Buying a property is an exciting milestone, but the process can be complex. In the current red-hot market, it may feel like once the contract is signed the hardest part is over. However, in Queensland there are strict timelines written into your contract that must be met or the consequences can be serious.
Recently, a Brisbane couple experienced a “perfect storm” of circumstances that led to the vendor of their dream home terminating the contract and keeping their $75,000 deposit when settlement was delayed. The quirk of Queensland conveyancing law that allows this to happen is unique to the state, and is exacerbated by the typically short settlement period of 30 days from signing the contract.
Settlement delays in Queensland
In Queensland, the settlement date is crucial. If this date is missed for any reason by either the vendor or the buyer, the contract can be terminated immediately. There is no obligation on either party to grant an extension to the settlement date, and should the contract be terminated the deposit can be kept by the vendor if the buyer misses settlement, or must be returned to the buyer if the vendor delays. Both parties are also able to sue for damages.
Even if an extension is granted, both parties are able to charge penalty interest for each day of the extension, and can also claim compensation for expenses incurred due to the delay, such as legal fees or storage costs.
Settlement delays in the southern states
In contrast, the southern states have more safety nets in place to deal with unforeseen issues in the settlement process. Not only are settlement periods usually longer to start with – often up to 12 weeks – but there are also leniency periods that can be applied if settlement has to be delayed.
In New South Wales, both parties can issue a Notice to Complete, which allows an additional 14 days before terminating the contract. While vendors are able to charge penalty interest in New South Wales, purchasers are not. It is also possible to issue a Notice to Complete in Tasmania. South Australian contracts allow for a grace period of 3 days before penalty interest can be applied, and this state also provides the option of a 14-day Notice to Complete.
In Victoria, settlement delays tend to be dealt with by negotiation between the two parties, with options such as obtaining a license agreement for early occupation preferred over terminating the contract. Victorian buyers are able to terminate the contract after a 10-day settlement delay, but they are not eligible for penalty interest during this time.
The most common cause of settlement lapses is bank delays, which can affect both vendors and purchasers, and is often out of their hands. Processing times for finance approval can be lengthy, and it is common for sellers to file the release authority only once the contract has gone unconditional. In Queensland, this often only leaves 14 days until settlement. Some banks can turn the paperwork around this quickly, but others cannot.
It is essential that deadlines are met when purchasing property in Queensland, and the best way to make sure this happens is to have an experienced conveyancing lawyer on your team.
At Cameron Rogers Solicitors and Co, we will personally guide you through the process and keep you informed every step of the way. Contact us now on 07 5445 1213 or book a consultation through our website to find out how we can assist you with your property transaction.