Contract Terms – In November, check your settlement date (Part 1)

Check your settlement date

So what’s so important about today? Well, according to the standard Contract for Sale of Land, which has a 42 day settlement period, if you’re going to enter into a contract to buy or sell property today (yes, that’s right 13 November 2013) your completion date will fall on Wednesday, 25 December 2013 – Christmas Day!

Since Christmas Day is a public holiday, the standard contract terms provide that settlement then takes place on the following business day which is Friday, 27 December 2013 (the day after Boxing Day, which is also a public holiday).

Why do you need to know this?

I’m sure you could come up with more if you think about it, but for now here are 3 reasons why this is important and why you need to know this:

  1. The standard settlement period refers to days, and will include ALL days regardless of whether they’re public holidays or not. If your settlement period includes public holidays, you just need to be aware that there’s going to be less effective days to complete your due diligence or arrange your finance (if required). During the end of December and early January, the public holidays that you need to account for are Christmas Day, Boxing Day, and New Years Day.
  2. Many businesses close or have limited staff during the holiday season. This means there could be ‘longer-than-normal’ delays with completing property searches and enquiries, or you might have issues in getting things done, especially if you need them done urgently. Generally don’t expect much to happen during the week between Christmas and New Year and maybe a few days to a week either side of that period.
  3. In my experience, the level of demand, urgency and backlog seems to increase exponentially in the period leading up to the Christmas and New Year period. Many clients want to complete their transactions before the break (for the reasons outlined in this article) which often has the contrary effect of more delays in the finance application and approval process. Again, just account for it when you’re trying to workout the timetable for your transaction to complete.

Although I’m writing about this with respect to 2013, it’s actually the same issue every year and it’s not limited to just buying or selling today, but applies to the whole period from mid-to late November and throughout December.

What can you do about it?

So now that you know buying or selling property from mid-November until end of the year can be an issue for the standard 42 day settlement period, what can you do about it? I’ll address that in the second part of my article to be released tomorrow (14 November 2013). If you can’t wait until then, contact my office to find out more on how we can help you with your property transaction.

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Ern Phang

Ern Phang
Director - Property Lawyer

This website is supported by Phang Legal, a law firm in Parramatta providing fixed fee conveyancing services across Sydney and New South Wales. Ern Phang is the solicitor director of Phang Legal.