Settlement
The day ownership of a property officially transfers from the seller to the buyer and the purchase price is paid in full.
What is a Settlement?
Settlement is the final step in a property transaction. On settlement day, the buyer's lawyer transfers the purchase price (minus the deposit already paid) to the seller's lawyer, and in return the seller's lawyer releases the signed transfer documents. LINZ updates the certificate of title to show the new owner.
In New Zealand, settlement typically occurs 10 to 20 working days after the agreement goes unconditional, though the exact date is specified in the sale and purchase agreement. Settlement is usually handled entirely by the lawyers — you don't need to be present.
If either party fails to settle on time, the other party can issue a settlement notice under the agreement, triggering a strict deadline (usually 12 working days). Failure to meet that deadline can result in the contract being cancelled and penalties applied.
Why It Matters for Due Diligence
Understanding the settlement date is critical for your planning. You need to arrange mortgage drawdown with your bank, organise insurance (the property should be insured from settlement day), and coordinate moving logistics.
If you're selling one property and buying another, the settlement dates need to align. Mismatched settlements can leave you without a home or force you to bridge finance two properties temporarily. Discuss timing carefully with your lawyer and mortgage broker.
How to Check
The settlement date is specified in the sale and purchase agreement. Your lawyer will manage the settlement process, including liaising with your bank for mortgage drawdown and coordinating with the seller's lawyer. Confirm the date with your lawyer well in advance and ensure your bank has everything it needs to release funds on time.
Frequently Asked Questions
What happens if the seller can't settle on time?
You can issue a settlement notice, which gives the seller a further 12 working days to settle. If they still fail, you can cancel the agreement and claim compensation, including any costs you've incurred.
When do I get the keys?
You typically receive the keys on settlement day once your lawyer confirms funds have been transferred and the title has been updated. Your real estate agent or the seller's lawyer will arrange handover.
Related Terms
Sale and Purchase Agreement
GlossaryThe legally binding contract between buyer and seller that sets out all the terms and conditions for a property transaction in New Zealand.
Unconditional
GlossaryThe status of a sale and purchase agreement once all conditions have been satisfied or waived, making both parties legally committed to the transaction.
Mortgage
GlossaryA loan from a bank or lender secured against the property, giving the lender the right to sell the property if the borrower defaults on repayments.
Deposit
GlossaryAn upfront payment made by the buyer when purchasing a property, typically 20% of the purchase price, held in trust until settlement.
Chattels
GlossaryMoveable items included in the sale of a property, such as curtains, light fittings, appliances, and garden sheds.
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