Clients often ask us whether they are need to attend settlement and what actually happens on settlement day.  Below is a snapshot of how a settlement unfolds.  


Irrespective of whether the settlement is the sale or purchase of a business or property, the parties are usually represented by a solicitor and are not required to attend.  With that said, if you do have a desire to attend settlement to see what happens, let us know and you can by all means come along!

The contract says where settlement is to occur and usually, it is at a location nominated by the seller.  If the seller has a mortgagee, settlement usually occurs at the offices of the outgoing mortgagee – that is, the bank that is being paid out.  If the seller does not have a mortgagee, settlement might occur at the offices of the seller’s solicitor or at another place convenient to both parties.

If you are selling or buying a business or property that is outside a major city, check the settlement location prior to signing the contract or at least let your solicitor know settlement is nominated to occur at a location outside a major city.  Once the contract is signed, there is limited ability to change the settlement location and a location outside of a major city may mean your solicitor needs to arrange a regional agent to attend on their behalf.  Whilst that is a relatively straight forward process, it does need to be organised and can result in increased costs, particularly if it is not arranged until the last minute. 


At an agreed time on the settlement date, representatives of both parties and the banks attend the agreed location to complete the transaction.  They find each other in the room by calling out their firm names and once they’ve “matched”, the settlement begins.

Settlement normally takes only a few minutes and involves the parties: 

  • requesting the exchange of cheques and documents;
  • checking the cheques are correct (not only the amount but also spelling of names)
  • checking that any other required documentation is correct such as releases of mortgage, transfer of title/lease and releases of security interests; and 
  • exchanging the cheques and documents to make sure each party ends up with what they need.  For the seller, that is their money and for the buyer, it is usually the remaining documentation.


The main issue which arises at settlement and can result in delays is errors in the documents or failing to provide releases of security interests.  Another reason for delay is if there are insufficient funds provided at settlement such that the releasing bank does not receive all of the money they were expecting to receive. 

Insufficient Funds

It is important all documents are checked and double checked prior to settlement.  There also needs to be open communication between your solicitor and your bank to make sure the bank gets the funds it requires.  If the property or business is being sold for less than the amount of the debt, the seller will need to provide the shortfall or additional security.  That can take time to arrange so it is essential any issues are made known early in the transaction. 

When the deal is done

After settlement, the solicitors contact the selling agent or broker to make sure the deposit is released and the keys to the business or property are provided to the new owner.  Your solicitor will also contact you to confirm that settlement has been completed.  Following that call, you can celebrate your success!


For further information regarding settlements or to discuss any of your queries, please contact us.  Please note that settlements can vary depending on the circumstances of the matter and whether the parties consent to electronic conveyancing.  The information provided in this article is general information only.  It does not constitute legal advice.