DEFAULT IN PROPERTY SETTLEMENTS

DEFAULT IN PROPERTY SETTLEMENTS

What happens if the sale of your property doesn’t settle?

If the Purchaser is at fault and doesn’t settle, the Vendor may serve a Default Notice.  The notice may state that if the default is not rectified within fourteen days the Contract will be at an end and the deposit forfeited to the Vendor. 

The Vendor then has three options.  It may either:

(a)          Retain the deposit; or

(b)          Re-sell the land and claim any shortfall in the price together with expenses incurred.  Any deposit retained is deducted from this claim.

(c)          Have the land valued and if there is a shortfall, claim the difference from the Purchaser, together with expenses incurred.  Any deposit retained is deducted from this claim.  

If the Vendor is at fault and doesn’t settle, the Purchaser may serve a Default Notice.  The notice may state that if the default is not rectified within fourteen days, the Contract will be at an end.  All money paid must be refunded to the Purchaser and the Contract will be at an end.  The Purchaser may also claim from the Vendor any expenses, damages and loss of bargain arising from the default.

In the alternative, the Purchaser may decide to seek an order from the Court for “Specific Performance”, which if granted, will force the Vendor to settle.  Specific Performance is an order which will rarely be provided unless the Court is satisfied that monetary damages alone will not satisfy the bargain lost by the Purchaser.