Navigating Simultaneous Settlements
Let's dive into the topic of simultaneous settlements and why it often triggers anxiety for many people. Simultaneous settlements occur when a client is both buying and selling a property, relying on the funds from the sale to finance their new home purchase. You’ll find they frequently arise when one contract is subject to the sale of another property. For instance, a buyer may have a special condition in their contract, stating that it is subject to the successful sale and settlement of their current property. It's a common scenario in Queensland.
Although simultaneous settlements may seem complex, they can be successfully managed. Mandatory E conveyancing was introduced in February 2023 and assists in ensuring a smooth simultaneous settlement. At Vicca Law we use PEXA which simplifies the process by linking the two transactions, enabling automatic transfer of funds, and facilitating settlements to occur simultaneously.
However, it's crucial to be aware of a significant provision introduced by the REIQ contracts last year which may affect your simultaneous settlement. This provision allows either party to unilaterally extend settlement by five business days, meaning one party can exercise this option without the agreement of the other side. This is particularly important to remember because if there is an extension on one contract due to the use of this clause, it will also impact the settlement of the other property involved in the simultaneous settlement. This possibility can add stress to an already complex situation. It's essential to work with a solicitor or conveyancer who understands the risks involved and maintains open communication throughout the entire process.
At Vicca Law, I personally handle all your conveyancing needs. I'm well-versed in simultaneous settlements and can provide guidance on extensions under the contract.
If you're considering buying or selling a property and want a stress-free experience, reach out to me. Visit viccalaw.com.au to book a free consultation, or give me a call at 0414 193 373. I'm happy to review any draft contracts before you make any commitments.
Let's work together to make your property transaction a success.