Notice to Complete at Settlement for Melbourne Buyers

It might be a bank delay, a late mortgage discharge, or a vendor who still hasn't packed up by the booked settlement time.

The short answer: A notice to complete, often called a default notice, is a formal written demand used when one party fails to settle under a Victorian contract of sale. In the standard LIV/REIV contract, General Condition 27 gives the defaulting party 14 calendar days to fix the breach, pay reasonable costs and pay any interest due. If the buyer stays in default, General Condition 28 can put the deposit, often up to 10% of the price, at risk, although section 49(2) of the Property Law Act 1958 (Vic) gives the court a discretion to order deposit relief in some cases.

What is a notice to complete in a Victorian property settlement?

A notice to complete is the step that turns a missed settlement date into a formal contractual deadline. Settlement usually does not collapse just because a booking drifts by a day or two; the notice gives the delay legal teeth.

In many Melbourne residential contracts, the notice clause sits in the general conditions of the LIV/REIV contract. The exact clause number can vary in older contracts or where special conditions have been added, so your conveyancer needs to check the contract you signed.

A valid notice usually identifies the default, says the innocent party intends to rely on its rights if the default is not fixed, and requires payment of reasonable costs and any interest caused by the delay.

How does the 14 day notice period work?

The 14 day period usually runs from proper service of the notice, and it is usually counted in calendar days. Weekends and public holidays still count unless the contract says something different.

During that period, the party in default normally has to:

1. fix the default, such as settling or supplying the missing settlement item
2. pay reasonable costs caused by the delay
3. pay any interest due under the contract

For a buyer, that might mean arranging final loan approval, transferring shortfall funds and covering penalty interest for late settlement. For a vendor, it might mean getting the lender to complete a discharge of mortgage, authorising the electronic workspace or giving vacant possession.

If the problem is fixed in time, the contract usually continues. If it is not fixed, the innocent party may choose whether to end the contract or keep pushing for settlement.

What happens if the vendor serves a notice to complete on the buyer?

If the buyer is in default, the notice gives the buyer a last chance to settle before the vendor considers ending the contract. This is the high stress version for first home buyers, because the deposit can be at risk.

Common buyer side problems include finance that has not fully cleared, loan documents signed too late, shortfall funds stuck between banks, or a lender that has not loaded money into the PEXA workspace. These issues feel unfair when you have done your part, but under the contract, the buyer is usually responsible for being ready to settle on time.

We’ve seen this come up when a buyer has approval in principle, then finds out during settlement week that the lender still needs one more document, insurance certificate or internal sign off. By then, the removalists may be booked, rent may be ending, and everyone is watching the settlement booking.

If the buyer cannot cure the default within the notice period, the vendor may rely on its vendor's right to terminate. The usual risks are:

• the deposit, often up to 10% of the price, may be forfeited to the vendor
• the vendor may resell the property and claim loss if the resale price is lower
• the vendor may claim extra costs caused by the delay, such as legal work, holding costs and interest
• the buyer may need to seek court relief if they want the deposit returned

A short agreed extension, with costs and interest dealt with sensibly, is often safer than waiting for a formal notice to run its course. For a closer look at buyer side delay risk, see what happens if settlement is delayed by buyer.

Can a Melbourne buyer serve a notice to complete on the vendor?

Yes. A notice to complete can usually be used by either side, not just by the vendor. If the buyer is ready, willing and able to settle, but the vendor is holding things up, the buyer may be the innocent party.

Vendor side delay often happens when the bank has not provided payout figures, the discharge is not ready, transfer documents are incomplete, or the vendor has not vacated when the contract requires vacant possession. It can also happen where the vendor or their representative has not taken the required steps in the electronic settlement workspace.

This is where PEXA settlement delays can cause real pressure. One missing authorisation or unmatched figure can hold up the whole transaction, even if the buyer’s money is ready.

If the vendor fails to fix the default within the notice period, the buyer may be able to end the contract, recover the deposit and consider a damages claim. Damages are fact specific and might include extra accommodation, removalist costs or the cost of having to buy a similar property at a higher price.

What happens after the 14 days expire?

Once the notice period ends without the default being fixed, the innocent party must decide what to do next. The contract does not always end automatically at midnight on day 14.

The innocent party may choose to end the contract, or may keep the contract alive and keep pressing for settlement. If the vendor ends the contract because the buyer has not cured the default, the deposit up to the usual 10% level may be treated as forfeited. If the buyer ends the contract because the vendor has not cured the default, the buyer will usually seek return of the deposit and may consider a damages claim.

Don't send informal texts, agent messages or emails saying the contract is 'off' without legal advice. A badly worded message can make a difficult settlement worse.

Can a buyer get a forfeited deposit back?

A buyer may be able to ask the court to return all or part of a forfeited deposit under section 49(2) of the Property Law Act 1958 (Vic). That is a discretionary remedy, not an automatic refund.

The court can consider the reason for the default, the vendor’s actual loss, the size of the deposit, the buyer’s conduct and whether keeping the whole deposit would be unfair on the facts. Section 49(2) is a possible safety net, not a settlement strategy. If you receive a notice, act during the 14 days.

How must a notice to complete be served?

A notice to complete must be served in the way the contract allows. If service is wrong, the 14 day clock may not start.

Modern Victorian contracts often allow service by email to the address nominated in the contract, as well as other service methods set out in the general conditions. Older contracts, special conditions and handwritten changes can alter the position.

Small mistakes can matter. Sending the notice to a personal email address instead of the nominated address, serving the agent rather than the legal representative, or using vague wording may create arguments about whether the notice is valid.

What should you do in the first 24 hours after receiving a notice?

The first 24 hours are about stabilising the deal. You need to find out whether the default can be cured, how much it will cost, and whether an extension can be negotiated.

For a buyer, the practical steps are:

1. send the notice to your conveyancer immediately
2. ask your lender for a clear written update, not a vague phone comment
3. confirm whether loan funds, shortfall funds and authority documents are complete
4. ask your conveyancer to check whether the notice was validly served
5. work out the daily interest and costs claimed
6. consider whether to negotiate a short extension before the notice period becomes critical

For a vendor delay, the buyer’s conveyancer should check whether the buyer was truly ready to settle. You do not want to serve a notice on the vendor if your own bank, funds or documents were also incomplete.

Common Melbourne settlement situations where notices appear

Notice disputes often come from ordinary settlement pressures, not dramatic legal fights. A buyer might win at auction in Brunswick, sign quickly, then discover the bank’s settlement team is not moving at the same pace as the agent.

Other common examples include a vendor’s lender being slow to finalise the mortgage discharge, an apartment purchase in Southbank or Box Hill held up by owners corporation figures, a linked sale and purchase, shortfall funds not clearing, or a vacant possession dispute.

In each situation, the key question is the same: who is actually in default, and is a formal notice the best next step? Sometimes it is. Sometimes a calm phone call between conveyancers does more good than a legal threat sent too early.

Frequently Asked Questions

What is a notice to complete in Victoria?

A notice to complete is a formal written demand used when a party fails to settle or otherwise defaults under a Victorian contract of sale. In the standard LIV/REIV contract, General Condition 27 gives the defaulting party 14 calendar days to fix the default and pay reasonable costs and any interest. If the default is not fixed, General Condition 28 may allow the innocent party to end the contract.

How long is the cure period for a default notice settlement in Victoria?

The usual cure period is 14 calendar days from proper service of the notice to complete. Calendar days include weekends and public holidays unless the contract changes the position. Always check your own contract because special conditions can alter timing and service rules.

Can a buyer serve a notice to complete on a vendor?

Yes. A buyer can usually serve a notice to complete if the buyer is ready to settle and the vendor is the party in default. Common vendor defaults include a late mortgage discharge, missing transfer steps, failure to authorise the PEXA workspace, or failure to provide vacant possession.

What happens to my 10% deposit if I can't cure a notice to complete?

If the vendor validly ends the contract after the buyer fails to cure the default, the buyer’s deposit, often up to 10% of the price, may be forfeited to the vendor. The vendor may also claim further loss depending on the contract and the facts. A buyer may apply for relief under section 49(2) of the Property Law Act 1958 (Vic), but the court’s decision is discretionary.

What is the difference between a notice to complete and a rescission notice?

A notice to complete gives the defaulting party a set period, usually 14 calendar days, to fix the settlement default before the contract can be ended. A rescission notice is used where a contract right allows a party to end the contract. Most ordinary settlement delays are dealt with by a notice to complete before termination is considered.

Can a notice to complete be served by email?

Yes, a notice to complete can often be served by email if the contract permits email service and the notice is sent to the correct address for service. The email address must match the contract’s service rules. A wrong address or informal message may not start the 14 day clock.

What is 'time of the essence' and why does it matter for settlement default?

'Time of the essence' means timing is treated as a key contract obligation. Once a valid notice to complete is served, failure to settle within the notice period can become serious enough for the innocent party to consider ending the contract. That is why the 14 day period should be treated as a hard legal deadline.

About the Pearson Chambers Conveyancing team

Pearson Chambers Conveyancing is a Melbourne focused conveyancing team working with buyers, sellers and first home buyers across metropolitan Victoria. We handle contract reviews, Section 32 checks, settlement coordination and PEXA workspaces for clients navigating the pressure of settlement week. Notice to complete issues sit right in the work our team handles day to day, especially when a bank, vendor or buyer is not ready on time.

Sources we consulted

• Sale of Land Act 1962 (Vic), Victorian Legislation
• Property Law Act 1958 (Vic), Victorian Legislation
• Sample contract of sale of real estate, Consumer Affairs Victoria
• Settlement, Consumer Affairs Victoria
• Property deposits for sellers, Consumer Affairs Victoria

Talk to Pearson Chambers Conveyancing

If you have received a notice to complete on a Melbourne settlement, don't wait until the 14 day period is nearly over.

Email contact@pearsonchambers.com.au for calm, practical guidance. We also offer a complimentary Section 32 contract review, so Melbourne buyers can understand settlement risk before signing.

General information only, current as at the date of publication. Victorian conveyancing rules and legislation change frequently. Please contact the Pearson Chambers Conveyancing team for advice on your specific contract.