What happens if you don’t make the settlement date?
If a party is not ready to settle on the day of settlement, that party is then in default of the Contract terms.
What is a Notice to Complete?
The Notice to Complete is a written notice from the party that is not in default, to the defaulting party, requiring the defaulting party to complete the transaction within a reasonable time
Who can issue a Notice to Complete NSW?
The party who is not in default must be ready and willing to settle on the scheduled settlement date and not have contributed to the delay in settlement itself, in order to take further action. The non-defaulting party can then issue the defaulting party (the party that is not ready) with a Notice to Complete.
When can a Notice to Complete be validly served?
A Notice to Complete can only be validly served after the scheduled settlement date e.g. the next business day after settlement was required to take place.
How much notice is required to be provided?
Generally, fourteen (14) days from the receipt of the Notice to Complete is considered a reasonable amount of time. However, that is dependent on the individual circumstances. What is considered to be “reasonable amount of time” is dependent on all the relevant factors such as what issues or things are to be done in order to be ready for settlement.
It is important that the Notice to Complete includes making “time is of the essence”. This ensures that the amount of time provided in the Notice to Complete must be strictly adhered to by the defaulting party.
What happens if the Notice is not complied with?
If, after validly serving a Notice to Complete on the defaulting party, and that party still does not complete by the time allowed in the Notice to Complete you will have different options depending on if you are the vendor or purchaser.
What happens if settlement is delayed by the purchaser?
If you are the vendor, you can always agree to allow further time and extend the deadline provided in the Notice to Complete to the defaulting party at its discretion.
The other option available to the vendor is to terminate the Contract. If a vendor elects to terminate the Contract, they may then also be entitled to retain the deposit funds paid by the defaulting purchaser. The vendor may also have the option to elect to take legal action against the defaulting purchaser for any damages incurred by the vendor.
If the vendor terminates the Contract and then sells the property to a different purchaser, but at a reduced price from the Contract with the original defaulting purchaser, the vendor may elect to take legal action against the defaulting purchaser for the difference in the sale price.
What happens if a vendor fails to complete?
If you are the purchaser, you have the option as does the vendor, to agree to allow the defaulting vendor further time to complete and extend the deadline provided in the Notice to Complete to the defaulting party at your discretion.
The other option for a purchaser is to terminate the Contract. This means the purchaser would then be entitled to recover its deposit from the defaulting vendor. This can be made difficult if the deposit funds were released to the vendor prior to settlement.
The purchaser could also take legal action against the vendor for its breach of Contract as well as costs incurred by the purchaser in relation to the transaction.
ABOUT CHRISTINE BASSETT:
Christine is a Licensed Conveyancer and Justice of the Peace at Coutts’ Narellan office. Since joining Coutts Lawyers & Conveyancers in 2013, Christine quickly immersed her interest into property and has since completed studies of Conveyancing Law and Practice at Macquarie University; and is accredited with the Australian Institute of Conveyancers NSW.
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This blog is merely general and non-specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.