Our Client 

Our client was an eager home-buyer who had signed a Contract of Sale to purchase an off-the-plan property, and wanted to move into their home as soon as possible.  

The Challenge 

Our client was eager to move into their off-the-plan home as soon as physically possible, even before settlement. Usually, moving into a home before settlement can be arranged under a simple licence agreement between the Vendor and Purchaser. However, though our client’s home appeared to be fully built, the property title was actually yet to be registered and a certificate of occupancy was yet to be issued. Both of these things needed to occur before our client could move in. 

Our client faced a second challenge in the form of lapsed finance approval. Eager as they were to purchase their home, their mortgage broker had applied for their home loan too early, and finance approval (which usually lasts only 3 months) had lapsed before settlement could occur. When they tried to reapply for their loan they faced a more difficult approval process, as interest rates had increased, and they had transitioned to self-employment. 

The Solution 

Our main aim was to improve our client’s home-buying experience by managing their expectations, and keeping them well informed of how things were progressing. We reassured them that it was normal for an off-the-plan conveyance to be a long process, and buyers often have little control over the timeline.  

After obtaining agreement from the Vendor we drafted a licence agreement in preparation for our client to move in as soon as realistically possible – as soon as the Certificate of Title and Certificate of Occupancy were issued.  

We also kept the Vendor well informed of our client’s finance application progress as it developed, and applied for extensions to the finance clause and settlement date as required by the Contract of Sale within healthy timeframes. 

The Win 

Our Conveyancing Director Emma coordinated all the players involved to get the transaction over the line. 

Our client was able to move into their home before settlement under the licence agreement we had drafted.  

Our work liaising with the Vendor about our client’s finance also meant our client was granted settlement extensions they needed to obtain their loan, with as few penalty infringements as possible. vendors can charge financial penalties for delays in settlement caused by purchasers, but our negotiations kept these charges to a minimum. 

We also avoided the vendor issuing a notice of default on our client for delaying settlement – a notice of default would mean our client had to vacate their home and forfeit their deposit. Our management and negotiation with the vendor prevented this from happening.

The Lessons 

• Make sure you understand the timeline for your purchase – off-the-plan purchases often take place over the course of multiple years, and progress is at the whim of developer and vendors’ timeframes. Your conveyancer plays a big part in ensuring you understand the process, have realistic expectations and avoid disappointment. 
• Make sure you have a competent mortgage broker who understands your purchase situation and keeps abreast of any developments which could impact your borrowing capacity. Finance delays can result in penalty costs, and sometimes result in a notice of default – costing you your home and deposit entirely.  
• Ensure your conveyancer and mortgage broker communicate well and understand each other’s timeframes.