Settlement and asking for extension

Hi PC'ers,

Wondering if youve gone into an unconditional contract about to settle mid August in Melbourne

Due to restructuring our finances this is taking longer then usual.

We are asking for an extra month, but we have not heard back from the vendor in the last three weeks.

Do they have a reasonable amount of time to respond?

Any options or advice, or property lawyers i can contact as I am using a conveyancer?

 

Can you please elaborate further on what you mean by 'not heard from them in three weeks'?

Did they say they'll get back to you but you haven't heard back from them since or did they not even reply to your request?

If the latter then the first thing I would do is light a fire under your conveyancer's bottom! I would've suggest getting a new conveyancer but at this stage that would likely make the situation worse. It shouldn't take three weeks to get a reply for such a request as it's not unusual to ask for an extension. Get your conveyancer to re-establish communication and get some answers ASAP!

Good luck.

 

In negotiations, there is a concept called Give/Get.

So, if the vendor gives you a time extension, what do they get in return?

 

No requirement for them to respond at all as it sounds like the contract has been entered into.
With no response you should consider your request rejected until you hear otherwise.

 

Another concept in negotiation is called "ball in court". That is, always keep the ball in your court. Otherwise, you lose control of proceedings.

Did you specify a time when the vendor had to reply to your request?

 

Would no response means you agree actually work here?

 

There is a legal contract in place.
It cannot be varied unless both parties agree.
“No response” cannot be assumed to mean anything - it means the request has not (yet) been agreed.
Marg

 

The vendor not responding can be interpreted in Victoria as they don't agree to give a free pass.

The most likely outcome is that the vendor will charge penalty interest and costs until the settlement takes place. If it goes on too long, they may issue a rescission notice, not sell the property and the deposit will be forfeit.

 

not heard from them in three weeks, we have contacted them twice within the three weeks but no answer or response.

We are in need of an additional month to complete the transaction.

 

What is the problem you had run into, could that potentially be addressed? A month is a fair amount of time.

 

Yes I have, I have asked for an additional month.

 

Valuation came short and we had to restructure the deal to make it happen.

 

What are you planning to do if the vendor says no?

 

How many valuations did you order? Did they all come in low?

 

That is what you asked for but, by the sounds of it, you didn’t specify a deadline for the vendor to reply to your request.

To me, you have lost control of the negotiations, the ball is now in the vendor’s court and they are under no pressure to return it to your court.

I would not be surprised if the vendor does not respond or, if they do, they will come in hard.

I don’t wish to be harsh but, from what I read, you created the situation. I would be meeting with my property lawyer ASAP, finding out my options and reclaiming control.

 

Hi this is not unusual. You cannot assume that they have accepted or rejected your request. Your options are limited however you have done the right thing by requesting a penalty free extension to settlement early. Your worst case scenario is that they ignore you and the day after the settlement date prescribed in the contract of sale the vendor issues you a Default Notice. If this happens you will have 14 days to settle, if you don't settle within 14 days of the date the Default Notice is issued you will forfeit your deposit and you could be sued for damages if the vendor subsequently sells the property to someone else and makes a loss which is greater that the forfeited deposit.

This is the legal worst case scenario. In all the years I have practiced conveyancing I have never had this occur. The situation you find yourself in is not uncommon. Every developer vendor is different and no one can definitively say what they will do. I can tell you what is a very common response is that the vendor grants a week penalty free and then if you go past this they charge you penalty interest the amount of which will be prescribed in the contract of sale. They will calculate this from the original settlement date.

If you have doubts s whether your conveyancer is competent or honest these are some options you may consider;

• Politely tell you conveyancer that you are anxious not hearing form the vendor and could the conveyancer kindly provide emails confirming that the vendor has been contacted. If your conveyancer is doing the right thing they will not hesitate to forward them to you. If they refuse or do not immediately respond to you contact the Australian Institute of Conveyancers and ask them for advice and referral to a competent ethical conveyancer.
• If you purchased the property through a real estate agent ask them to contact the vendor on your behalf.
• Contact the vendor direct. There legal adviser will tell you that you should go through your legal adviser. You should tell them you have and what response you have received from them.

 

an actual settlement!

 

The buyer is already contracted to give the vendor that.

Got to give something extra.

 

Sorry what do you mean?

 

I believe @TMNT means, if the vendor agrees to a settlement extension, the buyer will then be in a position to actually settle.

To me, that is a “give” BUT no get as, if the vendor gives an extension, they don’t get anything (extra) in return.

IMHO, the buyer needs to offer up something as an inducement/reward/benefit to the vendor for agreeing to the extension. An “actual” settlement is to offer nothing as the vendor already has the buyer contracted to an unconditional settlement.