A woman makes a settlement day checklist as she packs her belongings

Settlement day is the big day — after years of saving for a deposit, months of searching for the right property, and weeks of negotiating with your seller, you will finally have the keys to your dream home.

The settlement process is complicated and involves many moving parts, but at the end of this period, everything comes together on settlement day and the property will legally change hands. Provided, of course, that you’ve got everything in order.

Also read: What happens on settlement day?

On settlement day, your solicitor will hand over the balance of the purchase money to the vendor’s solicitor, and your lawyer authorises, on your instructions, the release of the deposit to the vendor.

In return, the vendor’s solicitor hands over to your solicitor the title deeds and documents transferring the title to you and arranging for the keys to be released. If you have arranged a loan to assist you with your purchase, then your solicitor will also hand over the title deeds to the lender’s solicitor as security for your mortgage.

Issues can arise around the settlement, so take note of the following checklist to minimise the potential for trouble.

Settlement day checklist

1. Confirmation of details

The first thing you will need to do is to confirm the date, time, and venue of the settlement of your purchase. On the morning of settlement, check the property to confirm that it is in the same condition that you saw it before the exchange of the contract

These exchanges will occur in a meeting between your conveyancer and the vendor’s conveyancer, and your lender’s representative might be present as well.

Normally you are not expected to attend the settlement, however, you may take any cheques required for settlement to your solicitor, or you can arrange to have these delivered the day before.

2. Settlement Statement

Prior to settlement, you should receive a statement from your solicitor, which shows the funds required for settlement, for your approval.

This statement can take a while before getting to you, as your solicitor will have to wait to receive information from the vendor’s solicitor, who is in turn waiting on receiving it from the seller’s lender.

3. Council rates

The settlement sheet will usually show the adjustment for local council rates — these rates are adjusted between the vendor and the buyer. At the date of settlement, the rates owed to the council are paid in full from the vendor’s money, and the buyer’s share is refunded to the vendor by means of an addition to the purchase price.

Your solicitor is likely to follow the usual process, and the local council will be notified that you’re the new owner of the property.

4. Water and sewer charges

Make sure you check your state for the relevant bodies that will make a charge for water and sewer availability.

The water rates usually run quarterly and, on settlement, will generally be paid by the end of the current quarter by the vendor.

These charges are adjusted between vendor and purchaser as of the settlement date. You will only pay rates and charges for the time after you complete your purchase, or after the time agreed with the vendor.

5. Strata levies

If you are buying strata properties like apartments and townhouses, you will also have to take care of strata levies.

Typically, strata levies run quarterly and, on settlement of your purchase, will be paid to the end of the current quarterly levy period by the vendor. After settlement, you will receive a written notice from the owners’ corporation, detailing the strata levies payable.

You may also request your solicitor to obtain an original certificate of currency of the owners’ corporation insurance before settlement, so you can confirm from your strata report that the building is insured. Sometimes, your lender may require evidence of the insurance being in place and will want their interest as mortgagee to be noted.

6. Registration fee

Where applicable, the vendor will allow you a credit for any registration fee that must be paid to the Land Titles Office for the removal of the vendor’s mortgage or other dealings from the title. Your solicitor may discuss with you any dealings that need to be removed.

7. Funds required

There are two scenarios that can play out here — if you have not arranged a loan, you will have to arrange for bank cheques for settlement. Alternatively, you may have cleared funds in an account that your lender is authorised to draw funds from.

On the other hand, if you have arranged a loan, your solicitor will usually ask your lender to deliver the cheques available from the proceeds of the loan to settlement. Your solicitor should have the lender cheques on the business day before the appointed settlement date.

It is important for you to make sure that all the information on the cheque is correct — if there are any mistakes, the settlement could be delayed and you could potentially incur interest and other fees under the contract.

8. Mode of payment

The vendor can determine how the balance of the purchase price must be paid on settlement, and this is normally done by directions for payment. For example, the vendor can ask you to provide cheques to pay the rates owing, to pay legal bills, to pay off a mortgage – but the money comes from the vendor’s sale proceeds, not out of your pocket.

9. Solicitor’s fees

You are likely to receive your solicitor’s tax invoice prepared in advance for the date of settlement. Your solicitor may provide a further tax invoice if there are any additional professional fees and/or disbursement incurred, as a result of additional legal services required by the settlement.

10. Keys

The keys may be collected from the agent after settlement. It is highly recommended for you to change locks after settlement.

11. Registration

Following the settlement, your lender or mortgage provider will register the transfer and mortgage at the Land Titles Office. The lender will retain the Certificate of Title as part of the security for the loan. Alternatively, your solicitor will arrange the registration of your title.

12. Electricity

It is up to you to arrange for electricity meter readings and the connection of other services by suppliers on the settlement date.

13. Final inspection

You can make a final check on the property just before settlement to ensure everything is in order.

The property should be in the same condition as at the date of settlement, as it was when you saw it prior to the exchange of contracts, fair wear and tear excepted. It is advised to take photographs and date them. If there are any issues you wish to raise, do so with sufficient time so that they may be resolved before settlement. If relevant, you should ensure that any vendor or tenant has vacated the property.

14. Defects liability period

Off-the-plan properties often have a “defects liability period”, where the vendor must fix defects in the property due to faulty workmanship and materials. The period is usually ninety days or three months after the date of settlement, although in some cases it may be six months, depending on the contract.

The vendor should repair any relevant defects in the property at their expense. Typically, you and your solicitor would arrange for pest and building inspection reports in relation to the property.

You should instruct your solicitor to serve written notice to the vendor in writing prior to the expiry of the “defects liability period”.

15. Insurance

It is vital that you adequately insure the property. This includes contents insurance, landlord’s insurance (if you’re going to lease the property), and Home Owner's Warranty Insurance (if you’re going to carry out building work at the property).

First published April 2011; updated September 2022