What happens at settlement?

Settlement is where the final exchange of the property title for the balance owed to the Vendor under the Contract of Sale. If there is a mortgage registered on the title, or you’re getting a new mortgage the bank will be at the settlement as well as the buyer and seller’s conveyancers.

Most settlements are completed online via the PEXA platform, but some complex settlements can still be completed offline. All parties are in a settlement workspace together online. This is where everyone confirms the settlement figures, signs the transfer documents, pays the stamp duty and where settlement monies are authorised and paid.

Settlement documents are prepared and checked beforehand and the settlement figures are calculated prior to the settlement day. Lenders calculate the funds they are providing for buyers or taking from sellers.

Once the transfer documents have been finalised and the settlement figures confirmed all the parties are then required to ‘sign off’ the workspace. Once signed off the workspace is ready for settlement. Settlement will be completed in the workspace at the agreed time. An online settlement takes approximately 20-30 minutes for the settlement to be completed.

During the settlement monies are transferred from one party to another and the title details are changed on the Government’s Land Title Register.

Problems and delays of property settlements

If your settlement does not go through the problem will be rectified and the parties re-assess the issue and settlement is set for another time. Usually, the next half an hour time slot. Online settlements make it very easy to reattend settlements.

Settlements can fall through for many different reasons. The most common problem is that one of the banks are unable to settle. The most common issues are due to mortgage document processing delays or settlement fund delays.

If settlement does not occur on the day stated in the Contract of Sale, you may be in default and have to pay penalty interest. In Victoria, if you cannot re-book settlement the Vendor may issue a rescission notice giving you 14 days to settle.

If you can’t settle during this 14 day timeframe then the Vendor will be able to take your deposit monies and pursue you for further costs to resell the property. They can also claim the difference in the purchase price if the property sells for less. The process varies in each state with some being very strict.

Getting the right advice is crucial

At PCL Lawyers our Conveyancers and Property Lawyers are diligent and pre-empt any issues that may delay settlement. If you have an issue regarding settlement and defaults make sure that you get the right advice.

Some more FAQ’s about Conveyancing & Settlement

How do I collect the keys?

The keys are usually at the Real Estate Agent’s office. Once settlement is completed the Vendor’s Solicitor notifies the Agent and then the keys can be released to you.

It may take some time for settlement to process so the time booked is not always guaranteed so you may need to allow for this.

Once you have the keys you can start unpacking!

Can I change my settlement date?

The settlement date is in the Contract of Sale and you can request to change your settlement date if the otherside agrees to it being changed.  Don’t rely on any verbal agreements or what someone says when negotiating the contract – people do change their minds.

If you think you may want to bring a settlement date forward or later then you can request our conveyancing lawyers to draw up a special condition to insert into the Contract of Sale.

What is a final inspection?

The Contract allows a purchaser to have a final inspection of the property within 7 days prior to the settlement date. You should contact the Real Estate Agent to organise your final inspection.

You will be looking at the condition of the property and making sure that allowing for “fair wear and tear” that everything is the same as when you purchased the property.

The Vendor must leave any fixtures in the property meaning anything fixed such as dishwashers, ovens, plumbed fridges etc. If you are uncertain about what should stay and go you should add these items into the Contract before you sign for clarity.

If you have an issue to raise you should be able to produce proof that the property was not in that condition when you bought it. We always suggest that you take plenty of photos before you sign the Contract and also at your final inspection.

About The Author - Brad Mayberry

Brad Mayberry is a Senior Conveyancer with over 25 years’ experience within the property industry. Brad’s expertise spans all aspects of property transactions, instilling clients with the...