Can’t Settle on Time? What Should I do Next?
Failing to settle your unconditional agreement can be scary. We’re here to talk you through your next steps.
Failure to settle can take place for a variety of reasons, such as financing falling through. Unfortunately, this generally does not relieve you of your obligations under you Sale and Purchase Agreement.
While you may think that it is only your deposit at risk, the Vendor is able to pursue you for all of their reasonable losses arising from your failure to perform your end of the agreement. This often includes the deposit, legal fees, agent fees, and the change in value of the property - which can be especially impactful in a falling market.
Most agreements also provide for penalty interest, which begins applying to the unpaid portion of the purchase price from the due date until the date of payment. It is therefore essential to quickly arrange your affairs so that you can settle as soon as possible.
If you are able to settle at a later date, most Vendors will agree to this as it is preferred than having to go through the entire sale process again. This is also in your best interest as you will likely only need to pay penalty interest, rather than account for the full losses of the Vendor incurred in re-selling the property.
Regardless of your situation, it is important to have a thorough understanding of the agreement and remain in constant communication with the Vendor. A lawyer is essential for this process, as they will be able to advise on the contents of the agreement and negotiate with the Vendor’s solicitors.
Contact our team to discuss further!
Neha Jamnadas
Director