Property Law

Once all the conditions have been confirmed the contract becomes unconditional. This means that you are legally bound to buy the property and the following steps need to be taken: (Next FAQs)

The agent (if any) will usually seek the immediate release of the deposit to the vendor. If you do want that to happen, you must inform us of that in writing. Otherwise we will not consent to this. 

We will receive mortgage instructions from your bankers/funders. Please contact your bankers to make sure these are under way. We will prepare the mortgage and arrange for you to come in and to sign it. 

You usually have the right to one inspection of the property before the settlement date. We recommend that you utilise this right. If this is to be done, that must be done in good time for us to be able to raise any issue with the vendors’ solicitors before settlement. In terms of the standard form ADLS contract, we need to give notice of objection or raise any issue prior to settlement date. Accordingly, you must organise any inspections of the property to be done prior to settlement. Even then, if there is any issue that arises, you must tell us immediately so that we are able to prepare and get the relevant notice off to the vendor’s solicitors in good time. 

Before settlement we will advise you of the cash contribution we require from you. We pay from our funds and undertake personally to the vendor’s solicitors that payment has been made and will not be reversed. We will provide you with the amount required (if any) as soon as we are able. If paying electronically, you may need to arrange for your bank to provide us with written confirmation such constitutes cleared funds. The bank will advance the monies into our trust account on the day of settlement.

We will draw down the mortgage advance from your bankers/funders (if any). We will arrange payment of the purchase price which will include an adjustment for rates and in return receive/have released to us the title documents. The time of the legal settlement is beyond our control. We rely on the Bank forwarding the mortgage money to us and the vendor’s lawyers being ready to settle when asked. It is therefore unwise to depend on being able to shift in early in the morning and when making carrier arrangements you should bear this in mind. If you can arrange to get a key from the vendors directly you may avoid this problem.

Once the contract becomes unconditional, the following must happen:

• We will write to all (if any) LINZ registered charge holders (i.e. mortgagees) and ensure release documents are available on settlement. We will also ask for a repayment figure as of settlement date. 
• We will send to the purchaser’s solicitors a settlement statement which will advise them how much they need to pay us on the settlement date.
• Your insurance policy over the property will need to be cancelled as of settlement day. 
• After settlement we will provide you with our final reporting letter including a statement setting out all financial transactions.

A LIM is a summary of all the current property information held by the different departments at a council at a time. It contains details of council consents for any work done, how much the rates are and information on any geographic hazards that might have an impact on the property, such as subsidence. Bear in mind that this information can be reasonably general - the LIM for most houses in Wellington will say that they're located in a high wind area, for example. If the LIM is dated a couple of weeks ago, it's safe to assume it's reasonably up to date. If it's dated a year ago, it's a good idea to make further enquiries. The price of the LIM varies from each Council. You can also ask to see the property file held by the council, which holds other information about a property, like a site map and original house plans.

Using a building report provided by the seller (or the real estate agent working for them) may seem like an easy option in the short term. However, if you buy the property and then find problems with it that cost a significant amount to fix, you're not protected by the building report because the inspector's contract is with the seller, not you.

Building companies or developers (the vendor) will offer a house and a package, this is where you enter into two contracts with the vendor;

1. A Sale and Purchase Agreement for the land, and;
2. A Building Contract 

Usually a condition of the sale and purchase agreement is that you enter into a building contract with the builder. The sale and purchase agreement will usually require you to transfer the land into your own name (have the land’s title in your own name), after the land has settled the build contract will usually start after the vendor has obtained a building consent.

Should I pay the deposit for a house and land package without seeing a Property Lawyer first?

A property lawyer will always advise against this if you have not sought legal advice. You may want to know whether this deposit is refundable and any other implications of the contract.

When should I find a Property Lawyer to help me with my house and land package?

The sooner the better or before you sign. Do not feel pressured that you have to sign the building contract and sale and purchase agreement without seeking legal advice first. The contract may not have the relevant clauses added to the agreement and once you sign the agreement may not have the ability to add any suitable clauses.

Can I use my KiwiSaver and Kainga Ora Home Start Grant for my house and land package?

You may use your KiwiSaver to go towards the deposit for the section of land or to go towards the settlement proceeds for the land. However, if you are going to use your KiwiSaver for the deposit a special clause is required to be added to the sale and purchase agreement.

You may be eligible to apply for the Kainga Ora Home Start Grant. Before you sign a Sale and Purchase agreement you can go onto Kainga Ora’s website and see whether you are eligible for the Grant and apply for pre-approval. 

You will also need to be aware that there are time frames that need to be factored in when applying for your KiwiSaver withdrawal and the Home Start Grant. 

What do Property Lawyers do when I buy a house and land package?

We review the title and LIM report in relation to the section and report this information to you. Most of the sections will have easements, land covenants, consent notices and other encumbrances on the title that you may need to comply with and be aware and any long term maintenance costs that you may incur. We will check with you that you are able to finance the property, but you will need to obtain approval from a bank or mortgage broker. We will also review the Building Contract for you. Once the contract has confirmed we will prepare all the documents necessary to prepare for settlement.

Either the seller or purchaser will draft an offer at present this to the other party (usually the purchaser). This is recorded on a sale and purchase agreement; this is a specialised form but a property lawyer can prepare the agreement. It is important to discuss with the other party who will be drafting the offer as you don’t want to have two offers prepared.

If the other party has had the offer drafted, it is important that you seek advice from a property lawyer before signing the offer. Do not feel pressured into signing the offer if you do not understand what you are signing.

Once the offer has been signed and dated by both the vendors and the purchaser this becomes a contract.

This contract will usually have conditions such as obtaining finance, insurance, purchasers approval of LIM, building report and their due diligence findings etc. 

Once the purchaser has satisfied the conditions the contract becomes unconditional. The deposit (if any) is usually required to be paid to the vendors’ lawyer.

From here your property lawyer will prepare all the documents required for settlement date (the date where the vendor transfers ownership to the purchaser).

EQC covers loss or damage caused by fire as a result of any of those disasters and some land damage as a result of storms and floods.