Avoid unexpected delays and nasty surprises with forward planning
The Christmas and New Year period every year presents a challenge for anyone buying or selling property. In New South Wales, the standard settlement period for conveyancing transactions is 42 days, or 6 weeks, which means that any contracts dated around the middle of November, the standard completion date will fall around the holiday period.
Aside from the actual public holidays, the Christmas and New Year period is traditionally the time of year that many business will close or be operating with reduced staff. It is the the holiday season after all.
So what does the holiday season mean when it comes to buying or selling your property? The main concern is delay – especially if it is unexpected delay. It is quite normal for the contract for sale of land to include a term addressing the issue of delay. Usually, it is a penalty interest rate, but if there is extensive delay then it may also give rights for termination and forfeiture of the deposit. Basically, what this means is that failing to properly address the issue of delay because of the holiday season could result in serious consequences.
What can you do? If you are buying or selling property during this period, and the standard completion date falls within the holiday season, you should consider whether it is possible to adjust the settlement period so that the completion date falls before or after the holiday season. Unnecessary complications and unwanted consequences can be quickly avoided if you recognise that they can arise from attempting to settle during the holiday season and you take steps to negotiate your contract (especially the settlement period).
Before you sign the contract for sale of land, speak to your lawyer or licenced conveyancer and to your bank to ensure that the completion date is practical and achievable – on a worst case scenario assessment. Most experienced operators will be able to factor likely holiday season delays into ‘normal’ operating conditions to give you a realistic assessment of what is probably against what is possible. Taking this simple step will be well worth the effort.