There are various reasons why property settlement could be delayed, either by the buyer or vendor.
Here are the 3 most common reasons:
Delays & Late Documents
Sometimes banks aren’t ready because they are still waiting
on all the documentation, so be proactive and ensure that you return all
relevant documents to the bank as soon as possible. Also, if either party does
not return all the documents to other relevant parties in line with the necessary
timeframes, delays will ensue.
Sometimes if repairs that were supposed to occur before
settlement do not happen, delays will result and affect the settlement.
If a vendor is upgrading to another property and the
purchase is dependent on the sale of the original property, if problems occur,
it can affect the agreed settlement date.
What are your rights
when settlement is delayed?
Penalty interest can be charged and either the vendor or
buyer can terminate and sue for damages
Penalties apply after a leniency of 3 business days
The vendor can charge interest for each day that settlement
is delayed & issue a Notice to Complete -allowing the buyer 14 days to
complete the sale).
If a vendor delays settlement, the purchaser can’t charge
interest rates. A vendor can charge interest rates if the buyer wants to delay.
Each side has the right to rescind after a delay of 10 business days.
Either party can issue a Notice to Complete which gives the other party an additional 14
There is no obligation for either party to agree to delay
settlement and changes to the settlement date can only take place if both sides
Vendors and buyers can issue a written default notice giving
the other party 10 business days to remedy the default
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Thursday, 12 September 2019