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Settlement day has a way of sneaking up on you. One minute you’re juggling inspections and paperwork, the next you’re standing on a tram platform in the CBD, refreshing your phone because the bank ‘just needs one more thing’.
When settlement is about to fall over, it’s tempting to think an extension is a simple favour. In Victoria, it’s more like a small contract change that needs to be handled properly. Done well, it’s a calm email trail, a new booking time, and you still get the keys. Done badly, it can tip into default interest, formal notices, and a very long week.
If you’re a buyer or seller in Melbourne and you need a settlement extension, this guide will help you understand what’s involved and how a conveyancer approaches it.
This is general information only, not personal legal advice. Every contract is a little different, and timing matters.
What a settlement date means in Victoria (and why it matters)
Your contract sets a settlement date. It’s the day the balance of the purchase price is paid, documents are exchanged electronically, and ownership transfers. In Victoria, settlement is usually run by the parties’ conveyancers or solicitors and their lenders through an electronic platform.
Most settlements are set 30 to 90 days after signing, depending on what was negotiated. The key point is that the date is binding. There’s no automatic right to extend because life got messy or a lender is slow.
Changing the date needs agreement from both sides, in writing. If settlement doesn’t happen on the due date and there’s no written extension, the party who isn’t at fault may be able to charge default interest and start a formal notice process. That’s why extension requests need to be tidy, fast, and recorded properly.
The usual reasons settlement gets delayed in Melbourne
Most delays aren’t dramatic. They’re ordinary admin problems that become urgent at the worst possible time.
The buyer’s lender isn’t ready
Even with loan approval, the bank still has steps to get through: final checks, document processing, booking the settlement time, and making sure funds are clear. This comes up a lot after auctions, where buyers in places like Preston, Footscray, Brunswick or Bentleigh have committed unconditionally and timelines are tight.
The seller’s discharge of mortgage is still in progress
Sellers can be fully packed and ready to hand over keys, yet their lender hasn’t produced the discharge paperwork or booked into the platform. If the seller has refinanced recently or has more than one loan, it can take longer than anyone expects.
You’re in a chain of settlements
A very Melbourne pattern: you’re selling a unit in Carlton and buying a family home in Ivanhoe, and the dates are lined up back to back. If one side slips by a day, the whole chain can wobble. That’s when extensions become a negotiation between several parties, not just two.
Off the plan timing surprises
Off the plan contracts run on notices and milestones. When the plan of subdivision is registered, the developer gives notice and settlement is due within the timeframe in the contract. Recent updates to the standard Victorian contract have extended that window to 21 days after notice in many off the plan sales, which helps, yet it still catches buyers off guard when the ‘ready’ notice lands during work travel or when the bank needs a fresh valuation.
Last minute practical issues
Final inspections, tenant vacating, missing remotes, damage discovered late, or arguments about what stays. These issues can delay settlement, or they can trigger a scramble to resolve them before the due time.
What a settlement extension request is (in plain language)
A settlement extension request is a written proposal to change the settlement date. It might come from the buyer, the seller, or both sides at once if everyone can see settlement won’t happen.
A good request does three things:
gives a clear new date (and ideally a time)
gives a brief, factual reason
shows you’re taking settlement seriously and you’re close to ready
It’s not the place for a long explanation. Your conveyancer will keep it short because the other side needs to take instructions quickly and update lender bookings.
When to ask for an extension
The best time is the moment you suspect you might miss settlement. Not the day before.
If you wait until Thursday afternoon for a Friday settlement, the other side has very little room to manoeuvre. They may have their own settlement booked, movers scheduled, leave organised, and a bank team allocated. A late request can turn a cooperative negotiation into a hard ‘no’ out of sheer practicality.
Early warning signs include:
your broker says the bank can’t guarantee documents will be processed in time
the lender hasn’t confirmed a booking time as you get close
the other side mentions discharge delays or an unresponsive lender
you’re relying on sale proceeds and that sale starts slipping
Tell your conveyancer early. Even a one day head start can be the difference between a simple written agreement and a formal default situation.
What your conveyancer usually includes in an extension request
In Victoria, an extension is usually documented as a written agreement between the parties, often by email, setting out the varied settlement date (and any other agreed points). Your conveyancer will tailor it to your contract and situation, yet a strong request often includes:
A specific proposed date
Not ‘next week’. A date, often a short extension of one to five business days.
A short reason
For example, ‘The purchaser’s lender requires extra time to finalise loan documentation and book settlement.’
A statement of intention
A clear message that you still intend to settle.
Proof points, where helpful
For instance, that loan documents are signed, insurance is arranged, or funds are being transferred.
A position on interest and costs
If the delay is on your side, the other party may ask for default interest for the extra days, or for their reasonable costs caused by the delay. Sometimes it’s as simple as confirming interest will be paid in line with the contract.
A request for written confirmation
Verbal agreements don’t help settlement teams booking into the platform. Written agreement reduces the chance of a last minute misunderstanding.
Default interest and other costs: what ‘late settlement’ can really cost
The best outcome is always to settle on time. When that’s not possible, it helps to understand the cost categories so you can make sensible choices.
Default interest on the outstanding balance
Most Victorian contracts allow default interest to be charged if settlement is late due to one party’s default. It’s usually calculated daily on the unpaid balance of the purchase price, at the rate set out in the contract. Many contracts use a rate around 10% per annum, though you must check your specific contract.
On a $900,000 purchase, a few days of interest can be noticeable.
Practical costs that don’t show up in the contract
This is where people get caught:
removalist change fees and storage
extending a rental or booking short stay accommodation
rescheduling cleaners and utilities
missed rent if you were planning to lease the property straight away
Duty quirks when late settlement interest is high
From 1 July 2022, late settlement interest can affect duty in certain situations because it may be treated as extra consideration. There are thresholds and administrative steps where the amount is large. It’s not something most buyers run into, yet it’s another reason not to let a delay drift for weeks without a plan.
If the other side agrees, what happens next?
Once both parties agree in writing, your conveyancer will record the varied settlement date and update the settlement workspace, confirm lender booking changes, and check whether adjustments need to be recalculated (rates, owners corporation, rent). They’ll also confirm the position on default interest and any costs so there’s no surprise at settlement.
A short extension, properly documented, can feel almost uneventful. That’s the goal.
If the other side refuses the extension
If an extension is refused, options may include:
Pushing to settle on time
Some buyers explore bridging finance or temporary funds to meet settlement. This needs financial advice and careful cost checking.
Asking for a shorter extension
If you asked for a week, you might get agreement for two business days.
Checking your contract conditions
If your contract is subject to finance and you’re still within the finance clause timeframe, you may have rights to request an extension to the finance date or to end the contract under that clause if finance isn’t available. Auction buyers usually don’t have this option because auction contracts are commonly unconditional.
Preparing for a formal notice
If settlement doesn’t occur on the due date and there’s no written extension, the non defaulting party may issue a formal notice requiring completion within a set period (often 14 days, depending on the contract). Once that happens, default interest and legal costs often become more front and centre.
Three quick Melbourne scenarios (and what an extension request can look like)
A Brunswick auction purchase with a bank backlog
A buyer wins at auction and settlement is set for 30 days. The bank’s settlement team is slow to book. The conveyancer requests a two business day extension, confirms loan docs are signed, and agrees to interest in line with the contract.
A Docklands sale with a discharge delay
The buyer is ready. The seller’s lender can’t produce discharge documents in time. The buyer agrees to a three business day extension so the booking can be made properly, with interest and costs handled under the contract.
A Box Hill off the plan notice arrives at the wrong time
The developer issues a ‘ready to settle’ notice and the clock starts. The buyer’s lender needs a new valuation and the buyer is away for work. The conveyancer gets the lender moving immediately and, where needed, approaches the developer early with a tight request and a practical plan.
How to reduce the chance you’ll need an extension
A few habits can prevent the last minute scramble:
keep your broker, lender and conveyancer updated, and send requested documents quickly
ask your lender for a clear list of settlement requirements, and chase early if bookings aren’t confirmed
book your final inspection with enough time to fix issues
if you’re selling and you have a mortgage, start the discharge process early
build a small buffer around moving dates if possible, even one night
If settlement is looking shaky, get help early
A settlement extension request is common, yet it’s not something you want to DIY while you’re stressed and the clock is ticking. The wording, timing and documentation all matter.
If you’re buying or selling in Melbourne and you need help with an extension request, or you want to avoid getting to that point, contact Pearson Chambers Conveyancing. We’ll explain your options in plain language, handle the negotiation and paperwork, and keep settlement moving.
Email contact@pearsonchambers.com.au. If you’re still reviewing a property, ask us about a complimentary Section 32 contract review before you sign.