Many buyers and sellers assume that once contracts are signed and finance is approved, settlement day is simply a formality. In reality, settlement is the most critical stage of the entire conveyancing process—and also the point where costly mistakes can still occur.

Even on the day of settlement, unresolved legal or financial issues can delay completion, expose parties to penalty interest, or put significant sums of money at risk. Understanding what happens at settlement, and why final checks matter, is essential for anyone buying or selling property in Victoria.

What Actually Happens on Settlement Day?

Settlement is the legal process where ownership of a property is formally transferred from the vendor to the purchaser. In Victoria, this is usually completed electronically via the PEXA platform.

At settlement, the following must occur simultaneously:

• All funds are transferred correctly

• Mortgage discharges and new mortgages are registered

• The transfer of land is lodged

• Ownership records at Land Use Victoria are updated

Only when all these steps are completed successfully can the purchaser receive the keys.

Common Risks That Can Arise at Settlement

Despite careful preparation earlier in the transaction, several issues can still surface at the final stage.

1. Incorrect Settlement Adjustments

Settlement figures must account for adjustments such as council rates, water rates, owners corporation fees, and land tax. If these calculations are incorrect, one party may be required to pay more than they should—or settlement may be delayed while figures are corrected.

2. Outstanding Debts or Charges

If rates, owners corporation levies, or other charges remain unpaid, they can prevent settlement from proceeding. In some cases, undisclosed land tax liabilities may only be identified at the final stage.

3. Errors in Legal Documentation

Mistakes in party names, title references, or transfer details can lead to rejection by Land Use Victoria. Even minor discrepancies can cause delays and additional costs.

4. PEXA or Lodgement Delays

Settlement relies on all parties completing their tasks within strict timeframes. Delays in document signing, fund clearance, or lender approvals can cause settlement to fail or roll over.

5. Penalty Interest and Financial Consequences

If settlement is delayed due to unresolved issues, penalty interest may apply under the contract. In serious cases, parties may also face claims for losses caused by the delay.

Why Settlement Checks Are Critical

Settlement is not simply about transferring funds—it is about ensuring that every legal and financial obligation has been satisfied before ownership changes hands.

Professional settlement checks typically include:

• Verifying settlement figures and adjustments

• Confirming payment of all rates and charges

• Ensuring correct preparation and execution of transfer documents

• Coordinating with banks, brokers, and other parties

• Monitoring PEXA milestones and compliance

Without these checks, buyers and sellers may be exposed to risks that only become apparent when it is too late to resolve them easily.

How an Experienced Conveyancer Protects You

An experienced conveyancer plays a critical role in managing settlement risk. Their responsibility extends beyond document preparation to ensuring that settlement proceeds smoothly and securely.

At DY Conveyancing Melbourne, settlement preparation includes:

• Reviewing all financial adjustments in detail

• Confirming no unexpected liabilities remain

• Ensuring legal documents are accurate and compliant

• Coordinating settlement timelines with all parties

• Monitoring settlement progress until completion

This level of oversight helps prevent last-minute surprises and protects clients from unnecessary delays or financial exposure.

Final Thoughts

Settlement day marks the legal completion of a property transaction—but it is not a step that should ever be treated as routine. Careful preparation, accurate documentation, and thorough final checks are essential to ensure a successful transfer of ownership.

Whether you are buying or selling property in Victoria, understanding the risks that can arise at settlement—and having the right professional support—can make the difference between a smooth completion and a costly dispute.

If you are approaching settlement and want to ensure everything is handled correctly, seeking professional conveyancing advice early can help safeguard your transaction through to the final step.