will be able to keep the deposit (up to 10% of the purchase price) and sue for any financial damages suffered, including any deficiency on resale.
As a purchaser
If you as the purchaser have issued the vendor with a notice to complete, at the end of the 14 days if you have not settled, you have a right to terminate the contract. Upon termination you will be able to recover your deposit and
possibly sue for any damages incurred (if any) in not proceeding with the purchase.