Have we got the balance right? Is caveat emptor dying a slow death?

 A recent decision by the real estate agents disputes tribunal has left real estate agents and lawyers re-examining responsibilities on a sale.  A purchaser looked for and thought they had found a property that was a house and income unit.  The property had a separate one bedroom flat and was marketed by the agent as…

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What if Council information is wrong?

I once heard a story about a property developer who purchased a property for residential redevelopment.  Integral to the due diligence investigations was a LIM which clearly identified the location of services.  Services were in a convenient position to enable redevelopment and the developer in our story proceeded in reliance on the Council records he had…

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Merry Christmas Mrs Forster

Right at the end of last year a High Court judgement was released for the first prosecution under section 141 of the Real Estate Agents Act 2008.  That is the section that prohibits a person who is not licenced under the act from carrying out real estate agency work.  The section came into force on…

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Buying a bach?

If you become tempted to purchase a bach over the Christmas period (as a certain partner of ours did one year) then an agreement on an envelope will certainly be legally enforceable if done properly.   Debra bought her family bach by recording an agreement on an envelope that included adoption of the standard ADLS/REINZ terms…

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Pre-auction legal checks

In an auction you generally accept the vendor’s title, warts and all.  In a recent contract I reviewed that meant there were obligations imposed on the purchaser to pay to have stormwater and sewerage systems inspected annually and covenants limiting what colour the house could be painted.  There are all sorts of things that might be…

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You snooze, you lose – RMA and the developer

Agreements for sales off the plans will include sunset clauses – or "twilight" clauses as a client called them the other day.  I like that new name it seems more accurate somehow.  They will also be subject to s225 of the Resource Management Act.  It is an interesting section, aimed at protecting the purchaser.  First it gets…

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Compulsory GST zero rating – new GST rules

What is CZR? From 1 April 2011 it became compulsory for certain land transactions to be compulsory zero rated (CZR).  This means that GST will be charged at the zero percent.  The regime will apply to almost all transactions involving land that are made between GST registered parties.  There are some limited exclusions.   It is…

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New tender form

Real estate agents have commonly had their own form of tender conditions. The tender conditions were generally similar and most included terms of sale very close to the ADLS/REINZ form of agreement for sale and purchase.  A new standard tender form is welcome.  In a tender there are two contracts.  The first contract is the tender process…

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Possession

   Possession Before Settlement Sometimes on the sale of a residential property, the purchaser wants possession even though settlement is not going to take place when expected.  That can occur for a number of reasons: The vendor is not ready. The purchaser cannot settle yet. For some reason the parties agree to extend the settlement…

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Subdivisions That Involve Common Areas and Societies

Common areas and the requirement to become a member of a society or a shareholder in a company have been popular means of managing residential subdivisions over the last decade.  They necessitate compliance with the Securities Act 1978 although an exemption from full compliance has been established for these types of developments.  Provided a developer…

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GST A Vendor Can Collect – 12.5% OR 15%

Vendors registered for GST who signed a contract for the sale before 1 October 2010 and for whom settlement has not yet occurred may find some comfort in section 78 of the Goods and Services Tax Act 1985.  That section makes it clear that where the GST rate is changed at law every agreement is…

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Vendor’s Warranties

The warranty was that “all obligations under the Building Act 1991 were fully complied with” as at the date possession was granted.  Although the warranty only applied if the vendor had done works, a recent case has shown that the reach of the warranty may be further than people had expected.  The Court of Appeal…

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