Precedent clauses for use with the REINZ Agreement for buying and selling Real Estate

These are precedent clauses which may be suitable for use with the REINZ agreement for buying and selling real estate. They are to be treated as precedents only, and will need to be tailored to fit particular circumstances. Their publication is not to be taken as legal advice that the clauses are suitable for your given circumstances and you are advised to obtain specific legal advice before using the precedents or adapting them to your use.

Conditional on Specialist Report

Deposit of Plan – Subdivision

Due Diligence Condition

GST Off-Set

Solicitor’s Approval

Tenancy After Settlement

1.	CONDITIONAL ON SPECIALIST REPORT
1.1	This agreement is conditional on the buyer being satisfied with a report on description of matter to be reported on obtaining from specialist of his/her choice on or before date for satisfaction. Should the buyer in good faith be dissatisfied with any matter contained in the report the buyer may terminate this contract by notice in writing to the seller or the seller’s solicitor. This condition is inserted for the sole benefit of the buyer.
1.2	Standard Clause 14 of Section B of the Agreement for Buying and Selling Real Estate does not apply to this condition.

DEPOSIT OF PLAN - SUBDIVISION

*Choice (A) - Deposit of Plan*

1.1

Deposit of Plan

(a)	The seller has received all necessary resource and engineering consents of the Name of Council Council for the subdivision of the land into sections for residential/commercial use generally in accordance with the attached plan (“the subdivision”).
(b)	The seller will do everything reasonably necessary to have a plan of the subdivision deposited in the Land Titles Office at Name of Land Titles Office and obtain a separate title for the property.
(c)	The buyer will not be entitled to a transfer of the property or to call for title until the new title is available.
(d)	The seller gives no warranty as to the date when title will be available.

*Choice (B)*

Council Consent and Deposit of Plan.

1.2

The property is part of land which the seller wishes to subdivide (“the seller’s land”).

1.3

This agreement is conditional on the seller receiving by *Conditional date for Choice (B)* all necessary engineering and resource consents from the *Name of Council* Council for the subdivision of the seller’s land on terms and conditions satisfactory in all things to the seller.

1.4

If the condition in this clause is satisfied the seller will do everything reasonably necessary to have a plan of the subdivision deposited in the Land Titles Office at *Name of Land Titles Office* and obtain a separate title for the property.

1.5

The buyer will not be entitled to a transfer of the property or to call for title until the new title is available.

1.6

The seller makes no promise as to the date when title will be available.

Easements

1.7

The seller reserves the right to grant or receive the benefit of any easements, restrictions or other encumbrances or rights (collectively “encumbrances”) which may be required in order to obtain the deposit of the plan of subdivision.

1.8

The buyer will take title subject to or with the benefit of any encumbrances.

1.9

The buyer will execute all documents and do everything reasonably required for the deposit of the land transfer plan and/or the implementation of the encumbrances.

1.10

All documents relating to encumbrances may include clauses which the seller’s solicitors consider necessary or desirable.

Measurement and Area

1.11

All measurements and areas are subject to any variation required by the local authority, Land Information New Zealand or the Land Titles Office.

Caveat

1.12

The buyer must not lodge a caveat against the seller’s title until and unless both the following conditions have been satisfied:

(a)	the plan of subdivision has deposited at the Land Titles office and a title to the land to be transferred to the buyer has issued; and
(b)	this agreement is unconditional in all respects.

Conditional on Title

1.13

This agreement is conditional on the seller’s lawyer giving notice to the buyer’s lawyer that a separate certificate of title has issued for the property. This condition is to be satisfied by the day of 20.

DUE DILIGENCE CONDITION

[Delete conditions 1, 2, 3, 4 and 5 in Section A]

1.1

This agreement is conditional on the buyer being entirely satisfied that the property is suitable for the buyer's intended use at the agreed purchase price. In determining whether this condition is satisfied the buyer may undertake a due diligence investigation including (but not limited to) an investigation of:

(a)	the soundness and quality of the buildings, having due regard to their age;
(b)	zoning or permitted use aspects of the property as they relate to the buyer's or tenant's use or intended use of the property;
(c)	the leases affecting the property;
(d)	the identification of the position of the building in relation to the boundaries of the land;
(e)	all legal and title issues relating to the property and any encumbrances or memorials registered on it.
(f)	the commercial viability of the proposed purchase including the terms of any finance obtained;
(g)	compliance by the seller and tenants with applicable statutory and regulatory requirements including the Building Act 2004, the Resource Management Act 1991 and territorial authorities by-laws;

1.2

The parties acknowledge that this condition is inserted for the sole benefit of the buyer and may, at anytime prior to this agreement being cancelled, be waived by the buyer giving written notice of waiver to the seller.

1.3

The parties acknowledge that the satisfaction of this condition shall be at the sole and absolute discretion of the buyer. The buyer is not obliged to state any reasons for the buyer's lack of satisfaction.

1.4

This condition is to be satisfied within fifteen working days of the date of this agreement.

1.5

The seller will co-operate with the buyer in the prompt provision to the buyer of all documentation held by the seller and reasonably required by the buyer to satisfy this condition. Should the seller delay in the provision of such information beyond five working days from the buyer having requested the documents, the period within which this condition is satisfied shall be extended by the same period of such delay.

1.6

Standard clause 14 of REINZ Book of Standard Clauses does not apply to this condition. Clause 14.1.1 of the REINZ Book of Standard Clauses is deleted.

GST OFFSET

1.1

In respect of the supply from the seller to the buyer under this agreement the parties have agreed:

(a)	The seller and the buyer shall co-operate to approach the IRD to do a GST offset in respect of any GST payable;
(b)	The seller and the buyer shall co-operate to each lodge the appropriate GST return with IRD at the appropriate time;
(c)	The seller shall provide the buyer with a GST Tax Invoice on the date agreed by the parties;
(d)	The seller and the buyer will agree with IRD that the GST is transferred from the buyer’s account with the IRD to the credit of the seller’s account with IRD, on the seller’s payment date; and;
(e)	In the event a GST offset is not approved by the IRD prior to the GST Date the buyer shall pay GST, if any, on the purchase price to the seller on the GST Date and the provisions of clause 15.2 shall apply.

1.2

The definitions included in clause 15.1 shall apply to this clause.

1.	SOLICITOR’S APPROVAL
	*Choice (A)*
1.1	This agreement is an immediate binding contract but the buyer’s obligations will be suspended until it is approved by the buyer’s lawyer. The solicitor may take into account all aspects of the contract and the wishes of the buyer.
1.2	Clause 14 of the REINZ Standard Book of Clauses does not apply to this clause.
1.3	If the lawyer’s notice is received by the seller the buyer must pay the seller $1.00. Except for that obligation this agreement will be void. All moneys paid under it must be refunded and neither party will have any claim against the other.
	*Choice (B)*
1.4	If written approval is not given before 4.00pm on Specify date the buyer must pay the seller $1.00. Except for that obligation this agreement will be void. All moneys paid under it must be refunded and neither party will have any claim against the other.

1.	TENANCY AFTER SETTLEMENT
1.1	The seller may reside on the property as the buyer’s tenant for Period of tenancy, eg; three months from the date of settlement.
1.2	The rental will be * Amount of rental (plus GST ?)* to . Period for payment of rental, eg; per month paid in advance.
1.3	The terms of the attached tenancy agreement will apply.
1.4	Clause 5 of Part 2 Section A of the agreement does not apply to the tenancy detailed in this clause.

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