Most settlements go through on time without a hitch. But settlement brings together several parties, two banks and a lot of moving detail, and sometimes something is not ready. A delayed settlement is stressful, especially if you are moving that day. Here are the common causes and how your conveyancer manages them.
The most common cause of a delay is a lender not being ready to settle. The buyer's bank may not have finished processing the loan, or the seller's bank may be slow to prepare the discharge of the existing mortgage. Banks work to their own timeframes, and they are involved in every settlement.
A good conveyancer stays on top of both lenders in the days before settlement, chasing confirmation early rather than discovering a problem on the day.
If the funds in the workspace do not balance, settlement cannot proceed. This can happen if a figure is entered incorrectly, if the buyer's shortfall funds have not arrived, or if a last-minute adjustment has not been accounted for. The numbers have to match exactly.
Your conveyancer checks the financial settlement carefully in advance and confirms your contribution is in place, so the figures are right before the workspace locks in.
Sometimes an issue on the title surfaces, such as a caveat that has not been removed, an outstanding mortgage that has not been discharged, or a discrepancy in the ownership details. Any of these can hold up the transfer.
This is one reason the title should be checked early in the transaction, so an issue like a lingering caveat is dealt with well before settlement rather than on the day.
Buyers are entitled to a final inspection before settlement. If the property is not in the condition required by the contract, for example if inclusions have been removed or damage has occurred, the buyer may not want to settle until it is resolved. Sorting this out can push the settlement back.
Raising any issue promptly, and having your lawyer negotiate a resolution, is the fastest way through.
If settlement does not happen on the agreed day, the contract sets out what follows. Depending on who is at fault and the terms of the contract, penalty interest may become payable, and there are usually time limits before more serious consequences apply. A short delay is usually manageable, but it needs to be handled correctly to protect your position.
Your conveyancer or lawyer advises you on where you stand, communicates with the other side, and works to get settlement back on track quickly.
Most delays are avoidable with good preparation. Getting your finance sorted early, providing your documents and funds promptly, having the title checked in advance, and using a conveyancer who chases the detail before the day all reduce the risk. Orange Legal Group manages your settlement closely through our residential conveyancing service, so problems are caught early and dealt with before they hold you up.
The contract sets out the consequences, which can include penalty interest depending on who is responsible. A short delay is usually manageable, but it should be handled correctly to protect your position, so speak to your conveyancer straight away.
It depends on the cause. A delay may be down to a lender, a buyer's funds, an unresolved title issue, or a problem with the property. Your conveyancer identifies the cause and advises on your rights and next steps.
It is uncommon, but a settlement can fall over if a serious problem is not resolved within the contract's time limits. Good preparation and early attention to finance, funds and title make this very unlikely.
Orange Legal Group offers fixed-price conveyancing and property law advice across Victoria, handled by qualified property lawyers in plain language, with no hidden fees. If you are buying, send us your Contract of Sale and Section 32 and we will review them before you sign. Your first review is free when you go on to use us for the conveyancing.
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