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Wk 8: Contract to Settlement, Pt 2 - Coggle Diagram
Wk 8: Contract to Settlement, Pt 2
Paper Settlement
Settlement = compete conveyance from one party to the other
- when title is given and accepted (buyer WAIVES right to object to defects in title)
- Cl 5.3: payment on settlement date in exchange for transfer documents and
- instrument(s) to release encumbrances
- (if requested no less than two days before settlement) keys
- tenancy documents
Tender
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Each party must be ready, willing and able to settle on the date
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Failure won't be excused unless eg the other party intimates that tender will be futile: Foran v Wright
At common law - solicitor does not have authority to give/receive a discharge of the obligation to pay - need written authority to accept purchase money
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If no REIQ, buyer needs a written direction from seller/seller's solicitor to disburse funds at settlement
E- Conveyancing
- PEXA, Sympli, LexTech
- Process discussed LCQ 7.3
- Obligations = dependent and concurrent BUT
- NO physical act of tender
- Seller's ability to deliver a transfer capable of regn (thus good title) requires BOTH parties to cooperate and digitally sign the electronic workspace
- Settlement depends on the computer systems (PEXA, Land Registry, RBA, Office of State Revenue) being operable
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Electronic Settlement, REIQ
- Buyer deemed to comply with obligation to pay by cheque if pays via PEXA
- Seller deemed to comply with obligation to deliver title/transfer if completes and signs e-transfer and form 24 and release of mortgage provided in the workspace prior to settlement
- Where documents or other 'things' not suitable for electronic lodgement, Seller's solicitor must:
- confirm they hold
- undertake to send to buyer no later than the business day after settlement
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Possession
Implied condition if the Reference Schedule is left blank, then vacant possession will be given at Settlement
Handover of keys/cards = delivery
Vacant Possession
Ibrend Estates BV v NYK Logistics (UK) Ltd
- More than mere absence of people
- purchaser can assume/enjoy immediate and exclusive possession occupation & control
- Empty of chattels
- But this only breached if chattels left substantially prevent or interfere with the enjoyment of the right of possession of a substantial part of the property (Q of fact in each case)
Cumberland Consolidated Holdings Ltd v Ireland
- This is the exception rather than the rule
- Normally buyer accepting possession would either
- waive right to claim damages
- ask for (cannot insist on) reduction in price to cover cleaning expenses
Lawful Use
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No compensation is payable if the use is not lawful (seller does not warrant that this is lawful, cl 7.4(5))
BUT buyer can terminate if, eg, property not lawful under a town planning scheme, cl 7.7(1)(a)
ALSO it is a failure to provide possession: If a certificate of classification is required for lawful occupation and this is not provided. A breach of cl 5.5 - seller not providing LAWFUL POSSESSION (can terminate)
Chattels. Property
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5.5 at Settlement:
- Must give vacant possession of the Property (including Improvements)
- Titles to Included Chattels passes
- Reserved items on property deemed abandoned
- If chattels included, buyer should search the PPSR! (security)(encumbrances)
Merger
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- Transfer is executed by seller
exchange of transfer and purchase price, after this time:
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Conveyance only set aside for more than defect in title or misdescription - need fraud, TFC, misrep, mistake
- Registration - true settlement
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Collateral Obligations
Registration of the transfer will NOT destroy and condition to which registration will not give effect:
- Warranties, collateral or other rights to the purchase money
- compensation given by the contract
- will all survive the merger
NB cl 7.5 claim to compensation - this will survive, but remember the buyer needs to be given written notice pre-settlement
- Limited only by Limitation of Actions Act upon the contract (6 years)
- But if fraud, misrep shown: no time limit
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