on 06-02-2018 10:57 AM
I have had two situations in the past 2 days where our clients are purchasing, and their incoming mortgagee have not received the loan documents back, so they push settlement back on PEXA for 5-10 business days. They sent a conversation to both myself and the vendors solicitors saying they are pushing settlement back 5-10 business days.
First, the bank shouldn't be allowed to disclose to the vendors solicitors that they haven't received our clients loan documents, and surely they cant push settlement back 5 - 10 business days. Our clients have removalists booked and will be charged interest and the only notification we received, was a PEXA conversation.
on 07-02-2018 02:47 PM
In such a situation, can the outgoing proprietor charge penalty interest if the incoming proprietor fail to settle on time just like in a paper settlement?
on 07-02-2018 02:49 PM
Yes, they are still bound by the Contract and the purchasers can still be charged interest. PEXA does not change the contract, nor does it allow either party to delay settlement for any other reason. Same principles as paper settlement.
on 07-02-2018 03:23 PM
Whether a vendor is entitled to interest for the purchaser's failure to settle on the nominated date will depend upon the terms of the contract. Most contracts will include a special condition that entitles the vendor to interest on any amounts unpaid as from the completion date to the actual date of completion. Normally, if the vendor is not at fault for the delay in settlement and is ready to settle, then the purchaser can be required to pay interest in addition to the balance of the price.
In short, always refer to the particular terms of your contract.
on 14-03-2018 05:26 PM
We at Westpac try not to do this without first alerting the Incoming Solicitor a few days before we would push the date back.
We often find that the solicitor is more pro-active in chasing up the required documents than say the Finance Broker is.
We normally do not push the date back, for a purchase settlement, for any reason.
We try to keep the Purchaser Solicitor informed, via Conversations, of our non-readiness, right up to COB on the settlement date.
If we can still not settle, we would then re-set the settlement date to a date we are hopeful of meeting, usually one or two days later depending on the reason we are not ready.
Having said that, PEXA Guidelines state that any subscriber, who is not in a position to settle 5 days prior to the settlement date, should push the date back by 5 days with advice to the other subscribers.
I agree that we should not be advising the Vendor Solicitor what is causing the delay. We should only advise the Purchaser Solicitor who should then liaise with the Vendor Solicitor. I see Privacy Act considerations here.
We would also be very receptive to bringing the date forward, after having pushed the date back, once we are in a position to settle.