Key Takeaways
- A notice to complete is a legal document that requires both parties to follow the terms of a contract by a certain date.
- It is given out when one side, either the buyer or the seller, doesn't meet the contract's agreed-upon settlement date.
- A notice to complete usually gives you 14 days, but you can ask for an extension of up to 28 days. If you don't comply, the contract could be cancelled, and you could face legal and financial problems.
- If you don't pay or finish a deal by the agreed-upon date, you may get a notice to complete as a buyer. If you don't leave the property or give a clear title on time, you may get one as a seller.
- Not being clear, administrative errors, and having disagreements over contracts can also lead to a notice to complete.
- If you got one, the first thing you should do is read it carefully and look for any mistakes. Talk to a legal professional right away and keep talking to the other party. The most important thing is to act quickly and with purpose.
- If you think the notice gives you too little time, has mistakes in it, or the party that sent it breaks the contract, you can challenge it.
- If you find the right financing for the property, you can avoid a notice to complete as a buyer. You should also make sure that you have all the necessary documents.
- As a seller, if you get your titles and deeds ready early and leave the property on time, you can avoid getting a notice.
If you’ve ever bought or sold a property, you may have encountered a notice to complete. You might have gotten one, or you might need to issue one. It’s important to know what a notice to complete is, how it works, what happens if you get one, and how to fight one if you need to.
Understanding the Notice to Complete
A notice to complete is a legal document that tells someone to finish a contract for sale. It is usually given when one side, either the buyer or the seller, doesn’t meet the agreed-upon date for settling.
It gives one party a reasonable amount of time to meet their contractual obligations. If the deadline isn’t met, the person who doesn’t follow the contract could be fined or sued.
What Is the Timeline for a Notice to Complete?
The timeline for a notice to complete is commonly 14 days from when it was sent. In some cases, the person who gets the notice can ask for an extension of up to 28 days. The exact time frame for a notice to complete may differ based on the contract’s specific terms and any state laws that apply.
The settlement goes through if the person who got the notice does what they were told to do within the time limit. If not, the aggrieved party can end the contract and ask for damages.
Common Scenarios Requiring a Notice to Complete in Australia
Here are some of the most common scenarios where a notice to complete is required:
Buyer Fails to Secure Financing
One of the most frequent reasons for issuing a notice to complete is when a buyer is unable to secure the necessary funds to settle the transaction by the agreed settlement date.
Seller Does Not Provide Vacant Possession
In a property transaction, a buyer may issue a notice to complete if the seller fails to move out of the property or remove tenants in time.
Title or Ownership Issues
If the seller of a property is unable to deliver a clear and marketable title to the buyer by the settlement date, the buyer may issue a notice to complete.
Miscommunication or Administrative Errors
Sometimes, delays occur because of miscommunication or administrative mistakes by one of the parties or their representatives. These errors may lead to a notice to complete being issued.
Contract Disputes
Any dispute regarding the contract can cause a delay in settlement and can be the reason for issuing a notice to complete.
Why a Notice to Complete Is Issued
When one party is ready to settle but the other hasn’t met their end of the deal, usually because of payment delays, vacant possession, or problems with the paperwork, they get a notice to complete. It sets a final deadline and makes it clear that there will be legal consequences if the issue isn’t fixed quickly.
Common Scenarios Requiring a Notice to Complete in Australia
Here are some of the most common scenarios where a notice to complete is required:
Buyer Fails to Secure Financing
One of the most common reasons for sending a notice to complete is when a buyer can’t get the funds that they need to close the deal by the agreed-upon date.
Seller Does Not Provide Vacant Possession
If the seller doesn’t move out of the property or get rid of tenants on time, the buyer can send a notice to complete during a property transaction.
Title or Ownership Issues
If the seller can’t give the buyer a clear and marketable title to the property by the settlement date, the buyer can send a notice to complete.
Miscommunication or Administrative Errors
Sometimes, delays happen because of miscommunication or administrative mistakes by one of the parties or their representatives. These mistakes can lead to the buyer or seller issuing a notice to complete.
Contract Disputes
Any dispute regarding the contract can cause a delay in settlement and can be the reason for issuing a notice to complete.
What’s in a Notice to Complete?
Here’s what you’ll commonly find in a notice to complete:
- Header Information: The title “Notice to Complete” clearly marked.
- Parties Involved: Names and contact details of both the sender and recipient.
- Details of the Contract: Reference to the original contract, including dates and key terms.
- Reason for the Notice: A clear explanation of the non-compliance issue.
- Deadline for Compliance: The specific date by which the recipient must complete their obligations.
- Legal Consequences: A statement of the consequences of non-compliance, such as termination of the contract.
- Signature and Date: The sender’s signature and the date the notice was issued.
Notice to Complete Template
To: [Recipient’s Full Name and Address]
From: [Sender’s Full Name and Address]
Subject: Notice to Complete under the Contract of Sale dated [Insert Date of Contract]
Dear [Recipient’s Name],
This is a formal Notice to Complete under the Contract of Sale between [Buyer’s Name] and [Seller’s Name] for the property located at [Property Address].
The sale of the property did not occur on [Time and Date in Contract] as agreed upon.
The [Sender] is ready, willing, and able to complete.
The [Recipient] is required to complete the settlement of this property transaction by [Insert Deadline]. Failure to do so will result in the termination of the contract and may incur additional penalties.
Please contact [Sender’s Contact Information] for any clarifications or arrangements.
Sincerely,
[Sender’s Full Name]
[Sender’s Signature]
How to Respond to a Notice to Complete
If you’ve received a notice to complete, you need to act quickly and decisively to avoid serious consequences. Follow these steps:
1. Carefully Review the Notice
The first step is to thoroughly examine the notice and understand its contents.
- Key Details to Check:
- The issuing party and their legal representatives.
- The specified obligations you must fulfil (e.g., payment, document submission).
- The timeframe for compliance.
- Potential consequences of non-compliance (e.g., contract termination, penalties).
- Look for Errors:
Verify whether the notice complies with the terms of the contract and applicable property laws. Errors or omissions could make the notice invalid.
2. Consult Your Legal or Professional Advisor Immediately
Get legal advice from a solicitor or conveyancer who knows a lot about property or commercial law. Your advisor can tell you if the notice is real and can be enforced by law. They can help you figure out what your rights and duties are under the contract. They can also figure out possible defences if the notice is not valid or is unreasonable.
3. Communicate with the Other Party
It’s very important to contact the other party right away after you get a notice to complete. Doing this can help you talk about possible solutions that can prevent any legal or financial effects. If you can’t meet the deadline, you can ask for an extension. Make sure you have good reasons to support your case. You could also suggest other ways to solve the problem that would work for both sides without escalating the matter.
4. Take Immediate Action to Fulfill Obligations
It’s important to act quickly to make sure you complete the contract on time. If you haven’t paid yet because you don’t have the funding, get financing right away. If you haven’t sent in the required papers, make sure you get them together and send them in on time. You can get help from professionals like your lawyer, broker, or conveyancer to take care of certain things quickly.
5. Challenge the Notice if Necessary
You can challenge the notice if you have talked to a professional about it and determined that it is invalid, unreasonable, or was given in bad faith. You can challenge the notice if the deadline is unreasonable, there are mistakes or missing information on it, or if the person who issued it didn’t meet their own contractual obligations.
What Happens if You Fail to Comply?
Failure to comply with a Notice to Complete can lead to serious repercussions, such as:
- Termination of the Contract: The other party may terminate the agreement and retain any deposits paid.
- Financial Penalties: The non-compliant party might be liable for damages, including legal fees and potential losses incurred by the other party.
- Legal Disputes: Non-compliance can escalate to legal proceedings, resulting in additional costs and delays.
Challenging a Notice to Complete
A notice to complete is a legally binding document, but you can contest it under certain conditions. If you think the notice is wrong or unreasonable, you might have a reason to fight it. Here are some common reasons to contest a notice to complete:
- Unreasonable Timeframe
A notice to complete usually gives a standard amount of time (like 14 days), but the time must be reasonable given the situation. For example, if there are delays that weren’t planned for, the time frame might be seen as too strict.
- Breach by the Issuing Party
The notice may not be valid if the person who sent it has not followed through on their own contract. For instance, a seller who sends a notice without giving the title deed may be a good reason for the notice to be invalid.
- Errors in the Notice
If the notice has mistakes like wrong dates or details, or if it doesn’t say what will happen if you don’t comply, it might not be valid.
How to Challenge a Notice to Complete
If you really think the notice is invalid, you should talk to a lawyer who knows a lot about property law first. They can look over the notice and decide if it is valid based on the law and the terms of the contract. Help them find any mistakes in the process, unfair terms, or violations by the party that issued the notice.
If the notice has small mistakes, you might want to talk to the person who sent it about changing the deadline or coming to a mutual agreement. At this point, it’s very important to communicate clearly and well. You may need to take legal action if the notice is not valid and the person who issued it won’t withdraw.
Tips to Avoid Receiving a Notice to Complete
For Buyers
- Find the Right Financing: Find lenders that can meet your timeline to make sure that you can pay within the agreed date on the contract.
- Check Documentation: Make sure all personal and financial documents are accurate and ready.
- Plan for Financial Setbacks: If you’re managing tax debt or cash flow challenges, arranging a director penalty notice payment plan early can prevent delays that risk triggering a notice to complete.
For Sellers
- Prepare Early: Make sure title deeds and legal documents are in order before listing the property.
- Vacate Promptly: Plan your move to vacate the property by the agreed settlement date. If you have tenants, make sure that they move out of the property in time.
- Communicate Clearly: Stay in constant communication with the buyer or their representatives.
In Conclusion
A notice to complete is an important part of property transactions in Australia because it makes sure that everyone settles on time. Knowing how this notice works, when it will come, and why you might receive one can help you avoid legal and financial problems.
This is especially important if you’re trying to follow contracts under notice to complete NSW law or want to challenge terms by issuing one.
If you have received a notice to complete or think you might need one, it is best to get professional help right away.
Avoid a Notice to Complete
One of the most common reasons for receiving a notice to complete is a payment delay. You can avoid this by getting the best financing that meets your timeline. With Dark Horse Financial, you can get the funds you need to complete contracts within the time frame required. Reach out today to learn more.
Disclaimer: The information on this page does not take into account your personal circumstances, is not advice and should not be relied upon for any purpose. You should always obtain professional advice before making any decisions.
