Time lapse video of our office on settlement day.
Bonnie Warburton’s behind the scenes glimpse at five crazy days.
Attempting to settle 270 apartments on one day is no easy task and not for the faint hearted. Whilst the pressure of the SugarTree settlement at times was enormous, the satisfaction at the end was well worth the effort and late nights.
Two things were critical, great systems and a good team of people.
The end of a long process
The initial sale of the units is just the beginning. Getting the development off the ground and having sufficient pre-sale agreements; navigating through the development funding requirements and the huge complexities of a large scale unit title subdivision; obtaining the titles weeks before the building reaches completion. Followed by the anxious wait for the Code of Compliance Certificates (CCCs) to issue. All these things must happen before THE SETTLEMENTS can take place.
A learning journey
One thing I have learned is that I am much better at using spreadsheets than I used to be. They are so clever, if the user knows what they doing and how to make the most of them. I am still learning every day, even though numbers and spreadsheets are not my thing. The only numbers I like are the black ones on my bank statement!
The secrets of our success
Being organised is so important. When a CCC issues, the five working days until settlement are gone with a blink of the eye.
These are the critical factors:
- Have all data in a spreadsheet just waiting for a settlement date to be inserted.
- Maintain a great working relationship with the developer client (who also has organised people and good systems too), it makes huge difference. Only a team can pull off a successful project like this.
- Ensure you have a good working relationship with the lead surveyor; essential to resolving the practical issues which arise.
- Have titles issued weeks early to allow purchasers’ solicitors and their lenders to get organised more quickly too. They have the time to read the body corporate rules, check out any easements and encumbrances on the title and better inform their purchasers and their lenders.
The life of a legal executive acting for the vendor is made much easier when the purchasers’ solicitors are super-organised. I love it when they…
- Produce loan documents early, in anticipation of settlement.
- Are pro-active about managing the bank’s requirements on a new-build, including having any valuations done early.
- Have clients sign their Authority and Instruction forms early.
- Set up e-dealing in advance (rather than waiting for the mad rush once the settlement date is triggered).
These four provisions can make a big difference and create a lot less stress. Potentially they also help avoid penalty interest for the purchaser if they are late to settle.
Forewarned is forearmed
One thing which really helps is meeting with the developer’s lenders to discuss their requirements for obtaining the discharges of mortgages. Understanding how they want information delivered and working off estimated figures (based on a best guess settlement date) meant we were able to make the process run more smoothly. Getting discharges of mortgages well before settlement was key. Signing correct 270 e-dealings took days. It was dull, boring, very time consuming but super important.
The worst things [rant warning!]
Late purchaser nominations and chasing e-dealing numbers. I fail to understand how purchasers can be undecided about their purchasing entity up to two days before settlement. They’ve had two years to decide! [end of rant].
My crazy week
Once that final trigger for settlement happens, we jump to it, all guns blazing. No matter how organised you are, how many late nights you have worked or mail merges you have prepared in anticipation, the pressure is on.
Firstly, we had to get fax notifications out on 270 sales. Yes, faxes not emails! I know, right? In this day and age notices must still be faxed with a transmission confirmation. An email is not deemed to be have been received unless you get a reply lodgement of receipt (not an automatic generated one either). Imagine, trying to get 270 email acknowledgements! So yes, old fashioned faxes are sent – all by 5pm to trigger the same settlement date. We eagerly awaited the printed transmission confirmations. It took hours!
The inbound emails started to arrive, hundreds of them! The settlement date is triggered and now everyone needs their settlement statements – yesterday! The client wants to settle early – what? I thought we had five working days! The pressure just tripled to get the 270 settlement statements prepared and sent out, with final figures to the mortgagees for approval.
Are all 270 e-dealings signed correct yet? Oh wait we are missing some numbers still. Purchasers haven’t given them to us yet. Can we just send undertakings on those we do have? Oh no, some e-dealing numbers are wrong or have wrong title references on them, no transferee details – so we cannot sign correct. Can this get any harder? E-dealings with partial discharges and transferee’s names inserted, what a relief!
Are we ready to settle any yet? Too bad we have to be ready. Our statements are prepared. Our checklists are ready. Our internal receipts, journal transfers and payments for each of the 270 files are set up. By day three we had broken the back of all work required and were ready for those few purchasers who wanted to settle early. I breathe a sigh of relief as the pressure starts to ease a bit. It is a good practice run to test our systems and procedures and see what is working well and what we might tweak here and there. We roll with it, reassess and change tack slightly on day four.
More units settle and our modified systems seems to be working better. We are ready for the hundreds which need to settle on day 5 (Monday). The long hours in the weeks leading up have paid off and I don’t need to work all weekend. We are ready to go and by Friday 40 out of the 270 are settled. I can have a weekend to charge my batteries ready for a super busy Monday.
Everyone in the team has their jobs, it’s all hands on deck and no-one is allowed to be sick…right? Wrong! Murphy strikes and one of our team becomes extremely ill and is in quarantine on Sunday night. Really? The one person who hasn’t had a sick day in 10 years is quarantined! Quite funny really, although not so much for him.
8am Monday we reshuffle resources and are ready for the Reserve Bank to open at 9am. At 9.15am we get our first settlement. Woohoo, the gates are open. We are off and racing. Albeit very slowly at first. The day is a steady stream of settlements and the systems are procedures are working well. The office is a well-oiled machine. Everyone has a specific role. Everyone forms a part of the settlement chain. (The time-lapse video captures the action.) By 2.30pm we had broken the back of the settlements and by 3.30pm completed even more. By 4.30pm the same day banking system has closed off and the settlements for the day are done. All that remains is the time-consuming process of releasing e-dealings for all those which have settled. 200 settlements achieved on that day and only a few late ones left to incur penalties.
By 6pm I have glass of Verve in my hand and am celebrating a wonderful achievement. Just the one glass, as unbelievably, we have another sell down settling tomorrow.