With the latest version of the REINZ/ADSL (Auckland District Law Society) Sale and Purchase Agreement now in circulation, there are a couple of major changes buyers and sellers need to be aware of.
It has been 7 years since changes of this scale have been made to the Sale and Purchase Agreement. It is a legal and binding document used between buyer and seller when transacting residential property in New Zealand, so important for buyers and sellers to understand these changes.
The most significant change is to the finance clause. In the past if the purchaser said they couldn’t obtain finance; they could pull out of the contract with verbal notice.
Now under the new finance condition, purchasers will be required to provide evidence with an email or letter from their bank confirming that finance has been declined. Without this, purchasers could be forced to proceed with the purchase or face expensive legal action.
Therefore, it is essential buyers talk to their bank or mortgage broker prior to the buying process and definitely prior to signing the new ‘Version 10’ Sale and Purchase Agreement.
Other changes include:
- Chattels and Fixtures have been redefined giving clarity around ‘operational’ functionality and compensation process.
- Toxicology report regarding contamination by the preparation, manufacture or use of drugs.
- Disputes resolution compensation process to manage disputes between vendor and purchaser.
- GST clause has been revised giving clarity around Vendor and Purchaser obligations.
- Deposit release timeframes have been defined clearly.
- Fax Machines are no longer referred to.
- Tenancy documentation requirements have been increased for better clarity.
- General formatting and language changes.
Talk to your real estate agent as soon as you begin your real estate journey. They are trained to educate buyers and sellers regarding the changes above.
