# Australia: Explaining a Settlement Adjustment Sheet – Purchasers

## Explaining a Settlement Adjustment Sheet – Purchasers

A Settlement Adjustment Sheet is used by your Conveyancer or Lawyer when working out council and water rate proportions.

When settlement falls due your conveyancer or Lawyer will have to adjust on current Council and Water Rates as well as any allowances which will need to be made by the vendor to you.

Below is an explanation of how each adjustment is made to ensure that you pay your share and the vendor pays his share.

As you can see from the below example, there are two columns. One "Payable by Purchaser" and one "Payable by Vendor". For the purpose of this example the settlement date is 22 June 2016.

Payable by Purchaser Column

Up first is your purchase price, less your deposit (normally 10%) which you paid to the agent which gives you a balance. In this example the price is \$690,000.00 less \$69,000.00 which was paid to the agent, leaving a balance of \$621,000.00 due on settlement.

 Payable by Purchaser Purchase Price (inc GST & any other consideration) \$690,000.00 Less Deposit \$69,000.00 Balance \$621,000.00

Council Rates – Council Rates are for the period 1 July to 30 June each year. From this example you can see that the council rate for the year are \$1,407.08. In the current council year, i.e. from 1.7.2016 to 30.06.2016 there are 366 days in the year. As settlement is on 22 June 2016, that only leave us 8 days in the current council year, therefore we take the yearly amount of the rates \$1,407.08 divide it by 366 days in a year and multiply it by 8 days left – which equals \$30.76. This amount is the amount you allow to the vendor as the new owner.

 Current Council Rates For Period 1/07/2015 to 30/06/2016 – 366 days \$1407.08 Purchaser allows 8 days For period 22/06/2016 to 30/06/2016 \$30.76

Water Rates – Water Rates are for the current quarter. The quarters are as follows:

• 1 July – 30 September
• 30 October – 31 December
• 1 January – 31 March
• 1 April – 30 June

In this example, the current quarter is 1/4/2016 to 30/06/2016 where there is 91 days in the quarter. As settlement is on 22 June 2016 that only leaves 8 days in the current water rate quarter, these 8 days are the 8 days in which you will own the property until the next water rate for the next quarter is struck. Therefore, we take the quarterly rate of \$177.91, then divide it by 91 days and then multiply it by 8 – which will equal \$15.64. This amount is the amount you allow to the vendor for water rates as the new owner.

 Current Water/Sewerage Rates For Period 1/04/2015 to 30/06/2016 – 91 days Purchaser allows 8 days \$177.91 Adjusted as Paid For period 22/06/2016 to 30/06/2016 \$15.64 \$15.64

Water Usage – As the vendor will no longer own the property from 22 June 2016 and water reads are only done every quarter (3 months) the vendor has used water in his time that he has owned the property, therefore, the vendor must give you, the purchaser, an allowance towards water so that when the final quartlery bill is issued to you, you are able to pay the previous water usage. Your Conveyancer or Lawyer will order a special certificate which provides us with details on:

1. When the meter was last read;
2. The vendors daily average in kilolitres; and
3. The dollar amount per kilolitre – which Sydney Water charge \$2.276 per kL

Therefore, to work out the water usage if the last reading was done on 02/06/2016 we calculate the usage to the settlement date of 22 June 2016, there is 20 days. We take the 20 days, multiply is by 0.068 kL (daily average) then multiply it by the daily amount that Sydney Water charge which is \$2.276 which will equal \$3.10 – this amount is payable by the vendor to you.

 Water Usage Last meter reading 2/06/2016 Daily Average = 0.068 kL Vendor allows 20 days For period 2/06/2016 to 22/06/2016 \$3.10

Vendor allowance for Discharge of Mortgage

If the vendor has a mortgage it will need to be discharged (taken off) on settlement. Normally, your bank that is lending you the money will charge you this fee as they have to pay this fee to the titles office. Therefore, the vendor is allowing you the amount of \$136.30 so when your bank lodges your loan documents at the titles office they will have the vendors mortgage taken off at the same time.

 Vendor allows for Discharge of Mortgage \$136.30

Finalisation of funds due to be paid

To finalise the funds we have to add both columns up.

Payable by the purchaser – balance of funds due \$621,000, plus council rates \$30.76, plus water rates \$15.64 = \$621,046.40

Payable by vendor – Water usage \$3.10 plus discharge of mortgage fee \$136.30 = \$139.40

Then to finalise we take the amount payable by purchase which is \$621,046.40 take away amount payable by vendor \$139.40 = \$620,907.00 – which then becomes the amount due on settlement.

 Totals 139.40 \$621,046.40 Less Ammount Payable by Vendor \$139.40 \$139.40 AMOUNT DUE ON SETTLEMENT \$620,907.00

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors

“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels

|
|
© Mondaq® Ltd 1994 - 2017

Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).

Company Name
Position
Mondaq Topics -- Select your Interests
Accounting
Anti-trust
Commercial
Compliance
Consumer
Criminal
Employment
Energy
Environment
Family
Finance
Government
Healthcare
Immigration
Insolvency
Insurance
International
IP
Law Performance
Law Practice
Litigation
Media & IT
Privacy
Real Estate
Strategy
Tax
Technology
Transport
Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

### Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

### Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

### Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

• To allow you to personalize the Mondaq websites you are visiting.
• To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
• To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

### Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

### Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

### Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

### Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

### Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

### Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

### Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

### Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

### How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.