Malcolm Cox (06) 835-4321 email@example.com
One of the vast disruptions associated with recent lockdowns is the ability of people purchasing and selling property to complete their obligations under Agreements for Sale and Purchase. Some conditions, like builder’s or valuer’s report were unable to be satisfied at Alert Level 4, due to limits on travel and access. Conditions such as solicitor’s approval, finance and insurance were less affected, as these are often completed by email or over the phone. However, banks and insurers appear to be taking longer, especially where staff are working from home. For similar reasons pre-settlement inspection cannot occur at Alert Level 4. However, these are permitted at Alert Level 3. During Level 4, moving to a new house was prohibited, while at Level 3 it was allowed but not recommended (especially if moving between regions). What this meant during the first lockdown last year was that dates for the satisfaction of conditions, and settlement dates were renegotiated and changed to accommodate the situations of both sellers and purchasers. Our experience generally was that the goodwill prevailed. As the unpredictability of Covid-19 continues, the Real Estate Institute has provided us with a roadmap to deal with this situation. As a result, we are now pre-empting the effects that rapid changes in Alert Levels bring, by including specific clauses in the paperwork to clarify how such disruptions will be handled. REINZ recommends the date for satisfaction of conditions is deferred to five working days after New Zealand (or the region) enters an alert level where personal movement needed to satisfy the condition is permitted, and 10 working days after for settlement. While these “covid clauses” aren’t mandatory they do help remove uncertainty. If you are selling one house and buying another, it is especially important to ensure that these “covid clauses” are included in both agreements and that they are compatible with each other. For this reason, it is always important to ensure that your lawyer has the opportunity to check the paperwork of all agreements. If you would like more information about matters related to the sale or purchase of property, please call us anytime.