Sometimes practical or financial circumstances dictate that a sale and purchase settlement is to be completed on the same day. Your conveyancers will coordinate the settlements but can also identify some important points for you to consider.
It is advisable that the purchase contract is signed subject to the settlement of the property being sold. In many cases these dealings rely on each other and this clause should be even if the individual is using cash. If the sale doesn’t happen when it should then it can be financially impossible for the purchase settlement to take place. Having a special condition in the purchase contract which states that the transaction is “subject to” the sale and settlement of the sale contract means that if the settlement does not go ahead for any reason or settlement is delayed there is no breach of the purchase contract.
If possible the sale contract should also be signed subject to the settlement of the purchase contract. If this is not a special condition there is a risk that if the purchase is delayed the sale must go ahead, thus leaving you with a need to store furniture and seek temporary accommodation.
This will really depend on the order in which the contracts are signed.
CHAIN OF LINKED SETTLEMENTS
Occasionally the situation arises where there is a chain of simultaneous settlements happening on the same day. Each settlement relies on the preceeding one and sometimes there is a problem with a settlement earlier in the chain. This is common as the vendor of the property you are purchasing may be purchasing a property themselves and this could happen a number of times in the chain. Unfortunately a problem with one in the chain can affect all subsequent settlements regardless of whether your settlement is fully booked with all parties or not. It will depend where you sit in this chain of linked settlements as to how you could be affected. Your conveyancer may know that there is a problem a few days before, but sometimes they will only find out the day before or morning of settlement.
PRACTICALITIES OF MOVING HOUSE
Packing up your belongings and moving house is a daunting task. On settlement day the Vendor will need to leave the property by 11.30 at the latest on the morning of settlement. Settlements begin at that time at the Lands Titles Office and are generally complete by 12.30 (unless it is a peak time for settlements- then it may be later). If you are planning on removing all your belongings from the property on the morning of settlement it is advisable to talk to your removalist about how long it will take them to load the truck. If you have a lot to move and are worried about being ready in time you should talk to the removalist about options. It may be worth considering packing up a truck the night before or storing overnight and staying with friends or family for the night.
You will not be able to pick up the keys for your new property until that settlement is complete so there may be a waiting time before you can access the property before you can start unpacking .
At McKay Business Services we have experience with coordinating simultaneous settlements. If you are selling and buying on the same day talk to us as soon as possible so we can assist you to achieve smooth settlements