Outgoings at settlement can be confusing.
We regularly receive a lot of queries regarding what the seller needs to pay prior to settlement. The contract provides that any outgoings (rates, water, body corporate) that are issued prior to settlement must be paid on or before settlement. This is to ensure that all outstanding debts are paid to NIL for the buyer to take over. Often this means that the seller is paying bills for a period of time that they no longer own the property.
At settlement, adjustments are made to ensure that each party pays their portion. As such, if the billing period extends beyond settlement, the buyer will reimburse the seller for the overpayment through the adjustments.
This means that each party is only paying for their portion of the outgoings and when the buyer takes ownership of the property, all debts will be paid to NIL.
Remember we are here to help!
Please feel free to contact us if you have any queries regarding the seller’s obligations under the contract.