Unless stated in the contract, the property is sold free of all encumbrances. This means that, at settlement, any mortgages, caveats and other encumbrances must be discharged so that the buyer receives a clear title.

If there is a mortgage or other encumbrance on the title, the seller must contact the relevant financial institution or other persons and request that the encumbrance be removed at settlement.

The most common reason that settlement is delayed by a seller is that the discharging financier is not ready to settle. If settlement is delayed for this reason the seller may be liable to pay penalty interest to the buyer.