What happens if I settle a property around Christmas?

One of the common questions we get at Opes Partners is: “What happens if I settle a property around Christmas?”

Some investors start to panic when they learn they’ve got a Christmas-time settlement.

If that’s you, you might think “Is my property going to get tenanted over the break?”

In this article, you’ll learn the 4 steps you should take if your settlement falls around Christmas. You’ll also learn how to find a tenant during the silly season.

Key points:

• Yes, you can find a tenant during the holiday break
• Most property managers run a skeleton crew over Christmas
• Discuss with your developer when you will settle. Try to push it into January to avoid a pre-Christmas rush
• The days between December 24 and January 5 (sometimes January 15) are not classed as working days by all sales and purchase agreements under the general terms of sale
• Lawyers, mortgage brokers and most offices close from Dec 24 - Jan 3.

Why do so many settlements fall around Christmas?

When you buy a New Build, the settlement date can change. Remember the settlement day is when you pay for the property and become the official owner.

Sometimes the building of a property can change. The developer might have planned to finish the property in September, but then a spanner gets thrown into the works and the finish date gets pushed out to December.

Generally, developers will push to get their properties finished before the Christmas break. That’s so they get cash in the bank and don’t have to pay interest to the bank over the public holidays.

So it’s not unusual that your settlement might happen around Christmas.

So what happens if it does? Here are the 4 steps you can take.

Step 1: Find out the exact settlement date

The first step is to find out exactly when you are going to settle.

If you know it’s coming up in December, you need to find out from your developer when.

You’ll either settle before Christmas Eve, or in early January. No settlements happen between Christmas Day and January 4.

That’s because most offices shut between Christmas Eve and January 3.

The days between Dec 24 and Jan 5 (sometimes Jan 15) are not considered working days in your contract.

The developer triggers the settlement process when they give you a “settlement notice”. This needs to happen 10 working days in advance.

What does that all mean in 2023?

Your developer has until Friday, December 8, to give you notice if they want you to settle before the end of year.

If they give you a settlement notice after that, you’ll settle in mid-January.

What if you think your property may need to settle before the end of the year?

Talk to your Client Relationship Manager to find out your approximate settlement date.

Step 2: Get in touch with your lawyer early

The settlement process involves a lot of steps.

Some of these professionals are contactable over the break, but most aren’t.

So if you need to settle in early January you’ll need to organise most of the details before Christmas.

Let’s start with your lawyer.

Most lawyers go on leave for the entire shutdown period (December 24 - January 3).

So it’s unlikely that you’ll be able to pick up the phone and talk to your lawyer during the Christmas period.

Some will have a skeleton crew available on the non-stat days, but most don’t. So you can’t work with your lawyer during the Christmas break.

Get the details sorted before you (and they) go away.

FAQ:

When do lawyers go on leave?

Almost all law firms will close for the shutdown period, but you might like to check to see if your law firm has a skeleton crew working on the non-stat days.

This is in case you want to contact them in an emergency.

How do the working days work during the Christmas period?

The clock stops on working days between December 24-January 5, and are not classed as working days.

This is in all sales and purchase agreements.

Step 3: Make sure your property manager has a skeleton crew

Yes, it is still possible to get your property tenanted ... even if you settled on December 24.

Most property managers run a skeleton staff over the holidays, but not all do.

If you settle before Christmas, make sure your property managers have a skeleton crew.

Here at Opes Property Management, we run a skeleton crew to make sure we always have someone to do viewings.

Tom Greene, of Opes Property Management, says: “It’s a bit quieter over this time, but I’ve had someone move in on New Year’s Day".

He also says that in 2022 some investors had to settle on December 23. This was moved forward from January 6.

It’s not the end of the world if this happens because there should be someone available to do viewings.

But just remember that moving companies aren’t always open. So, even if you have a keen tenant, they may not be able to move in.

FAQ:

Can I get a tenant over Christmas?

Yes. Property managers often run a skeleton crew over the shutdown period. This means they cover viewings and tenancy applications.

But they usually don’t do inspections over this time.

Do people move in over the Christmas break?

Yes. It is a lot quieter during this period, but some people are still looking for places to live.

Will property managers do viewings during this time?

Depends. You’ll need to check with your particular property management company. Here at Opes Property Management we will, but not all companies do.

Step 4: Talk to your mortgage broker

If your settlement happens in early January, get organised well before Christmas.

It’s unlikely your mortgage broker will get a “yes” from the bank on Christmas Eve. And most will be shut over the Christmas break.

So don’t leave it until the last minute. Otherwise, you may have to get a last-minute approval in January. This will cause stress, and you may need to pay penalty interest.

Francie, of Opes Mortgages, says: “The settlement always gets pushed out.

“BNZ usually stops giving approvals closer to Christmas, but some banks have been known to approve mortgages on Christmas Eve.”

The rule of thumb is, it’s pre-Christmas or wait till after the stat days.

So ... should I panic if my property settles over Christmas?

The key message is to have a game plan in place, well in advance.

If you know you are settling near, or around the Christmas break, start thinking about it now.

But no, you don’t have to panic. The days between Christmas Eve and January 5 are not considered working days.

Even if settlement begins before Christmas, you won’t need to settle until mid-January.

This is a good thing, because your lawyer and your mortgage broker will be on a beach sipping a cocktail and/or eating Christmas Day leftovers.

Some organisations, like the Conveyancing Shop, can offer legal services on non-stat days, but you need to contact them in advance to see if they would be able to help you.

What if you’re worried about finding a tenant? Most property management companies run a skeleton crew to do viewings.

Sure, it may be a little quieter, but it’s not uncommon to have Christmas move-ins.

Chat with your property management company ahead of time if you’re worried.