Does a Queensland Buyer Have to Accept a Settlement Delay?

Your seller’s solicitor emails at 3:45 pm on settlement day. Settlement won’t proceed — the seller’s bank has a paperwork issue. The seller is invoking their right to extend. Your buyer client is standing next to a removal truck, keys in hand, asking you what their rights are.

The answer is not straightforward, and what a buyer can do depends on exactly which contract they signed, when they signed it, and how far beyond the scheduled settlement date any delay pushes them. Getting this wrong costs buyers money, relationships, and sometimes the deal itself.

How the Queensland Buyer’s Rights on Settlement Delay Actually Work

The starting point for every settlement delay question in Queensland is the contract itself. Residential property contracts in Queensland typically provide for a settlement period of 30 to 90 days, though shorter or longer timeframes can be negotiated before signing. Once agreed, the settlement date becomes a binding contractual obligation — and unless the contract allows an extension, or both parties agree to one, settlement is expected to occur on that date.

This is not merely a matter of inconvenience. Clause 6.1 of the REIQ contract for Houses and Residential Land provides that time is of the essence. A party must pay the deposit, satisfy conditions, carry out obligations, and effect settlement when agreed. In Queensland conveyancing, “time is of the essence” carries significant legal weight. The former standard conveyancing contracts stated that settlement must occur on the settlement date — meaning if a party failed to fulfil their obligations by that date, even by one hour past 4 pm on the specified day, the other party was entitled to terminate.

The direct answer to the question buyers and agents keep asking is this: in most situations governed by a current REIQ contract, a buyer cannot simply refuse a seller-initiated delay and force same-day settlement. But the buyer’s rights — and their obligations — depend heavily on which contract version is in play and how far any extension runs.

The Clause 6.2 Unilateral Extension Right: What Changed and Why

The landscape shifted significantly on 20 January 2022. As of that date, the REIQ added a new clause to their standard form real estate contract that gives both the buyer and the seller the opportunity to increase the time for settlement by up to five business days. This was not a minor procedural tweak — it fundamentally changed the balance of power at the settlement table.

The change came following a tough period in Queensland when many developers, during the property boom following COVID-19, capitalised on buyers who were not ready to settle on the required day, often due to trivial bank paperwork issues. This saw many developers refusing to extend settlement, terminating when the buyer could not settle, claiming the deposit, and selling the lot to someone else for a higher purchase price. Standard Term 6.2 was the industry’s response.

The human cost of the old regime was well documented. In one widely reported case, the buyer’s bank (Westpac) missed the settlement deadline and was not ready to settle until the day after settlement. The buyers lost their $75,000 deposit when the sellers terminated. This case generated significant media and community interest in Queensland’s strict settlement rules. Another 2021 case involved just a 13-minute delay. A buyer had contracted to purchase a $580,000 house in Brisbane. The Commonwealth Bank was not ready to settle at 4 pm due to a minor oversight in the paperwork. The seller refused to grant an extension and terminated. The buyer lost her $29,000 deposit.

In response to growing concern about this perceived injustice, the Real Estate Institute of Queensland and the Queensland Law Society updated the terms of the REIQ contracts and published new editions of both.

How Clause 6.2 Actually Operates

Clause 6.2 allows the buyer or seller to unilaterally extend the settlement date by giving notice to the other party before 4 pm on the original settlement date, nominating a new date for settlement no later than five business days after the original settlement date.

If an Extension Notice is validly issued by one party to the other, the settlement date will be extended. The other party does not need to agree, as this is a unilateral contractual right. This is the critical point for buyers who believe they can simply refuse. Under a current REIQ contract, if a seller issues a valid Extension Notice before 4 pm on the scheduled settlement date, the buyer has no contractual mechanism to block it.

The clause is worded in such a way that it gives either party the right to unilaterally extend settlement without needing to provide any context or reason for the extension. Even if a party does not have a bank involved as part of the conveyance, they will still have a right to extend settlement, and this right can be exercised for any reason.

Multiple notices can be given. The seller and the buyer now have the right to unilaterally extend settlement, for any reason, by up to five business days after the scheduled settlement date — including the right to extend settlement on multiple occasions, for example by extending by one business day on five separate occasions. This right may be exercised by either the seller or the buyer or by both of them, but settlement may not be extended beyond the five business day limit.

The contracts that contain clause 6.2(1) include the Contract for Houses and Residential Land (17th edition), the Contract for Residential Lots in a Community Titles Scheme (13th edition), the Contract for Commercial Land and Buildings (9th edition), and the Contract for Commercial Lots in a Community Titles Scheme (8th edition). Agents need to know which edition they are working with — it is not compulsory in Queensland to use the most recent version of an REIQ contract and there may be previous versions in use.

What Happens When the Five Business Days Run Out

The five business day window under clause 6.2 is an absolute ceiling, not a starting point for further negotiation. Regardless of how many notices are given, and by which parties, settlement cannot be extended beyond a total of five business days from the settlement date under clause 6.2. If settlement does not occur by 4 pm on the fifth business day, the party that cannot settle on that day will be in default — whether that is the buyer or the seller — and the other party can terminate.

Once the five business day window expires without settlement, the full weight of default provisions kicks in. For a buyer in default, the consequences are serious. A buyer could stand to lose their deposit, and could also be responsible for paying any deficiency in purchase price on resale under Standard Term 9.6 of the contract.

When either party is in default beyond the clause 6.2 window, the non-defaulting party must consider serving a Notice to Complete. Both buyers and sellers can issue a Notice to Complete to the delaying party, usually allowing a 14-day period for the issue to be resolved. During that period, sellers can charge default interest to buyers and terminate the contract at the end of the period. Buyers, however, cannot charge sellers interest for the delay period but can still terminate the contract after the expiry of the 14-day period.

This asymmetry is important for agents advising clients. When the seller delays and the buyer issues a Notice to Complete, the buyer cannot accumulate penalty interest against the seller during the notice period in the way a seller can against a defaulting buyer. The buyer’s primary remedy at the end of an unresolved Notice to Complete is termination and recovery of the deposit — not a penalty interest windfall.

There is no right in the contract to claim compensation for costs incurred by one party if the other party needs to extend. The risk of arranging to move on the settlement date or close to it should be explained to the buyer and seller by their solicitor in advance.

The Penalty Interest Question

Whether penalty interest applies — and to whom — depends on the default position and which party triggered the delay.

The seller’s right to charge penalty interest is only available if the buyer does not pay an amount when due. If the buyer issues a valid Extension Notice prior to 4 pm on the settlement date, the balance of the purchase price will become due on the extended settlement date. The buyer will not be in default for failing to pay on the original date, and the seller is not entitled to charge penalty interest.

This is a critical protection for buyers who need to invoke clause 6.2 because their lender is not ready. Provided the notice is issued correctly and on time, the buyer is not in default and faces no penalty interest exposure for the extended period.

When the buyer is responsible for a delay beyond the clause 6.2 window, a primary consequence is that the buyer may be required to pay penalty interest on the outstanding purchase price for each day the settlement is delayed. The rate and terms of this interest are typically stipulated in the property contract.

The “Default Interest Rate” referred to in the Item Schedule of the REIQ contract relates to late payments of money as referred to in Clause 9.6 of the Conditions. If a payment due under the contract is not paid when due, the buyer must pay interest at settlement calculated at the Default Rate on a daily basis.

The default interest rate is specified in the contract’s Reference Schedule — agents should check this when the contract is prepared, because it directly affects buyer exposure in a delayed settlement scenario. The rate is typically expressed as an annual percentage applied daily.

When the Seller Is the One Delaying: Buyer Rights

The clause 6.2 right runs both ways. A buyer may receive an Extension Notice from the seller — and as discussed, they cannot refuse it within the five business day maximum. However, once that window closes and the seller is still unable to settle, the buyer moves from a position of accepting delay to one with genuine leverage.

If a seller delays settlement, the buyer has options. The buyer does not have to agree to an extension beyond the clause 6.2 rights. Depending on the terms of the contract, the buyer may be able to issue a formal notice on the agreed-upon settlement date stating they are ready to settle. If the seller cannot settle by the end of the day, the buyer could terminate the contract and potentially sue for damages.

This is where the Notice to Complete becomes the buyer’s primary tool. It crystalises the seller’s default, gives the seller a defined window to rectify it, and preserves the buyer’s right to terminate if that window expires without resolution.

Agents should understand one practical reality: additional costs can arise from a delayed settlement, including extended loan interest, bridging finance, storage and accommodation expenses. Buyers who have removalists booked, interconnected settlements, or fixed-rate bridging arrangements are particularly exposed. An extension of the settlement date can cause real issues for parties who make plans expecting their property to settle on the original date — for example, a buyer who has hired removalists with the intention to move in on settlement day, only for the seller to extend at the last minute. None of these costs are recoverable under the standard contract.

The Contract Version Problem: Older Editions and Non-REIQ Contracts

One of the most important practical points agents must understand is that clause 6.2 only exists in contracts from 20 January 2022 onwards. The new Standard Condition 6.2 provides that either party may unilaterally elect to extend the settlement date by up to five business days from the scheduled settlement date. However, this only applies to REIQ contracts from 20 January 2022 — there is no contractual right for parties to unilaterally extend settlement if the contract is dated prior to 20 January 2022.

For transactions on older contract editions, the original strict position applies. Previously, the settlement date could only be extended with the agreement of both the buyer and seller. If a seller on an older contract cannot settle and the buyer refuses to agree to a mutual extension, the buyer may be entitled to terminate immediately — and the seller faces full default consequences without the buffer of a unilateral five-day extension.

The clause 6.2 changes are not legislated — they came in response to industry recommendations made to the Queensland Law Society. That means non-REIQ form contracts — developer contracts, some commercial agreements, bespoke documents — may not contain equivalent protections at all. Agents dealing in off-the-plan sales, new estates, or commercial transactions need to check the governing contract carefully, not assume the REIQ standard terms apply.

The new Queensland Property Law Act 2023, which commenced on 1 August 2025 and replaced the Property Law Act 1974, introduces additional statutory provisions for settlement extensions in the context of “adverse events” — including cyclones, public health orders, or failure of electronic settlement platforms. The Property Law Act 2023 allows for settlement of a contract of sale to be extended where there is an ‘adverse event’ which prevents a party from completing settlement on the nominated date and time. In these circumstances, time will cease to be of the essence and the non-attending party will not be considered in breach of contract — provided they have taken reasonable steps to mitigate the effects of the adverse event on settlement.

Excluding or Modifying Clause 6.2 by Special Condition

Clause 6.2 can be waived by the parties by including a special condition amending the standard terms. Importantly, the agent should not provide any advice to the parties about waiving this clause, as this may constitute the provision of legal advice.

There are legitimate commercial situations where buyers will want clause 6.2 excluded. If it is critical that settlement occurs on the original date — for example, due to fixed finance arrangements, back-to-back settlements or specific possession requirements — parties should seek legal advice before signing the contract to ensure an appropriate special condition is included to exclude or limit the operation of condition 6.2.

Subject-to-sale transactions are a common example. Where a buyer’s contract of sale and purchase are linked, a unilateral last-minute extension on one can cascade through to the other. If the parties intend to enter into other contracts that settle contemporaneously, they should always seek legal advice first. The parties’ solicitors can draft a special condition to allow for flexibility so that if a preceding contract is extended, it will not cause the subsequent contract to fall over.

Agents identifying these scenarios should flag the issue to the parties and recommend solicitor input before contracts are signed. This is not legal advice — it is the kind of practical observation that separates an experienced agent from one who simply fills in the schedule. As the agent, you may bring the risks of settlement timing to the parties’ attention when a settlement date is chosen.

The PEXA and Electronic Settlement Dimension

A separate standard term, 6.3, deals with late signing of documents in electronic settlements such as PEXA. As electronic settlement has become standard across Queensland, the mechanics of how and when documents are signed and lodged in the PEXA workspace have become a source of delay in their own right. An agent who understands that clause 6.3 exists — and that it addresses specific e-conveyancing delay scenarios — is better placed to communicate realistically with parties in the lead-up to settlement.

The Property Law Act 2023 also takes into account the possibility of technical issues such as essential computer systems becoming inoperable at the time of settlement. Where the buyer cannot verify the seller’s title because of computer issues at the land registry, time stops being of the essence and the seller is not taken to be in breach of contract. This is a statutory protection that sits alongside — not instead of — the contractual provisions in the REIQ standard form.

What This Means for Queensland Agents

The short answer to whether a Queensland buyer has to accept a settlement delay is: it depends on the contract, and the answer has fundamentally changed since January 2022.

Under a current REIQ contract, a buyer cannot refuse a seller-initiated Extension Notice that complies with clause 6.2. The notice is unilateral, requires no stated reason, and shifts the settlement date by operation of contract alone. The buyer’s only recourse within that five business day window is to ensure their own obligations remain on track for the extended date.

Once the five business day maximum under clause 6.2 has been used — by either or both parties — the position hardens. The party that cannot settle is in default, and the other party’s rights to terminate and pursue damages become live. A Notice to Complete is the standard mechanism for crystallising that default.

Practically, agents should understand several things that arise in almost every delayed settlement situation:

• The clause 6.2 right belongs to both parties. A buyer who needs time to resolve a finance issue can use it, just as a seller can.
• A valid Extension Notice issued by the buyer before 4 pm on the settlement date prevents the seller charging penalty interest for the extended period.
• No contract right exists to claim compensation for practical losses — moving costs, temporary accommodation, extended bridging finance — caused by a valid Extension Notice. The risk belongs to the party that planned around a settlement date.
• Older contract editions and non-REIQ form contracts do not contain clause 6.2. The strict time-is-of-the-essence position under those documents remains intact.
• Agents should never advise parties whether to include, exclude, or modify clause 6.2 — that crosses into legal advice territory and must be referred to a solicitor.

The most useful thing an agent can do before the settlement date arrives is set realistic expectations early. The most common cause for delay in practice, for both sellers and buyers, is the parties’ financiers not being given enough time to settle. Agents should encourage the parties to speak with their financiers and confirm their current processing times to ensure contract dates are realistic.

A buyer who arrives at settlement day knowing that up to five extra business days may legitimately be invoked — and has planned their removalists, tenancy end dates, and financing accordingly — is a buyer who does not call their agent in a panic at 3:55 pm. Setting that expectation at the time of contract is part of the job.