Penalty\Option for delayed settlement by 1 day

[Truly Exotic]

some advice on this situation would be appreciated

settlemtn is tomorrow

as of 10am today, i have not received info as to the exact amount to pay inc rates etc

since settlement is 3 hours drive away where the property is

im running out of time to get bank cheques organsied and get them express posted,

if conveyancer gives info too late, eg 430pm

and i send out cheques tomorrow to receive them on monday, what would the penalty be and i feel its not really our fault,

so whats the legal precedent here, dont want to get a penalty when we've done the right thing

 

[tobe]

Is the property in the bahama's or Monaco?

have you been in touch with your conveyancer? What did they say? I'd suggest driving, or couriering the bank cheque, or giving your conveyancer authority to transfer from your transaction account. Most lender provide this option for settlment, however many conveyancers dont like doing it.

that said delays of one day might not be acted on by the other side, 12% of purchase price divided by 365 isnt a great deal of money.....

 

[pennyk]

Our conveyancers/ solicitors/ banks have always taken care of all of this stuff for me. Are you sure that you need to organise all this?

 

[HotRod]

In WA there is a 3 day grace.

In any event the interest for one day would be in the order of $250 to 300.

If that is such a big thing, you probably have too much skin in the deal.

 

[Peter_Tersteeg]

Settlements get delayed by a day for all sorts of reasons. I don't recall anyone trying to claim compensation for just 1 day and I'm fairly sure most states do have a 3 day grace period.

I'd also suggest never to settle on a Friday.

 

[Terry_w]

Also factor in the 1 day interest that you don't have to pay!

 

[lizzie]

Our conveyancers/ solicitors/ banks have always taken care of all of this stuff for me. Are you sure that you need to organise all this?

I'm with Penny on this one. I've never had to organise cheques or payments or money transfers or attending settlements.

My mortgage broker and conveyancer organise everything and I just stay out of the way. Last thing they need is some noob (me) mucking the system up

 

[Terry_w]

I'm with Penny on this one. I've never had to organise cheques or payments or money transfers or attending settlements.

My mortgage broker and conveyancer organise everything and I just stay out of the way. Last thing they need is some noob (me) mucking the system up

How do they get access to your funds?

 

[Aaron_C]

How do they get access to your funds?

Blank Cheque?

 

[Tillie]

How do they get access to your funds?

Also our solicitor and bank have always looked after these payments. We only have to email scanned and signed instructions to the bank that we allow them to withdraw money from our loan, bank account. We always have specified the excat figures that they are allowed to withdraw based on solicitors advise. I am not even sure if they are writing cheques or paying electronically

 

[pennyk]

How do they get access to your funds?

I think it was all organised when we signed either the mortgage or the contract.

the solicitors usually send through a disbursement note a few days prior to settlement.

 

[Terry_w]

If you are borrowing 100% or 90% it may be ok, but if you are chipping in your own money too this money has to get to the vendor in the form of a bank cheque so you would have to arrange this somehow.

 

[Truly Exotic]

ok, thanks for the input,

i guess my situation is a little unique a fair chunk of the property will be paid with cash,

the conveyancer emailed me cheque details at 230pm on thursday with settlement friday.

They claim that the vendor has all the power and they are legally required to give details before 459pm the day before

in my situation, the cash component was coming from 3 relatives, all of whom were waiting to go to the bank for me, all of them skipped lunch and rescheduled meetings to the last part of the day, since their banks closed at 4pm. however, since i got the email at 230pm, by the time i read it it was about 3 to 330pm, one of these relatives werent contactable since they had to go to meetings, and since i wasnt going to be at settlemtn, the cheques wouldhad to be express posted before 5pm on thursday

i had a whinge to the conveyancer, and said, its too short notice, to which i got told,
nothing much they csn do,

so i suggested, how about first thing friday morning,

-i express post cheques and give tracking number
- do a funds transfer and give them reference number
- provide me with a same bank account so if i do a transfer they have it immediately,

these were all rejected, and the only option was to withdraw cash and to go over to their bank account and put it in there so they have instant access to it,

i called the bank and they said, id have to visit 4 branches to get that amount of cash,

the vendors legal team also said that they dont agree to monday settlement without 3 days penalty interest at 11 or 12%,

just seems so unfair
p.s and ive learnt my lesson not to do settlment on the day before a weekend! So i guess wed or thurs is the best since, funds transfers dont show up until tuesday if done on friday onwards

 

[Tillie]

We have been settling properties with partially cash and loan and always bank has just taken the money from our bank account and from loan and looked after the payment with solicitor.

"Truly Ecotic" of course it is easy to be wise in hindsight, but why did not your relatives transfer their funds to your bank account earlier in the week? You knew roughy purchase price figure in advance. The final settlement might be only maximum a couple thousands extra. In that way you had to withdraw only one cheque from one bank and it's done or alternatively use electronic money transfers.

 

[lizzie]

How do they get access to your funds?

Deposit paid on exchange of contract. Balance of purchase paid by bank. Stamp duty etc transferred into conveyancers trust fund a couple of days before settlement.

Next purchase (PPOR) will be cash - so I'll just send the conveyancer a cheque a week of days beforehand for him to clear in his trust acc.

Then I stay out of the way and let it happen.

There might be a few hundred $$ here and there difference - but it comes out in the wash.

 

[pennyk]

I just dont trust myself to do these sorts of things in time and correctly.

I wrote out our deposit cheque for our new PPOR. The words were correct, but I wrote $**.00 instead of $**, 000.00 dollars in the number section.

Funny thing is no-one noticed - both of us, our solicitor, their solicitor and the vendor - no-one picked it up until their bank refused to accept the cheque.

Obviously, in this case, I couldnt really trust anyone. But I definitely feel more confident with someone else looking after all these details!

 

[Macca]

With a variety of sources like that it was always a risk I suppose.

Perhaps in hind sight it would have been better to have all the money in your account or in a trust fund ready for the sprint to settlement.

 

[mgl1100]

Often the purchaser's solicitor will not get the details of the cheques required for settlement until lunchtime (or sometimes later) on the afternoon before settlement. This is because the vendors often need to wait for their bank to calculate the payout figure for the mortgage, and then process that information and the other information regarding the cheques required for settlement - only then can they send the information through to the purchaser's solicitor.

Your solicitor should have advised you of the potential for the late running around in the afternoon before settlement. Didn't they have a trust account you could have deposited your funds into beforehand?

Hindsight is a wonderful thing! Sorry to hear it was such a drama for you.