What Happens If the Buyer Wants to Change the Settlement Date?
/Is the Settlement Date Legally Binding?
Yes. In Victoria, the contract of sale includes a fixed and binding settlement date. Under the standard Law Institute of Victoria (LIV) contract, time is of the essence. That means:
The purchaser is contractually required to complete settlement on the due date
There is no automatic right to extend settlement
Any change to the date requires written agreement from both parties
Can the Buyer Request an Extension?
Yes—but only by negotiation, not by right. If the purchaser’s bank isn’t ready, if paperwork is delayed, or if they haven’t finalised their sale, they may ask for more time.
As the vendor, you can:
Grant the extension, either with or without conditions
Refuse the extension and require settlement to proceed on time
Allow settlement to proceed late subject to penalty interest
At Victorian Property Settlements, we advise vendors to never assume a request for an extension is reasonable, safe, or enforceable.
Why Granting an Extension Can Be a Mistake
“It’s not just a delay—it can become a disaster,” says David Dawn, Licensed Conveyancer at Victorian Property Settlements.
Here’s why extending the settlement date is not always in your interest:
🔹 1. It Can Be Expensive
You may incur additional mortgage repayments, rates, or insurance costs
If you've already bought another property, your funding may be affected
Removalists, cleaners, and utility disconnections may need to be rescheduled (and paid for again)
🔹 2. It Delays Access to Funds
Your sale proceeds remain locked in trust
You cannot discharge your mortgage or finalise other transactions
Any plans dependent on settlement (e.g. moving, buying elsewhere) are stalled
🔹 3. It Can Still Fail
A 7 or 14-day extension may not solve the purchaser’s problem
Banks can continue to delay, especially on Fridays or during end-of-month periods
A delayed settlement is not a guaranteed settlement
What If You Refuse?
If the buyer cannot settle and you refuse to extend:
You may issue a Notice of Default
The purchaser then has 14 days to settle and pay penalty interest (currently 12% p.a.)
If they still fail, you can rescind the contract, retain the deposit, and pursue losses
This process is effective—but must be managed carefully and professionally.
Should Vendors Ever Agree to Extend?
Only when:
There is clear evidence the purchaser’s issue will be resolved within days
The costs of delay are paid upfront or covered by penalty interest
The new date is fixed, non-negotiable, and your rights are preserved in writing
And even then, only with:
A formal extension agreement
Confirmation from the purchaser’s lender or broker
Advice from your conveyancer confirming the risk has been properly managed
David Dawn’s Recommendation to Vendors
“We don’t recommend extensions lightly. If a buyer isn’t ready, there’s usually a reason—and it’s rarely a good one. The safest approach is to enforce the contract unless you're 100% confident they can settle within a few days.”
At Victorian Property Settlements, we:
Review all extension requests and assess risk
Draft formal extension or licence agreements
Calculate and demand penalty interest where applicable
Advise vendors of all risks, costs, and alternatives
Final Thoughts
Settlement dates are not suggestions—they are legal commitments. If a buyer asks to delay, don’t feel pressured to say yes. Delays can cost you time, money, and control—and still lead to failure.
Selling? Want Advice on a Buyer’s Request to Extend?
Victorian Property Settlements – Trusted by Victorian vendors for over 25 years.
📍 Frankston | 📞 03 9783 0111 | ✉️ david@quick32.com
🌐 www.victorianpropertysettlements.com.au