A Notice to Complete is a notice which can be issued by one party to a contract to another when the other party does not complete their obligations under the contract by the date of completion. A Notice to Complete is usually issued under a ‘Notice to Complete Clause’, and these clauses are often included in conveyancing contracts to ensure that completion occurs on time.
What does a Notice to Complete do?
A Notice to Complete is issued by the sender, and is received by the receiver. The sender of the Notice to Complete must be ready, willing and able to perform their obligations under the contract when they send it out.
In the notice, the issuer will stipulate a timeframe during which the receiver must complete their obligations under the contract. This timeframe will usually fall within 14-28 days from the date that the notice is sent. Where the receiver does not comply within this timeframe, the sender can either extend the period to complete or terminate the contract.
Who Can Issue a Notice to Complete?
Either the purchaser or vendor may issue a Notice to Complete depending on the circumstances. For example, where a purchaser cannot complete their obligations due to delays in arranging finance, the vendor may issue a Notice to Complete stipulating a limited time frame for them to do so. Alternatively, if a vendor is not complying with their obligations under the contract, a purchaser can issue a Notice to Complete.
What if I don’t comply with a Notice to Complete?
If you do not comply with the Notice to Complete in the timeframe stipulated by the sender, then the contract will be terminated.
Where the sender of the Notice to Complete is the purchaser and the Notice to Complete is not complied with, they may be refunded any deposits they paid the vendor upon termination. They may also sue the vendor for any damages or losses incurred due to the termination of the contract.
Where the sender is the vendor, they may retain the deposit paid by the purchaser, and upon termination may also be entitled to:
- retain any other money paid by the purchaser under the contract as security;
- place the property back on the market; or
- sue the purchaser for any losses incurred due to the termination of the contract.
Can you Challenge a Notice to Complete?
It is possible to challenge a Notice to Complete in a variety of circumstances, including where:
- The Notice to Complete did not comply with the requirements set out in the contract, making it invalid;
- The sender was not ready, willing or able to perform their obligations under the contract when they issued the notice; or
- The sender granted the receiver an extension for the Notice to Complete but later rescinded this extension.
If you would like to issue a Notice to Complete,or wish to challenge one issued to you and don’t know where to start, please feel free to contact ATA Legal on (02) 8580 2312, or by email at info@atalegal.com.au, and we can assist you in navigating the law surrounding these notices.
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