Lawyers in Auckland

Read
Our Blog

Changes to the Sale and Purchase Agreement

by Sirpa Gunn | on Aug 01, 2012 | No Comments

Last month the Ninth Edition of the REINZ/ADLS Agreement for Sale and Purchase of Real Estate was released.  The new agreement is a result of an extensive review of the entire standard form to ensure the form remains relevant and up to date with changing law and technology.  There are some important changes that impact both vendors and purchasers of property.

First the addition of “and/or nominee” has been made permanent.  This was frequently added to the prior agreements by real estate agents or purchasers.  Without this addition a purchaser still has the right to nominate any person to take the property however the nominee will not have the right to enforce the contact.  By adding “and/or nominee” the person who is completing the purchase is able to enforce the agreement even if they were not in existence at the time the agreement was entered into, for example a company or trust.  Permanently adding these words will ensure that this is not accidently left off the agreement by agents or purchasers.

The reference on the front page to the type of title being purchased has been re arranged.  This will not be an issue for a single home buyer but should be reviewed in case an agent selects the wrong type of title due to habit.

In previous additions there was the distinction between the settlement date and possession date.  This has now been removed with only the Settlement Date remaining.  The reason for this is due to the fact that the majority of agreements have both of these dates the same.  If you would like the settlement date and possession date to be different please contact the Conveyancing Shop Lawyers to modify the standard form agreement to meet your requirements.

A standard building report condition has been added to the front page and general terms of sale.  By selecting Yes on the front page the agreement will be conditional on the purchaser being satisfied with a building report.  The purchaser will have 10 working days from signing the agreement to obtain and approve the report.  The report must be prepared in good faith, by a suitably qualified building inspector, and in accordance with acceptable principles and methods. As a vendor it will be important to note the standard building report condition does not require the purchaser to give the vendor the option of remedying any faults found.  However if the purchaser does object to the report the vendor can request a copy of the report.  If you would like to modify the standard building report condition we can change the standard agreement to allow for a different time frame or the option to remedy faults found, just ensure you contact us before you sign the agreement and we can make the necessary changes.

There is the addition of Clause 6.2(1) which provides the chattels that are included in the sale must be “in reasonable working order, where applicable”.  If you have any chattels that are being sold with the property it will be important to ensure they are in reasonable working order prior to settlement.  Should you wish to sell any chattels that are not in reasonable working order then this will need to be specifically addressed in the agreement when drafted.

The changes that have been detailed in this article are not a complete review, rather they are the ones that a purchaser or seller of property should be aware of.  There have also been a number of changes to the agreement in relation to the way in which your lawyer will deal with the conveyancing of the property.  These are not generally a matter of concern for someone selling or buying a house, however if you would like more details please feel free to contact the Conveyancing Shop Lawyers on 09 638 6969.

Categories: News, Property Law
Tags: , , , , , , , ,

Comments are closed.