Settlement delays can happen even when everyone expects the transaction to complete on time. They are frustrating because they can affect moving plans, lender deadlines, sellers, agents, removalists and sometimes tenants.

A delay does not always mean the purchase is in trouble. Sometimes it is a document or funding issue that can be resolved quickly. But the contract may still set consequences for late settlement, so delays need to be taken seriously.

Why delays happen

Common causes include loan documents not being completed, funds not clearing in time, an outgoing lender not being ready to discharge a mortgage, final settlement figures being disputed, title issues, identity checks or a last-minute problem found during the final inspection.

Refinance settlements can also be delayed. Even though there is no seller, the outgoing and incoming lenders still need to coordinate payout figures, documents and settlement timing. If a refinance is linked to a purchase, that delay can affect the purchase settlement as well.

What happens next

Your conveyancer will usually work out which party is not ready, what is needed to fix the issue and what the contract says about delay. Depending on the contract and state or territory, there may be default interest, notices, extra costs or other consequences.

The sequence is usually: issue identified -> responsible party confirmed -> contract position checked -> lender or document issue resolved -> settlement rebooked -> parties updated.

Reducing the risk

Buyers can reduce the risk by signing loan documents early, completing identity checks, transferring funds before the deadline, responding quickly to requests and avoiding tight moving plans that rely on settlement happening at a particular hour.

This article is general information only and is not legal or financial advice. Settlement delay rights and costs vary by contract, state and territory, so buyers should get advice on their own transaction.