Settlement is the last stage of the long drawn process of buying and selling of a property, when the terms of sale or purchase are finalised and the transfer of ownership is initiated.

Settlement process is referred to as the official process, whereby the property is legally transferred from a seller to the buyer, after the conditions of the Contract of Sale are fulfilled. It is usually conducted by the legal and financial representatives of the respective parties.

The Property Settlement Process

During the finalisation of a property settlement process, few steps need to be followed before concluding the Contract of Purchase or Sale. These steps include:

Completion of all searches and clarifications related to the property;

Completion of negotiation regarding payment of the amount due on settlement;

Completion of formalities with the financer and making due arrangements for the money to be paid on settlement; and

Payment of all the relevant duties and taxes such as the Stamp Duty.

The norms of final settlement vary between the States and Territories, but normally it takes place within 6 weeks, after the exchange of contracts happen and the terms are finalised. The Title Deed is exchanged after the payment of the due amount.

The possession of the property is transferred after the settlement. However, an early possession may be taken ‘under licence’ after an agreed payment of rent.

The time period during which a contract is exchanged and the property settlement takes place is referred to as the settlement period.

The property settlement process varies from one State to another but usually the sequence of the process is as outlined below:

The lender or the bank, sanctions the loan amount to the buyer and such amount is paid out to the seller;

All the relevant legal documents such as the memorandum of transfer, are completed and lodged with the appropriate agencies;

Any adjustments which were pre-paid or accrued during the settlement period, such as rates are reconciled by the buyer and the seller;

The buyer receives the title of the property and the seller’s Solicitor or Bank organises for the Registrar General, to register the *Transfer and also the home loan, if applicable; and

Both the parties, then issue a written consent that the settlement process has taken place, and that the agent should release the keys to the buyer.

The help of a professional like a Solicitor or a Conveyancer may be sought to finalise the settlement process. It is the duty of the Solicitor or Conveyancer to prepare and arrange for the signing of transfer of the title documents. Ideally, the transfer documents should be signed 2 weeks prior to the date of settlement as it needs to be provided to the financer after the settlement. The financer or lender takes up the responsibility of registering the document at the State or Territory Titles Office and upon registration, the title of the property gets changed to the new owner’s name. It will be the duty of the Solicitor involved, to examine the Land Registry Transfer documents to ensure that it has been properly completed, signed and witnessed.

The Solicitor or Conveyancer will contact the financer, the other party’s Solicitor or authorised representative and any other interested parties to arrange and decide on the date and place of the settlement. The Solicitor or Conveyancer will also advice and inform the concerned parties about the implications of the terms of the contract and the fund required, to be provided prior to the settlement. This amount is generally paid by the purchaser, a day prior to the settlement by issuing a cheque.

After the conclusion of the process, the Solicitor or the authorised representative of the purchaser should contact the authorised representative of the seller, regarding the transfer of possession.

The Solicitor also confirms the conclusion of the settlement process and sends a Statement of Adjustment to show the disbursement of funds to the parties involved.

Our team of experts at Owen Hodge Lawyers are specially trained in making the entire conveyancing process a smooth and hassle free experience for you. We can guide you and act on your behalf during the entire settlement process. Please feel free to contact us in case you need any assistance in this regard.

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