New Zealand is in the middle of a unique situation, and it is likely to be stressful for all parties involved in a transaction. Be kind, and consider the needs of others when you’re communicating about a transaction.
The Real Estate Authority (REA) recommends that, where possible, parties agree to delay settlements until the level 4 alert is reduced.
For general information about the current COVID-19 situation please visit covid19.govt.nz
Summary
- Land Information New Zealand (LINZ), most banks and many lawyers, conveyancers and real estate agents are still working remotely and online.
- Talk to your agent and lawyer or conveyancer about what to do — the New Zealand Law Society has issued guidance to lawyers about how to manage property transactions during the lockdown.
- We recommend that you and the other party defer settlement until after the lockdown period.
- Real estate business can only go ahead if it doesn’t require people to break the lockdown rules.
- During COVID-19 alert level 4, buyers cannot move into new properties and sellers cannot move out of their properties.
- You can find information about what you can and can’t do during lockdown here.
Sellers who are still marketing
If you don’t yet have an offer to buy your property, we recommend you talk to your agent about how you might market your property during this time.
While New Zealand is at alert level 4, you won’t be able to hold open homes or have potential buyers visit your property. You could explore other options, like virtual open homes.
If you don’t want to continue marketing your property at the moment, talk to your agent. You might agree to withdraw your property from the market or put your marketing campaign on hold. Usually, sellers pay the marketing costs upfront, and it may be that most of those costs have been spent, for example, Trade Me advertising may have been placed and paid for. Talk to your agent about what will happen to any unspent funds if you put your campaign on hold.
Sellers who have received a conditional offer
We recommend that you talk to your lawyer or conveyancer and your agent and agree with the buyer to extend the conditional period until the alert level is lowered.
While New Zealand is at alert level 4, your buyer may not be able to access the services they need to fulfil their conditions, for example, local councils may not be able to provide a LIM and building inspectors will not be able to visit the property to inspect it. Also, you may not be able to fulfil conditions the buyer has requested.
Some law firms and agents are still working remotely, but there may be delays in service.
Sellers who have received an unconditional offer
Where possible, we recommend that both parties agree to delay settlement until the level 4 alert is lowered.
Talk to your lawyer or conveyancer about the best approach for your transaction.
The New Zealand Law Society recommends that settlements are deferred for at least 10 days after the current alert level 4 is reduced. Be aware that, if all settlements are deferred for the default 10 days, it may be difficult to find a moving company to help the settlement process. Consider choosing a longer period.
During alert level 4, the buyer cannot move into the property because only movement in order to access essential services is allowed. It may still be possible for settlement to go ahead if it doesn’t involve people moving, for example, if the sale is a tenanted property and the tenants are staying.
LINZ, all banks and many lawyers and conveyancers are still working, although it’s likely there will be delays in service. Pre-settlement inspections cannot take place at alert level 4.
Be aware that the buyer’s situation may be uncertain. If the buyer’s purchase was conditional on selling their own house, they might not be able to settle on their own transaction if they can’t physically move out of their house. Be considerate of the circumstances and needs of the buyer.
Buyers who have made a conditional offer
We recommend that you talk to your lawyer or conveyancer and agree with the seller to extend the conditional period until the alert level is lowered.
If a seller has accepted a conditional offer from you, it is likely you won’t be able to fulfil your conditions during the lockdown. At alert level 4, non-essential services are closed or not operating, including building inspectors, for example. Also, the seller may not be able to fulfil any conditions you have requested.
Some lawyers and conveyancers are still working remotely, but there may be delays in service.
Buyers who have made an unconditional offer
Where possible, we recommend that both parties agree to delay settlement until the level 4 alert is lowered.
Talk to your lawyer or conveyancer about the best approach for your transaction.
The New Zealand Law Society recommends that settlements are deferred for at least 10 days after the current alert level 4 is reduced. Be aware that, if all settlements are deferred for the default 10 days, it may be difficult to find a moving company to help the settlement process. Consider choosing a longer period.
During alert level 4, you cannot move into a new property because only movement in order to access essential services is allowed. It may still be possible for settlement to go ahead if it doesn’t involve people moving, for example, if the sale is a tenanted property and the tenants are staying.
LINZ, all banks and many lawyers and conveyancers are still working, although it’s likely there will be delays in service. Pre-settlement inspections cannot take place at alert level 4.
