“Day of Settlement & After – Conveyancing FAQ” is a comprehensive guide that addresses common questions and concerns regarding the final stages of a real estate transaction, particularly focusing on the day of settlement and the period immediately following it. This resource provides valuable information and guidance to buyers, sellers, and other parties involved in the conveyancing process, helping them navigate the intricate details of property transfers with confidence and clarity.
- Who is involved in the settlement process?
Normally, the Buyer and Seller both have legal representation. In most cases, both the Buyer and Seller will also have a bank involved. The Buyer’s bank will be advancing the funds required to buy the property, and the Seller’s bank needs to hand over a release document in exchange for payout of the Seller’s loan from the Buyer’s funds.
- Do I have to be present for settlement?
You do not physically attend settlement, as your solicitor will attend on your behalf. You should make sure you are contactable at all times, in case of any issues arising out of settlement.
- What happens if I can’t settle on the settlement date?
Both the Buyer and the Seller have up until 5.00pm on the day of settlement to effect settlement. If for some reason you or your bank is unable to facilitate settlement, you must ask the other party for an extension of time. This all must happen by 5.00pm, so that you do not breach the contract by failure to settle.
Either the other party can grant an extension without any conditions, or they can impose a penalty such as default interest or additional legal fees.
The other option is that the other side refuses to grant an extension, and instead tenders for settlement. This means that they will continue with the settlement, with or without you, and if you fail to settle then they can place you in breach of contract and terminate. This then leaves you open to further legal action.
Read about what happened to these late settlements (link to my article on lost deposits)
- What happens if the other side can’t settle on the settlement date?
The same applies as above – except it is you who has the option to either grant the extension (with or without conditions), or tender for settlement.
- Settlement has now been effected, so what happens now?
Your solicitor will call you to congratulate you on your property transaction. As a Buyer, after receiving that phone call, you can arrange with the real estate agent to collect your keys. As a Seller, you can crack open that champagne bottle and toast to a mortgage debt repaid!
- What about rates, water and rent?
The solicitors work out and agree on an adjustment so that the Seller pays up to and including the day of settlement, and the Buyer from the following day. If the property is being rented, then rent is included in the adjustment. It may be that the real estate managing the property does an in-house adjustment rather than the solicitors including the rent in the settlement calculations.
- And the utilities?
Telephone, gas and electricity connections and disconnections are all the responsibility of the Buyer and Seller. The Seller needs to make the contact with their providers to give an end date to their billing, and the Buyer needs to arrange for transfer or new connections with their providers.
In summary, “Day of Settlement & After – Conveyancing FAQ” serves as a resourceful guide that demystifies the complexities of property conveyancing, empowering individuals involved in real estate transactions to navigate the critical final stages with confidence and understanding.
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