When it comes to choosing a settlement agent and sending the contract on to them, time is of the essence.
After finalising a contract, buyers have just two months to nominate a settlement agent and have them lodge it with the Office of State Revenue. Failure to do so can result in significant fines, but many buyers and some agents are unaware of the time limit.
For example, in a past settlement case, a Perth homeowner bought a new property, and the purchase was conditional upon the homeowner selling his existing home. After selling the home months later, the client nominated us as his settlement agent for the sale and asked us to handle his purchase as well – but by this time, the first contract was already well overdue for lodgement!
Contracts need to be lodged within the two-month period, even if they’re conditional, so our client incurred a fine of over $100 from the office of State Revenue.
Because fines are a percentage of the payable stamp duty, and increase over time, this fine could have been much higher. For example, had the buyer been purchasing a $1,000,000+ property, a late lodgement could have resulted in a fine in the thousands of dollars.
In cases like these, such fines would be avoided if the contracts were sent to our office soon after the purchases – allowing us to lodge them with the Office of State Revenue.
To avoid expensive fines, nominate a settlement agent promptly – and if you’re a real estate agent, be sure to send the contract through within two months of the Offer being accepted.
Image by Vagawi via Flickr.