Key takeaways for sellers
- Check the date before you check your rights. In Queensland either party can unilaterally push settlement back five business days, so a missed date may not be a default at all. In New South Wales and Victoria you serve a notice and wait roughly 14 days before you can terminate.
- Get the process wrong and you can end up the one at fault. Terminating when the buyer had a valid extension, or serving a notice in the wrong form or for too short a period, can be treated as you walking away from the contract — leaving the buyer free to terminate, take their deposit back, and claim against you.
- The deposit isn't the limit of what you can recover. On a genuine default you can usually forfeit it — and separately sue for what the default actually cost you, including the shortfall if the property resells for less.
What happens when the buyer misses settlement?
Where you are decides how fast you can act — and in Queensland, whether a missed date is a default at all.
Queensland: check the extension before you do anything
Under current REIQ contracts either party can extend settlement unilaterally by up to five business days, for any reason, by written notice given by 4pm on the settlement date. No agreement needed from you. A buyer who's short on funds can simply take it.
So a Queensland seller staring at a missed settlement has to establish which situation they're in. If the buyer gave that notice in time, there is no default — the date has moved and you wait. If they didn't, the position is the opposite and it's severe: time is of the essence, and the seller generally has the right to terminate, forfeit the deposit and sue for damages, on the day.
Both ends of that are unusually sharp. Act as though it's a default when it isn't, and you're the one in breach.
New South Wales and Victoria: you have to give notice first
Neither treats settlement as time of the essence by default. In NSW you serve a Notice to Complete giving the buyer a reasonable further period, commonly 14 days. In Victoria it's a default notice giving 14 days. Only once that period expires does the right to terminate arise.
| Terminate on the day? | What comes first | |
|---|---|---|
| Queensland | Yes, if no extension notice was given | Confirm no 5-business-day extension was served by 4pm on settlement day |
| New South Wales | No | Notice to Complete, commonly 14 days |
| Victoria | No | Default notice, 14 days |
When is a buyer actually in default?
Not every collapsed sale is a default, and the difference decides whether you keep anything.
Not a default: the buyer exits under a condition they were entitled to use — finance not approved by the date, a building and pest report they're allowed to reject, cooling off within the window. They followed the contract. The deposit goes back, less any cooling-off penalty.
A default: they don't settle on the date and have no extension or condition to rely on. Or they don't pay the deposit when the contract requires it. Or they announce they're not proceeding when nothing in the contract lets them.
The awkward middle is a buyer whose finance falls over after the contract has gone unconditional. Sympathetic, but the finance condition has already been satisfied or waived — so it's their problem, and legally it's a default like any other.
Can you just charge interest and let them settle late?
Standard contracts in all three states carry a default interest rate, and a seller can charge it for each day the buyer settles late. Victoria's standard form sets it at a margin above the statutory penalty interest rate. Queensland points to the rate the Queensland Law Society publishes. New South Wales pre-prints a rate in the particulars, which the parties can change.
Which is where to pay attention. Buyers regularly try to soften this by special condition — dropping the rate, capping the total, adding a grace period before interest starts, or removing the entitlement altogether. It's easy to wave through as a minor amendment during negotiation, and you only find out what it cost you when settlement runs late.
Read the default and interest clause together with the particulars before you sign, and treat any special condition touching either as a substantive change rather than tidying up.
Charging interest is often the better outcome anyway. You get the sale, a few days late, with the delay paid for. Terminating gets you a deposit and a property to sell again, which is rarely what you actually wanted.
What can you actually recover?
The deposit is the fastest remedy, not the only one.
If you resell for less than the defaulting buyer agreed to pay, the shortfall is generally recoverable from them. So are the costs the default caused: the second lot of marketing, a second agent's commission, mortgage interest and rates for the extra weeks you held the property, and your legal costs.
Queensland's standard contract spells this out — the seller may forfeit the deposit, sue for damages, and resell, with any profit on the resale belonging to the seller rather than the buyer. Queensland courts have upheld sellers recovering the resale shortfall along with conveyancing costs and a second agent's commission.
Queensland is strict on timing generally. In Evans v Jan, a buyer lost a $98,500 deposit because it was paid a day late and the contract made timely payment essential — and the agent had no authority to let it slide.
None of it is automatic. You have to establish the loss, and pursuing a buyer who couldn't settle in the first place isn't always worth the cost of trying. That's a commercial decision as much as a legal one.
Should you act on a default yourself?
Almost every way a seller loses here is procedural. Terminating when the buyer had a valid extension. Issuing a notice in the wrong form, or for too short a period. Treating a delay as a repudiation when it isn't. Any of those can put you in breach instead of them — and hand the buyer the remedy you were reaching for.
There's also a strategic call underneath the legal one. Terminating gets you the deposit and a property back on the market. A short extension with penalty interest gets you the sale you wanted, a few days late. Which is better depends on your next purchase, the market, and how far along the buyer actually is.
Zettle handles the notice and tells you honestly which of those is worth doing. Fixed fee, known before you start. Just Zettle it.