Time in a conveyancing transaction

Understanding TIME in real estate contracts of sale is very important. Ever heard of the term time is of the essence?

Although everything in a conveyancing transaction does happen very quickly, what time of the essence means in simple words are :- key dates and deadlines must be adhered to during the transaction otherwise the other party obtains a right to terminate the transaction.

For example, as a Buyer, if your contract notes you have to obtain finance approval by a certain time and date and you have not obtained it by such time and date, the Seller will have the right to terminate the transaction.

A good conveyancing team will stay on top of these dates, whether acting for the Seller or Buyer.

If, as a Buyer, you have not obtained the necessary approvals by the due date, then an extension should be requested from the Seller and granted by the Seller for the transaction to stay legally binding.

Valid reasons should always exist when requesting extension of time critical aspects in the conveyancing transaction. The other party will be within their legal rights not to grant the requested extension.

Other time critical aspects in real estate contracts are, but not limited to, Building and Pest conditions, Due Diligence conditions and obviously the Settlement Date.

What happens if a Buyer cannot settle (the day legal ownership is transferred from the Seller to the Buyer) on time?

Depending on the reason for the delay, if due to the Buyer’s ‘fault’ then usually the Buyer’s lawyer will request an extension of the settlement date. If an extension is granted, then by agreement between the parties’ settlement will occur on a later date. In certain circumstances the Seller may be entitled to apply a ‘penalty’ interest on the late settlement. Under certain circumstances the Seller may also have a right to terminate the transaction.

It is therefore very important to know and understand the time critical dates in your conveyancing transaction and to ensure you comply with those timeframes, if you do not then you may find yourself in a very uncomfortable situation with some serious legal consequences.

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Baldwins Lawyers provides conveyancing services and assists with family law, estate planning and probate matters across Queensland, including Gympie, Sunshine Coast, Brisbane, Gold Coast and also across New South Wales. Gympie based Solicitors – Our aim is to provide quality legal services and quality conveyancing services at fair and realistic prices.