A property settlement refers to the process of transferring a property from one party to another once all the conditions of the standard contract for sale have been fulfilled.
The conditions on the contract of sale can stipulated by both the seller and the purchaser and cannot be changed or altered without the consent of all parties.
In addition to these conditions it is possible the lender has added their own conditions in their approval letter. The most common of course being evidence of insurance but sometimes they might insist on an engineer’s report particularly on older homes.
Assuming all conditions are satisfied then on the settlement date parties for the seller and the buyer meet at the office of the buyer’s mortgagee (lender) or at Landgate where all the relevant documents are checked before the financial aspect of the transaction is completed. Ultimately the buyer’s lender swaps a cheque in exchange for the title to the property and any discharge of the mortgage in the name of the seller.
If either party is not ready to settle on the agreed date there is a provision of three business days grace. If the seller is not ready after this period then they must pay compensation on the balance of the purchase price calculated on a daily rate of interest. If the purchaser is not ready then they must pay penalty interest calculated on a daily rate.
Finally a seller has until noon the day after settlement to vacate the property and make good ant final conditions that might apply relating to the state of the property on possession.
Australian Credit License No. 377093
