Exchange, settlement and in between

Between settlement and exchange:

• • minimise the potential for delays in exchange and settlement by ensuring all documents are not in order at exchange or settlement;
• • check contracts are correctly executed so that their validity is not challenged;
• • lodge a caveat, priority notice or settlement notice immediately after exchange of contracts (whether it be arising from exercise of an option arising under a deed of call option, deed of call and put option, or a contract for sale of land) to protect the purchaser's interests — unless prohibited by the contract from doing so; and
• • in those states where protection by priority notice or settlement notice is unavailable, carry out final searches as close as possible to settlement, and not, say in the morning of a settlement scheduled to take place in the afternoon

The importance of the lodgment of a caveat, priority notice or settlement notice and the timing of the final search was highlighted in the High Court case of Black v Garnock (2007) 230 CLR 438; 237 ALR 1; BC200705972. In this case:

• • A Writ for Levy of Property (issued the day prior to settlement) was lodged with the Registrar-General after the final search was carried out but prior to settlement scheduled to take place that day.
• • Settlement was effected in the afternoon without the purchaser being aware that a writ had been registered on the title.

See Exchange, settlement and in between.