Vendor asking for delayed settlement

Discussion in 'The Buying/Selling Process' started by neK, 27th Apr, 2015.

  1. neK

    neK Member

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    Thought I would bounce past SS, for my sister's property purchase, the vendor has requested delayed settlement for 1 month so that it falls on 2 July 2015.

    The property is currently an investment property for the vendor. My sister will be moving into it and is taking vacant possession.

    Our solicitor is not aware of the vendor's reason for delayed settlement, however delayed settlement does work out better for my sister.

    My concern is whether there is anything sinister about this and should we decline their request?

    Initially i was thinking they wanted to settle in the new year for tax reasons, but im pretty sure tax is based on the date the contract is signed (though they may not be aware of this).

    Anyway, what are your thoughts? Should we just accept their request or decline it?
     
  2. Big Will

    Big Will Member

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    I think you have answered it yourself.

    You say it is better for your sister so why not agree?

    I don't think you need to ask a bunch of random people on the internet about this.

    If it wasn't in your favour or you were in both sides of the fence then maybe ask ;)
     
  3. neK

    neK Member

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    No harm is seeking additional opinions. Never know when you might miss something. Nothing worse than thinking you know everything.... no one can know everything.

    So can anyone else see any issues?
     
  4. chilliblue

    chilliblue Member

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    Just ensure that the deposit is not released to the vendor early and see if your sister can lock in some dates to inspect the property during the delay so she can attain quotes if needed.
     
  5. thatbum

    thatbum law talking guy

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    Not really. If you can't think of anything that affects your sister, I don't think taking into account some speculative theory about the vendor's position should really be given much weight anyway.
     
  6. Scott No Mates

    Scott No Mates ...and people wonder why?

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    If she's happy and not under pressure to move, is there really an issue?

    From another perspective, if they said nothing and delayed settlement by the purchaser having to serve notice you'd be in a worse position ie under stress.
     
  7. neK

    neK Member

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    Its more or less making sure we cover all bases and don't start something we that would work against us. :)
    Thanks guys.
     
  8. Propertunity

    Propertunity Real Estate Buyers Agent

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    You can't decline their request anyway. In the standard NSW contract for sale, there are virtually no penalties for a vendor delaying settlement (they hold all the cards), unlike a purchaser who can get hit with penalty interest for doing the same thing.
     
    neK likes this.
  9. neK

    neK Member

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    Ahh yes that is true Alan.
    Thanks for reminding me of that Alan. :)
     
  10. Propertunity

    Propertunity Real Estate Buyers Agent

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    You're welcome Ken :)
     
  11. DaveM

    DaveM KFC Buyers Agent

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    Where is the property? Some states calculate land tax on EOFY and not EOCY, ensure you dont get stuck with a land tax obligation
     
  12. travelbug

    travelbug Member

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    I was thinking of the CGT bit. I'd assume they think it will occur next year.
     
  13. Jamie M

    Jamie M Mortgage Broker - Oz Wide

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    I'd ask why.

    If it's not causing your sister any issues then I can't see a problem with it.

    Cheers

    Jamie
     
  14. wylie

    wylie Member

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    This was my initial thought too, as in Queensland whoever "owns" the land on 30 June is up for land tax. But pushing the date back to July wouldn't help the vendor as they would want to settle before 30 June.

    I'm wondering if they think settling after July 1 will put the purchase into the next financial year (wrong).
     
  15. neK

    neK Member

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    Property is in NSW. Made sure the contract was crossed "NO" on the land tax section. Also making sure solicitor gets a clearance certificate.

    That's what im thinking.

    Also curious, when selling a place (in NSW), does it automatically count as notification to the tenant that they have to leave by settlement? Or does a 90 day rule still apply (assuming tenant is out of lease).
    Eg. Tenant is on a month to month, on 1 July 2015, i decide i want to sell, sign everything up with the real estate agent, give the tenant notice. Say i sell in a week, go through the standard 6 week settlement, does the tenant need to move out by the end of settlement (in this example it would mean they only got 7 weeks notice instead of the usual 13 weeks).
     
    Last edited: 28th Apr, 2015
  16. Scott No Mates

    Scott No Mates ...and people wonder why?

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    Shortened notice provisions apply when selling properties on holdover.
     
  17. cadence

    cadence Member

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    Wouldnt be an issue for me
    youve locked in the property at that price and get to delay paying mortgage