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Settlement Problems - What happens when Settlement does not occur on the due date?

It is every Vendor’s nightmare - the Purchaser fails to settle on the date specified in the Contract. On the face of it, the Purchaser is in breach of the contract. However, forcing a Purchaser to settle is not an easy matter if they do not wish to honour the contract.

It is not uncommon that settlements do not happen on the due date, however, there is often a valid reason and settlement occurs shortly after the due date.

Where a Purchaser does not settle within a reasonable time (what is reasonable depends on the circumstances) a Vendor will need to consider their options. Generally, depending on the terms of the Contract there are 3 options:

  • Insist that the Contract be completed by serving a Notice to Complete on the Purchaser; or
  • Seek a Court order for Specific Performance of the Contract (normally a Notice to Complete will need to be served on the Purchaser before moving to this option); or
  • Treat the Contract as at an end and try and find another buyer.

Before taking action there are many factors to take into account, which may include:

  • Your contractual right to penalty interest (if any);
  • The terms of the Contract (not all contracts for the sale of land are the same);
  • The amount of the deposit that has been paid by the Purchaser;
  • Whether you are relying on this sale to fund a purchase, hence making the Purchasers failure to settle more stressful and bringing into play other issues;
  • Whether the purchaser has the financial capacity to satisfy an award of damages for breach of contract; or
  • How quickly you can find another buyer for your property.

When a purchaser fails to settle on the due date it can become complicated and stressful for all involved.

If your Contract looks like it might fall over as settlement has not occurred within a reasonable time of the due date, you should consult with your lawyer. They will be able to fully advise you on the issues at hand and the options available to you given the terms of your Contract and the action or inaction of the Purchaser and they may be able to give you a strategy to resolve the matter.

Cormiston Legal has extensive experience in the conveyancing process and is here to help you make the sale or purchase of your Tasmanian property stress free.

Contact us to obtain a quote by visiting http://www.cormistonlegal.com.au/conveyancing_quote

For more information about Cormiston Legal please visit www.cormistonlegal.com.au or call us on 03 6332 9353.

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