Time and Settlement in Property Contracts

What does "time is of the essence" mean in a contract?

Usually, time is of the essence of the Contract which means that you must provide the Seller the balance of the purchase price strictly by the due date.

Can the Seller extend Settlement Date?

Yes, under the Standard Contract, the Seller  may extend the Settlement Date by up to five business days by giving notice to you, without the need for you  to agree. The Seller  does not need to provide any reason for exercising this right of extension.

Why should I consider the possibility of an extension of the Settlement Date?

You should take the possibility of an extension of the Settlement Date into account particularly if settlement on the nominated Settlement Date is critical to you or your plans. For example, you must consider this possibility when arranging removalists or moving dates.

What is the purpose of allowing an extension of the Settlement Date without mutual consent?

This provision for extending the Settlement Date without mutual consent allows for flexibility in circumstances where unexpected delays may occur. It is a safeguard to ensure that neither party is unduly penalised for minor delays that are beyond their control, such as banks not being ready to fund a purchase.

Why is it important to strive to meet the original deadlines despite the extension option?

Despite this allowance, it is still crucial for both parties to strive to meet the original deadlines to avoid potential complications or disruptions to their plans. For instance, if you have aligned the settlement date with the end of a lease or the commencement of renovations, any delay could have significant implications. Therefore, while the extension option exists, careful planning and communication between all parties involved remain essential to facilitate a smooth and timely settlement process.

What are Settlement Adjustments?

You generally will not pay the exact amount on the Contract. Adjustments are made to proportionally allow for payments the Seller has already made to government bodies during the period that Settlement occurs. These can include things like council rates, but not things like electricity bills.