Calculating due dates can be confusing, especially when contracts are signed on the weekend or a due date falls on a weekend or public holiday.
Why is it important to get it right?
- The seller may terminate if:
- a buyer does not pay the deposit by 5pm on the due date;
- a buyer does not give notice of finance approval by 5pm on the due date; or
- a buyer does not give notice that they are satisfied with their building and pest inspections by 5pm on the due date.
- As time is of the essence, it is essential that all parties are aware of their obligations and rights under the contract, especially with regards to time.
Below is a quick refresher on how to calculate due dates in contracts:
- A time period within a contract does not include the contract date.
- E.g. For a contract signed on a Wednesday, the relevant time period will begin on the Thursday.
- A time period within a contract begins, even where the contract date falls on a weekend.
- E.g. For a contract signed on a Saturday, the relevant time period will begin on the Sunday.
- A time period that ends on a weekend will automatically fall due on the next business day.
- E.g. If a condition of the contract is due on a Saturday, it will actually fall due on the following Monday.
- The contract date is the 28th February, 2015;
- The deposit is due within 48 hours of the buyers signing the contract;
- The building and pest inspections are due within 14 days of the contract date; and
Finance approval is due within 16 days of the contract date.
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The relevant due dates are as follows:
- The contract was signed on Saturday 28th February, 2015. Therefore all relevant time periods begin from Sunday 1st March, 2015;
- The deposit is due by 5pm on Monday 2nd March;
- The building and pest inspections are due by 5pm on Monday 16th March, 2015;
- As day 14 would fall on a Saturday, the condition is automatically due on the next business day (Monday).
- If Monday was a public holiday, the condition would fall due on the Tuesday.
- Finance approval is also due on Monday 16th March, 2015.
So who has to pay the rates and water on the day of settlement?
It is a term of the standard REIQ contract that the seller is liable to pay any outgoings (such as rates and water) and is entitled to receive rent up to and including the settlement date. The buyer is therefore liable for all outgoings and is entitled to receive rent from the day after settlement.