Notice to Complete in NSW: What You Need to Know
10th October, 2024
In NSW, a Notice to Complete is a vital tool in conveyancing contracts. It helps manage delays during property settlements. This notice allows one party—the Vendor or Purchaser—to enforce contract completion if the other fails to meet the settlement date. Here’s a closer look at how Notices to Complete work and their implications for property transactions.
What is a Notice to Complete?
A Notice to Complete in NSW is a formal document issued by either the Vendor or Purchaser when the other party does not settle on the agreed date. This notice provides a deadline—typically 14 days—for the receiving party to fulfil their contractual obligations. If they fail to do so, the party who issued the notice can terminate the contract.
Standard Terms for Notices to Complete
The 2022 Contract for the Sale of Land includes standard terms allowing either party to issue a Notice to Complete if the other does not meet the settlement date. This provision ensures property transactions are finalised promptly, reducing unnecessary delays. Special conditions within contracts can clarify how and when these notices can be issued, including consequences for non-compliance.
Issuing a Notice to Complete
Before issuing a Notice to Complete in NSW, the sender must be “ready, willing, and able” to settle. This means having all necessary documents, finances, and approvals ready. The notice must adhere to the specific provisions in the contract. Failing to follow these can render the notice invalid, jeopardising the right to enforce the contract.
Consequences of Issuing a Notice to Complete
The outcomes after issuing a Notice to Complete depend on whether the receiving party completes the settlement within the notice period:
- If the Vendor issues the notice and the Purchaser does not comply:
- The Vendor may terminate the contract.
- They can retain the deposit (usually 10% of the purchase price) – although usually the Vendor has to sue the Purchaser for the deposit – it is not automatically handed over.
- They can claim damages, including legal fees and interest.
- They may re-sell the property at market value.
- If the Purchaser issues the notice and the Vendor does not comply:
- The Purchaser can terminate the contract.
- They may recover the deposit and potentially claim damages, depending on contract terms.
Challenging a Notice to Complete
A party receiving a Notice to Complete can challenge it if certain conditions exist. For instance, if the issuing party was not “ready, willing, and able” to settle at the time of the notice, it may be invalid. Additionally, if an extension for settlement was agreed upon, issuing the notice prematurely could also invalidate it.
Sometimes, it may be beneficial for the issuing party to allow more time for settlement instead of terminating the contract. If the Vendor has invested significant time and resources, finding a new buyer might be more costly than allowing a delayed settlement.
Alternative to Issuing a Notice to Complete
For Purchasers seeking to compel the Vendor to complete the contract, a court order for specific performance is an option. However, this process can be costly and time-consuming, making it less appealing for many buyers.
Key Takeaways
- A Notice to Complete sets a formal deadline for finalising contract settlement.
- If the receiving party fails to complete within the notice period, the issuing party may terminate the contract.
- The process surrounding Notices to Complete involves legal and financial implications, so it should be approached carefully.
- Legal advice is essential when issuing or challenging a Notice to Complete to protect your rights.
Navigating property transactions can be complex, especially regarding a Notice to Complete in NSW. At Bangalow Conveyancing, we specialise in conveyancing throughout NSW and have the expertise to help you manage these challenges effectively.
Contact us today on 02 6687 0548 to discover how we can make your settlement process seamless and stress-free.
