What happens if a purchaser fails to settle on the agreed settlement date without valid reason?
Correct Answer
C) The vendor may serve a notice to complete and claim damages
When a purchaser fails to settle without a valid reason, the vendor can serve a notice to complete, which makes time essential and gives the purchaser a set period under the contract to settle. The vendor can claim damages such as interest and holding costs. If the purchaser still does not settle, the vendor may terminate, keep the deposit and sue for further loss.
Why This Is the Correct Answer
A purchaser who does not settle on time is in breach. The vendor's standard response is a notice to complete, giving the purchaser a final period set by the contract, together with a claim for damages for the delay. If the notice expires unmet, the vendor can terminate, forfeit the deposit and recover further loss.
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