Penalty interest is compensation one party can demand from the other when settlement is late. If settlement is not completed within three business days after the settlement date for a reason attributable to the other party, you can demand interest at 9% per annum on the balance of the purchase price.

The three business days are a threshold rather than a free period. Once they pass, the interest is calculated from the settlement date itself to the date settlement is completed, so those first three days are included.

Your right to it depends on you being ready, willing and able to complete on the settlement date. So does your lender if you have one. If you weren’t ready, the right starts from the date you give the other party written notice that you now are.

We will only claim penalty interest for you if you instruct us in writing to do so. See Penalties for late settlement and What is the O&A?.