Brian Cannan: I'm here with Greg Jemmeson from Jemmeson Fisher Solicitors and Accountants. Good afternoon Greg.
Greg Jemmeson: Hi Brian.
Brian: All right the subject today is about settlement and what happens if settlement doesn't happen.
Greg: Okay Brian, what happens is that a normal contract will have a completion date and when we get to that completion date if the purchaser for whatever reason hasn't finalized their finance is unable to move or whatever reason what would normally happen is that the vendor's solicitor would issue what is known as I noticed to complete which then says you have 14 days to complete and sets the date and time for completion making time of the essence. Time of the essence simply means that if you don't complete at that time and place then the contract is rescinded. If for whatever reason the purchaser is then not able to complete after receiving a notice to complete the vendor then has the right to terminate the contract to retain the full deposit they then have potential damages now what happens here is they then put the property maybe back on the market if it sells for a price substantially lower than under the previous contract they will be able to sue for the balance plus any extra costs of agents commission further advertising costs etc so there's that avenue.
Brian: But what if it sells for higher, can they still sue?
Greg: Generally no but they would still be entitled to retain their damages for the deposit.
Brian: So they'll be able to keep the ten percent and if they get a bit more than that's the benefit.
Greg: Yeah. Now on the other hand if the vendor for whatever reason is not in a position to settle the purchaser in most instances will have the right to also issue a notice to complete. If it gets to the 14 days and the vendor is still not in a position to settle the purchaser then has a number of options that they can then terminate the contract and have their deposit returned or in some instances they may actually go to the Supreme Court to seek what is known as specific performance where the court orders that the vendor must convey the property to the purchaser.
Brian: If they don't?
Greg: If they don't well then they'll be in contempt of the Supreme Court.
Brian: So they'd be a lot of trouble.
Brian: Well I think that helps everyone for a better settlement time and understanding more about that, so thank you Greg.
Greg: Thanks Brian.