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Knowledge - Energy - Dedication

 
Pre-settlement inspections – what you need to know


Stacey Hyland

Wanganui Chronicle "Home Truths"

August 2017


The standard ADLS agreement for sale and purchase of real estate allows the purchaser a

pre-settlement inspection of the property.


We recommend that a purchaser inspects the property as close to settlement as possible, but no later than one or two working days before the settlement date.


At a pre-settlement inspection, a purchaser is checking that chattels are in working order, and are in no worse condition than as at the date the agreement was signed (fair wear and tear excepted).  A purchaser should also check the property is generally in the same condition as when they initially viewed it.

 

Purchasers must be careful and diligent when they initially view a property.  Often, damage is not apparent (e.g. holes in walls or cracks in concrete) until personal possessions have been removed.  Once revealed, a purchaser is unlikely to be able to claim for such damage because the damage existed at the time the agreement was signed.


If a purchaser finds new damage at a pre-settlement inspection, or if a chattel is not in working order, then a claim for compensation may be possible.  Any pre-settlement claim must be made at least one day before settlement.  Only in very limited circumstances can a purchaser cancel due to damage to the property.  So, expect to settle and resolve the dispute later.


If the vendor agrees with the claim, the purchaser may deduct the claimed amount from the purchase price on settlement. If the vendor disputes the claim, a reasonable amount can be put aside (in a stakeholder account) pending the resolution of the claim.  Often, claims are minor and are resolved by agreement or through the Disputes Tribunal.


Purchasers are often surprised that the standard agreement does not require the vendor to mow the lawns or leave the property in a “clean and tidy condition”. However, if a vendor leaves rubbish on settlement, the purchaser may be able to pursue a post-settlement claim for its removal costs.


Purchasing a house can be a stressful time.  You can reduce your stress by inspecting the property thoroughly when you first view it (before signing) and again before settlement.   If any issues arise, talk to your lawyer.

 

Due diligence is a must

Megan Christie

August 2016


Buying a property is a major investment. A due diligence investigation can identify expensive problems. It is important to know what to focus on, and not get sidetracked by the small stuff.

Buyer due diligence
A builders report can identify repair and maintenance issues.

From the 1990s to mid-2000s, poor skills and materials coupled with inadequate attention to the building code lead to around 89,000 leaky buildings. The signs are not always obvious, which is why you should employ a building professional.

Older houses also need to be investigated for possible problems.
For example, insurance companies will refuse full cover where wiring is not up to standard. This can be an unwelcome discovery prior to settlement because banks require confirmation of insurance before settling.

A LIM report will provide information such as building consents issued, approved plans, contamination, flood risk, and the location of services. A LIM doesn't often identify adverse information on a property, but can save you money when it does.

A registered valuation is often required by banks, and provides an objective comparison with the asking price.

Finally, checking the title to the property is important. You need to know if a building crosses a boundary, or if there are any restrictions on land use. If you are buying to subdivide, you need to know what you can do as of right, and what conditions need to be ticked off. Your lawyer can help you with these questions.

Seller due diligence
Due diligence can bring up issues that sellers must deal with during the sale process.

Issues raised in builders reports can come as a surprise, and usually lead to a request for a reduction in price. Depending on the property and sale method (eg, auction or tender) some sellers choose to obtain their own pre-listing reports to include an information disclosure package.

Regardless of which side of the transaction you are on, being informed is the key to making the right decisions. Talking to your lawyer first can save you time and grief.


 
First home buying - things to consider

Stacey Hyland
October 2015

Buying your first home can be daunting.

 
KiwiSaver is a hot topic and knowing what you are entitled to is a good place to start.  
As a first home buyer you may be eligible to withdraw funds from KiwiSaver as well as receive a Housing NZ KiwiSaver Home Start grant.  

The Kiwisaver facts
All KiwiSaver providers have different eligibility criteria.  However, all providers require you to have been in KiwiSaver for at least 3 years, and that you will live in the home you are purchasing.  
If entitled, you may be able to withdraw all contributions except the $1,000 government kick start.
On top of KiwiSaver, you may be entitled to a Housing NZ Home Start grant of between $3,000 and $10,000.  You must meet certain criteria including:
  • earning $80,000 (or less) for a single purchaser, and $120,000 (or less) for 2 or more purchasers;
  • having been a regular contributor to a KiwiSaver scheme (minimum of 3 years);
  • holding a minimum 10% deposit; and
  • live in the property for  a minimum of  6 months from  settlement.  

Relationships
Relationship property issues are often overlooked by first home buyers.
Usually, partners bring unequal property to a relationship.  Some are happy to share 50/50, and some wish to protect their separate property.
After a period of time (usually 3 years) the home becomes relationship (50/50) property.  This applies whether you bought it together, or if one partner moves into a home owned by the other.
Partners must consider a “contracting out” agreement if they do not want the law to deem 50/50 sharing.

Succession – wills and trusts
As uncomfortable as it may be to talk about, death is inevitable.  
Having your Will in order ensures that your wishes are given effect to and your family is saved the hassle of tidying up your affairs in case of an untimely death.  You can also specify guardians for your children.
Depending on your circumstances, you may wish to consider a family trust to protect your assets for your family.

Enduring powers of attorney
Enduring powers of attorney (EPA’s) allow you to appoint someone to look after your affairs should you lose the ability to make decisions for yourself.
You can appoint someone as an attorney for your property, and also in relation to your personal care and welfare.  
An EPA will allow a trusted person to act in your best interests if you cannot make decisions for yourself.

How lawyers help you
Getting advice from a lawyer before you sign an agreement for sale and purchase can reduce your stress.  
Lawyers advise what is best for you in your circumstances.     
Usually, an initial consultation is no charge.  It is better to be informed about such an important step in your life.