Buying and selling property can be a stressful exercise, even for the most experienced real estate mogul.
One of the most stressful aspects is the timing – ensuring all parties are ready to settle on time can be a little hectic.
There can be severe consequences for failing to settle on time, and for buyers and sellers, this can sometimes be out of their control.
In 2022, the Real Estate Institute of Queensland (REIQ) made moves to address this, by releasing new versions of its contracts for the sale of houses and apartments.
The new contracts contain an amendment that allows either party to extend the settlement date for up to five business days.
Clause 6.2(1) of the REIQ Contracts states:
- Either party may, at any time up to 4pm on the Settlement Date, extend the Settlement Date by giving a notice under this clause nominating a new date for settlement which must be no later than 5 Business Days after the Scheduled Settlement Date.
In practical terms, it means anyone involved in the sale can give notice as late as 4pm on the settlement date that they would like to extend settlement by up to five business days. They don’t have to give a reason as to why settlement has been extended.
The REIQ introduced the new clause to address the risk that banks can pose to parties at settlement. There are several reasons why banks might not be prepared for settlement, including short settlement timeframes, errors on relevant bank documents or general processing delays.
There are some important points to note:
- The settlement date can only be extended by a maximum of five business days from the original settlement date. Any extension beyond that is only possible if both buyer and seller agree.
- Written notice must be given extending the date for settlement before 4pm on the original settlement date.
- Only the settlement date can be extended under the new clause. It cannot be used to extend the finance date or the building inspection date. Those dates can only be extended with the agreement of both parties.
If you’ve got questions about buying, selling, or any aspect of conveyancing and property law, Bickell & Mackenzie has the answers. Contact our office today for an appointment with our expert solicitors.