Settlement day in Queensland: what happens, in what order, who does it

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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For weeks a property sale is paperwork: a contract, a finance approval, a building report, a list of searches. Then, on one afternoon, it becomes real. The balance of the price moves from the buyer's side to the seller's, the seller's mortgage is paid out, the title starts its journey into the buyer's name and somebody hands over a set of keys. That afternoon is settlement, and most buyers and sellers see almost none of it happen.

This guide follows a Queensland settlement day from the inside. It sets out who takes part, what each of them must have ready, the order in which things occur and where the money goes. It is based on the standard contract published by the Real Estate Institute of Queensland and the Queensland Law Society, on Queensland Government guidance and on what Titles Queensland says about electronic conveyancing. It describes the usual course of a sale of an established home; a particular contract may say something different, and the people acting in the sale are the ones who know its terms.

REIQ and Queensland Law Society Contract for the Sale and Purchase of Residential Real Estate, first edition (08/25), clauses 5.1 and 5.5; Titles Queensland on the eConveyancing mandate of 20 February 2023.

What settlement is

The Queensland Government's guidance for home sellers describes settlement day as the day ownership passes to the buyer. On that day, it says, the seller usually receives the rest of the purchase price, transfers the title, hands over the keys and gives the buyer possession. The same guidance says settlement typically comes four to six weeks after both parties sign, and generally falls somewhere between 30 and 90 days after the contract, by negotiation.

In the contract's own terms, settlement is an exchange. Clause 5.5 of the standard contract says that in exchange for the balance of the purchase price, the seller must deliver the transfer documents, any instrument needed to release an encumbrance such as a mortgage, and the keys if they have been asked for. Clause 5.7 adds vacant possession of the land and buildings, except where a tenancy is being sold with the property. Each side's promise depends on the other's, which is why everything is designed to happen at one moment.

The contract fixes the moment. Clause 5.1 says settlement must occur by 4pm Australian Eastern Standard Time on the settlement date. The parties' representatives may agree an earlier time of day, and often do, but the contract treats 4pm as the line that matters.

The people who take part

A buyer and a seller sign the contract, yet on settlement day at least six other parties have work to do.

Each side normally has a solicitor or conveyancer. They prepare and sign the documents on their client's behalf, agree the figures and give the final instruction to settle. The Queensland Government's guidance recommends that sellers have legal and financial representatives deal with the buyer's side, because of how much has to line up.

Where the buyer is borrowing, the buyer's lender is a participant in its own right. It provides most of the money and takes a new mortgage over the property. Where the seller still owes money on the home, the seller's lender is also a participant: it must be paid out and must release its mortgage so the buyer receives a clear title.

Then come the institutions. Titles Queensland keeps the land register and records the change of owner. The Queensland Revenue Office is involved because transfer duty is assessed on the transaction and because unpaid land tax can attach to the land. The deposit holder, usually the seller's agent, is holding the deposit in a trust account. And the electronic lodgment network, the online system through which the others work, connects them. Titles Queensland names two approved operators of such networks in the state, PEXA and Sympli.

The buyer and seller themselves usually have no appointment to keep. Their part is to have signed what their representative asked for, to have their own money where it needs to be, and to be reachable.

Why almost every settlement is electronic

For most of the state's history, settlement meant people meeting in an office and swapping bank cheques for signed paper. That is now the exception. Titles Queensland says electronic conveyancing has been mandated in Queensland since 20 February 2023 for industry professionals and corporate entities lodging the required instruments over freehold land. Its list of required instruments includes the transfer, the release of mortgage and the national mortgage form, which are the three documents at the heart of an ordinary sale.

The standard contract follows the same line. Under clause 5.2, settlement is to be electronic unless the transfer is not one of the instruments that must be lodged electronically. The seller nominates the network to be used, and each party pays its own fees for using it.

The registry describes electronic conveyancing as a way for the documents in a property transaction to be digitally prepared, signed, settled and lodged, with immediate confirmation that lodgement has occurred. In practice the work happens in what the contract calls the electronic workspace: a shared online file for one transaction, which only the invited participants can see and edit.

Paper settlements still exist. The contract keeps a set of rules for them, including payment by bank cheque and a physical place for settlement, and Titles Queensland lists exemptions from the mandate, among them people who are acting for themselves without a representative. For an ordinary sale with a professional on each side, though, the electronic route is the one that applies.

The days before: building the workspace

A settlement that goes smoothly at 2pm on a Friday was built during the fortnight before it. The contract says the parties must complete the electronic workspace and digitally sign the conveyancing documents and the financial settlement schedule before settlement. That sentence covers a good deal of work.

The buyer's side has carried out its searches, including a check on rates, water and land tax, so that the figures can be adjusted between the parties. The contract gives the buyer a right to ask for more: on written request, the seller must supply a written statement, supported by reasonable evidence, of outgoings and rent that cannot be found by searching public records.

The seller's side has asked the seller's lender for a payout figure, which is the amount needed to clear the loan on the settlement date, and has arranged for the lender to join the workspace so that its mortgage can be released at the same moment.

The buyer's lender has issued loan documents, received them back signed and booked the settlement. The lender, not the buyer, usually supplies the largest single sum, so the timetable depends on it being ready.

Both sides have agreed a settlement statement, the calculation that turns the contract price into the amount actually payable on the day. Clause 3.4 of the contract requires rent and outgoings to be apportioned so that the seller carries them up to and including the settlement date and the buyer carries them afterwards.

Two smaller deadlines sit in this period. If the buyer wants the keys delivered at settlement itself, clause 5.5 says the request must be made at least two business days beforehand. And where part of the deposit is needed to pay out the seller's mortgage or outgoings, clause 5.2 lets the deposit holder pay it to the seller's solicitor on two business days' notice, to be held and paid out in line with the settlement schedule.

The morning: last checks

On the day, the representatives look again at things they have already looked at. The reason is that the contract's promises are tested at the moment of settlement, not at the moment of signing.

The buyer's representative checks the title once more. The Queensland Law Handbook, published by Caxton Legal Centre, lists a final title search on settlement day among the steps of a purchase, the purpose being to confirm that nothing new has been recorded against the property since the earlier search.

The buyer may also have walked through the property. The contract allows one entry for a final inspection before settlement, on reasonable notice to the seller, and the Queensland Government's guidance for sellers says the home must be vacant and clean.

Money is the other check. Whatever the buyer is contributing beyond the loan and the deposit must be in the account from which it will be drawn, as cleared funds. Representatives ask for this money ahead of the day for that reason, and a transfer between banks sent on the morning of settlement may not be available in time.

Finally, each participant signs off in the workspace. A workspace is ready only when the documents and the financial figures have been signed by everyone who has to sign them. Because any participant can still change a figure, a late alteration can remove the signatures of the others, who must then sign again.

The exchange, step by step

Once everyone is ready, the exchange itself is brief. It follows the same order each time.

One detail of the contract decides when the deal is done. Clause 5.2 says an electronic settlement is taken to have occurred when the financial settlement takes place, whether or not electronic lodgement has finished. In other words, the sale settles when the money moves. Registration of the buyer as owner follows as an administrative step.

Where each dollar goes

The financial settlement schedule is the list of payments that the workspace carries out. It is worth understanding, because it explains why a seller's bank account does not receive the contract price.

Start with the balance purchase price, which the contract defines as the purchase price less the deposit the buyer has paid. Adjustments then move it up or down: a seller who has paid council rates beyond settlement day receives the unused part back from the buyer, and a seller who owes rates has them deducted.

Out of the resulting sum, the schedule pays other people before it pays the seller. The seller's lender receives its payout. Under clause 3.5 of the contract, outgoings that have been assessed but are unpaid at settlement are paid from the schedule directly to the authority concerned, and land tax that the Queensland Revenue Office advises is owing is paid to the Commissioner of State Revenue. Where a sale attracts goods and services tax withholding, clause 3.3 sends that amount to the account nominated by the Commissioner of Taxation. What remains is the seller's, paid to the account the seller has nominated.

On the buyer's side the schedule shows where the money comes from: the lender's advance and the buyer's own contribution, which the contract allows to pass through the buyer's solicitor's trust account.

The deposit sits outside this flow. It stays in the deposit holder's trust account until settlement is confirmed. The contract says the seller is entitled to it once the sale settles. Where the holder is the seller's agent, the Office of Fair Trading's rules for trust money say a sale deposit may be withdrawn only once the transaction is completed, that the seller must be paid first or at the same time as anyone else, and that the agent's own fees come last.

Keys and possession

For a buyer, the keys are the point of the day. The contract treats them as one of the things exchanged for the money, and gives two routes.

If the buyer asked at least two business days before settlement, the keys are to be delivered at settlement. Otherwise, clause 5.5 says keys must be delivered on or before settlement and may be left with the seller's agent, which is the usual arrangement. The agent releases them once the seller's representative confirms that settlement has occurred.

Electronic settlement needed its own rule, because keys and paper cannot travel through a workspace. The contract says the seller complies if the seller's solicitor confirms in writing before settlement that it holds the keys and any documents that cannot be lodged electronically, and undertakes to send them to the buyer or the buyer's solicitor no later than two business days after settlement.

Possession comes with the keys. A buyer who wants to move in earlier needs the seller's agreement, and the contract sets terms for that: under clause 8.5, early possession is a personal licence that the seller may revoke at any time, the buyer must keep the property in the condition it was in and insure it to the seller's satisfaction, and no landlord and tenant relationship is created.

If something goes wrong in the last hour

Most settlements complete at the booked time. When one does not, the cause is usually ordinary: a lender is not ready, a figure is disputed, a signature has dropped out of the workspace.

The contract deals with these moments in three ways. It protects a party who is held up by the other side, saying a party is not in default if it cannot comply because the other party, or the other party's financial institution, has not completed the workspace. It supplies short extensions of the settlement date, which have their own conditions and time limits. And it leaves the rest to the law of default, under which a party who is ready may choose between keeping the contract alive and ending it.

Those rules deserve a longer treatment than a guide to an ordinary day can give. What matters here is the practical point: the hours between early afternoon and 4pm are when a representative may need a decision from a client within minutes.

What buyers and sellers do on the day

The parties' own list is short, and nearly all of it is about being ready for a phone call.

A buyer should expect to hear from their representative when settlement has occurred, and should not collect keys or send removalists to the door before that call. The standard contract puts the property at the buyer's risk from 5pm on the first business day after the contract date, so insurance should already be in place well before settlement day. Electricity, gas and internet accounts are the buyer's to arrange; the Queensland Law Handbook notes that this is the buyer's responsibility whether or not a solicitor is engaged.

A seller should have moved out and cleaned, since the contract promises vacant possession on the settlement date, and should have left the keys where the agent or solicitor asked. The Queensland Government's guidance tells sellers they remain responsible for rates up to and including settlement day, with the buyer responsible from the next day.

Both should keep the day clear of anything that depends on a precise time. A settlement booked for early afternoon may complete then, or some hours later, without anything having gone wrong.

What follows the exchange

Settlement ends the sale between buyer and seller, but several things are still in motion at 5pm.

The transfer has been lodged with Titles Queensland and waits to be registered. Where the keys or paper documents were held by the seller's solicitor, the two business day undertaking is running. The deposit holder is preparing to pay out the deposit. And under the Office of Fair Trading's rules, as summarised in the Queensland Government's guidance for sellers, the agent must give the seller a written statement of everything received and paid within 42 days, or within 14 days if the seller asks for it sooner.

A sale settles when the money moves. Almost everything a buyer or seller can do to help has to be done before that moment.

Understanding the order of the day does not change who does the work. It does make the long silence of settlement afternoon easier to sit through, and it shows why a request made a week earlier for a signature, a form or a transfer of funds was not a formality.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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