Settlement day is the most important day of any property transaction for both the Vendor and the Purchaser. Settlement day is when the ownership of the property exchanges hands, the Purchaser receives the keys to their new property and the Vendor receives their money.

Each party is required to do whatever it is reasonably necessary to make settlement happen.

Under the Contract for Sale of Land (NSW) all parties must complete by the date for completion stated in the contract, if they do not, the party ready to settle can serve a Notice to Complete ("NTC") on the default party (party unable to complete). To issue a NTC the party serving must be ready, willing and able to complete at the time the notice is issued.

A NTC is a notice which requires the defaulting party to complete the contract within a reasonable time frame, generally within fourteen (14) days from the date of service, however this can vary and will depend on each individual case.

By issuing a NTC, the new completion date becomes an essential term of the contract. Therefore, if the recipient of the notice is not able to complete settlement within the specified time frame, there can be significant consequences.


A NTC can only be served the day after the property was due to settle and must be served in the appropriate form in order to comply with the relevant governing laws. A defective NTC will be not be enforceable against the recipient.


In some cases it may be more beneficial for the party issuing the NTC to complete the contract (i.e if the value of the property has increased). They may, at their own discretion, give the defaulting party more time to settle and extend the period of the NTC.

If completion does not take place within the period stipulated in the NTC, the party issuing the NTC can issue a Notice of Termination, effectively terminating the contract entirely as a result of the defaulting party's breach.

If the recipient of the NTC is the Vendor and the Vendor fails to comply, following the issuing of a NTC, the Purchaser can terminate the contract and retrieve their deposit. The Purchaser can also sue the Vendor for any losses suffered as a result of the termination.

If the recipient of the NTC is the Purchaser, the Vendor can:

  • Keep and/or recover the balance of the deposit up to 10% of the purchase price;
  • Charge penalty interest under the contract for sale (typically around 10% per annum on the balance purchase price);
  • Sue the Purchaser to recover damages for breach of contract; and
  • If the Vendor then sells the property for a lower price than the terminated contract, the Vendor may sue the Purchaser for the difference in the sale price.


A recipient can challenge/dispute a NTC on the following grounds, circumstances permitting;

  • The sender was not ready, willing and able to settle the contract on settlement day
  • The NTC was issued in a way not prescribed specifically within the contract
  • Further negotiations invalidated the NTC.


When determining the most appropriate action it is important to obtain professional legal advice. Often it may be possible to make compromises and arrange win win scenarios like early occupation.