Settlement Day - A Complete Guide for Canterbury Vendors
Settlement day is the day your property sale is completed - ownership transfers to the buyer, your mortgage (if any) is discharged, and the net sale proceeds are deposited into your account. For most Canterbury vendors, settlement day is also moving day. Here is exactly what happens.
What Needs to Happen on Settlement Day
For settlement to proceed, several things must occur simultaneously on the settlement date. Your bank must discharge your mortgage, releasing the property title for transfer. Your solicitor must receive the settlement funds from the buyer's solicitor and distribute them correctly - paying out the mortgage discharge, deducting the commission and legal fees, and depositing the balance to your nominated bank account. The property must be vacant, clean, and keys available for handover to the buyer. All chattels listed in the agreement must be present and in working order.
The Timeline on the Day
Settlement typically occurs at the settlement time specified in the agreement (often 2pm, 3pm, or 4pm). Your solicitor handles the legal and financial elements electronically - you do not need to be present at any office. The process: your solicitor receives cleared funds from the buyer's solicitor; they pay out your mortgage discharge to your bank and any other registered creditors; they distribute the commission to the real estate agency; they deposit the balance to your nominated bank account; and they advise you that settlement is complete. Key handover happens once your solicitor confirms funds have been received. Typically this means giving keys to your real estate agent who then releases them to the buyer.
What You Need to Do
Before settlement day: move out all your belongings, leave the property clean and tidy, ensure all listed chattels are present and working, leave all keys, garage door openers, alarm codes, and any appliance manuals. Redirect your mail, transfer utilities into the buyer's name from settlement date, and inform relevant parties (bank, insurance, council, WINZ if applicable) of your change of address. Leave a note for the new owners with relevant property information - bin collection days, any useful instructions for appliances, tradesperson contacts.
If Settlement Is Delayed
If the buyer cannot settle on the due date, they are in default and must pay late settlement interest at the rate specified in the agreement (typically the Reserve Bank overnight cash rate plus a margin) for every day settlement is delayed. If settlement delays significantly, your solicitor will advise you on your options. If the buyer cannot settle at all, you may have grounds to cancel the agreement and retain the deposit. These situations are rare but your solicitor is your guide if they arise.
Information from Settled.govt.nz, the New Zealand Law Society, and LegalVision NZ. For general information only - always obtain independent legal advice.