It is pretty normal for property lawyers to see a rush of Contracts in late November or early December, in anticipation of Christmas. Quite simply, it is very convenient to use the Christmas break as an opportunity to move.
But what happens if the finance date or the time for settlement falls over Christmas or New Year? Do the solicitors and banks still have to work?
Lucky for us, we get a break as well! However, this means that you may need to make alternative living arrangements as settlements cannot happen during most of the Christmas and New Year period.
What happens to critical dates that fall on non-business days?
Under the standard REIQ contracts (whether residential or commercial), they provide that if a critical date falls on a non-business day, then it must be done on the following business day.
This makes sense. If you are required to notify the seller whether or not you have finance on a Saturday, then this held over until Monday (when everyone is back working).
What happens to critical dates during the Christmas/New Year period?
‘Business Day’ is usually defined as meaning – a day other than;
- Saturday or Sunday;
- A public holiday in the place for settlement; and
- A day in the period 27 to 31 December (inclusive).
The effect of excluding 27 – 31 December, means that no critical contract dates can fall between 25 December – 1 January. If anything is required to be done during this time, it will be required to be done from 2 January onwards (depending where the weekend falls each year). However, for 2017, it will be from 3 January onwards as 2 January will still be a public holiday.
Usually this extension means that there is a pile up of critical dates and settlements all due first day back in the New Year. From a practical point of view, all the work to prepare for settlement will need to be finalised by the banks and conveyancers prior to Christmas, to ensure a smooth settlement in the New Year. However, in saying this, not all banks will be ready to book before the Christmas holidays commence as loan documents may not all be returned or verified by the banks on time. It is crucial that you try to have your bankers and brokers escalate matters with your banks to try and avoid any settlement delays.
If it is possible, we recommend that parties agree for contract dates to fall a couple of days into the new year, or a week into the new year, and not the first day back. That way there is a better chance that parties will be in a position to settle and banks are in a position to provide funds.
Do you need more information on contract dates?
Please contact our team today should you have any questions regarding Contract dates or any other property related legal issues.
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