What Happens If Settlement Is Delayed in NSW?
A missed settlement date doesn’t end the contract, but it starts a clock. Here’s how a notice to complete works, who pays for the delay, and what to do if your settlement is running late.
What happens if settlement is delayed in NSW?
The contract carries on. Under the standard NSW contract, the settlement date is fixed but not essential, so missing it doesn’t let either side walk away. What it does is let the party who was ready serve a notice to complete, which sets a new deadline that is essential. Miss that one and the other side can end the contract. Meanwhile, the party causing the delay usually pays for it.
At a glance
- Can I walk away if the other side misses settlement? Not straight away. A missed settlement date on its own doesn’t end the contract. You first need to serve a notice to complete.
- What is a notice to complete? A formal notice that sets a new settlement date and makes it essential. If that date is missed, the party who served it can terminate.
- Who pays for a delay? Usually the party who caused it. If the buyer is late, most contracts make them pay interest on the balance of the price for every day of delay.
Why a missed settlement date doesn’t end the contract
The 2026 edition of the NSW Contract for the sale and purchase of land sets settlement (the contract calls it completion) at the 42nd day after the contract date, which is the day contracts are exchanged, unless a different date is written in. Clause 15 says the parties must settle by that date, and if they don’t, a party can serve a notice to complete.
The key is clause 21.6: unless the contract says otherwise, the time by which something must be done is fixed but not essential. In plain terms, a missed date is a breach, but it isn’t serious enough on its own to cancel the deal. That protects both sides from losing a property, or a sale, because a bank was a day late.
What people think
“They missed settlement, so the deal’s off.”
“If the buyer’s late, I can relist tomorrow.”
“If the seller’s late, I get my deposit back.”
What actually happens
The contract is still binding on both sides. Nobody can terminate, relist or demand their deposit back just because the date passed. The first formal step is a notice to complete, and only if that deadline is also missed can the contract be ended.
Why settlements get delayed
Most delays are administrative rather than anyone trying to get out of the deal, and most can be avoided with the steps in our guide to preparing for settlement in NSW. The common ones we see:
- The buyer’s lender isn’t ready. Loan documents unsigned, a valuation issue, or the bank not booked into PEXA in time.
- The seller’s bank isn’t ready to discharge the mortgage. Discharge forms lodged late are one of the biggest causes of delay on the selling side.
- Paperwork served late under the contract. If the seller serves a strata information certificate late, the buyer doesn’t have to settle until 7 days after. A late ATO clearance certificate gives the buyer 5 business days.
- Linked sales. A buyer relying on their own sale, where the other settlement slips.
- System outages. If PEXA, the Land Registry, Revenue NSW or the Reserve Bank’s systems are down at settlement time, the contract says that’s not a default by either party.
How a notice to complete works in NSW
The settlement date passes
One side isn’t ready. The contract stays on foot, and the delay is a breach, but not yet a reason to terminate.
The ready party serves a notice to complete
Only a party who is ready, willing and able to settle, and isn’t in default themselves, can serve one. It’s served through the conveyancers, not the agent.
A new settlement date is set, and it’s essential
Some contracts fix the notice period in a special condition. If yours doesn’t, the notice must allow a reasonable time, and in NSW 14 days is generally accepted as reasonable.
Settle by the new date, or the contract can be terminated
If the party in default misses the notice deadline, the other side can serve a notice of termination.
“A missed settlement date is a problem. A missed notice to complete is the end of the contract.”
Who pays for a delayed settlement?
The printed contract doesn’t include late settlement interest, sometimes called penalty interest. If the buyer can’t settle on time, it comes from the special conditions, which are usually drafted by the seller’s conveyancer, so they often only work one way. Check yours before you sign.
| If the buyer is late | If the seller is late | |
|---|---|---|
| Daily interest | Most contracts require interest on the balance of the price for each day of delay | Usually no automatic interest unless a special condition provides for it |
| Notice to complete costs | Many contracts add a fixed fee toward the seller’s legal costs of issuing the notice | Depends on the special conditions |
| Other losses | Seller may claim costs the delay caused them, such as bridging finance on their next purchase | Buyer may claim costs the delay caused them, such as extra rent, storage or removalist fees |
| If the notice deadline is missed | Seller can terminate, keep the deposit (up to 10%), resell and sue for any shortfall | Buyer can terminate, get the deposit back and sue for damages |
| Item | Amount |
|---|---|
| Purchase price | $750,000 |
| Deposit paid at exchange | $75,000 |
| Balance of the price | $675,000 |
| Late settlement interest rate | 10% a year |
| Interest per day | $184.93 |
| Interest for 3 days late | $554.79 |
The buyer’s bank isn’t ready on settlement day and settlement happens 3 days late. That’s before any notice to complete fee. A short delay is annoying. A long one gets expensive quickly.
What to do if you think settlement will be delayed
Tell your conveyancer the moment you know
Before the date, not on the day. A delay flagged early can usually be solved by agreeing a short extension in writing, often with no interest or notice fees at all.
Check your deposit bond, if you used one
If settlement is running late and the deposit bond is close to expiry, the contract requires a replacement bond to be served at least 7 days before it expires. Miss that and the seller can terminate.
Sellers: keep your insurance going
Legal title doesn’t pass until settlement actually happens, and the contract warns sellers to keep their insurance until completion. Don’t cancel the policy on the original settlement date.
Buyers: don’t move in early to fill the gap
Moving in before settlement shifts the risk of damage to you and comes with strict conditions. If you need early access, it has to be agreed in writing first.
Check who’s charging what
If you’ve received a notice to complete or an interest demand, send it to us. We’ll check it was validly served, that the period is reasonable and that the amounts match your contract.
Settlement looking shaky? Call us before the date, not after. Most delays are cheap to fix early and expensive to fix late.
The short version
A missed settlement date doesn’t end a NSW contract. The party who is ready can serve a notice to complete, usually giving 14 days, and that new date is essential. If it’s missed, the contract can be terminated. Until then, the party causing the delay generally pays for it, most often through daily interest on the balance if the buyer is late. The best fix is speaking up early and agreeing an extension before the date passes.
Settlement running late?
Talk to Justin, Julie, Amanda or Nicole today. We’ll tell you where you stand, what it’s likely to cost and how to get it settled.
