Information for Purchaser

(Clause numbers refer to the ADLS Agreement for Sale & Purchase 9th Edition 2016)
First Property Legal is a division of Gawith Burridge, Solicitors, Masterton

 

Land Information Memorandum (LIM)

  • We recommend you obtain a LIM report (see clause 10.2 of the Agreement)
  • A LIM report is available from the District Council and shows whether any requisitions are issued against the property and any other information the Council has about the property, e.g. CCC, earthquake etc.
  • The owner warrants under Clause 7 of the contract that no requisitions have been received from the District Council but the LIM report is the only way of confirming this. Owner warrants work done by them has permits and CCC
  • The fees are different for each Council and dependent on urgency

Penalty Interest for Late Settlement

  • Settlement and possession are generally on the same day
  • The contract provides that if your purchase is not settled by 4.00 pm on the day of settlement the vendor can ask for penalty interest at the rate set out in the contract; if settlement is due to take place on a Friday this can mean a penalty will be payable for Friday, Saturday and Sunday
  • Late settlement can occur when the Bank providing the mortgage finance does not credit the Gawith Burridge Trust Account with the funds early enough for us to complete settlement before 4 pm
  • Late settlement can also occur where the purchase is part of a chain of transactions and we do not receive funds to complete a purchase in time to complete settlement by 4 pm
  • To avoid at least one of these problems we recommend that we uplift your mortgage funds on the day prior to settlement
  • Although uplifting mortgage funds on the day prior to settlement will involve you paying one day’s extra interest it is preferable to the possibility of incurring 3 days penalty interest
  • Where a late settlement occurs due to circumstances beyond our control you will be liable for any penalties that may result from the late settlement

Inspection of Property Prior to Settlement

  • Clause 3.2 of the contract provides that you have the right to inspect the property once prior to settlement date
  • Notice of your wish to inspect the property must be given in writing to the vendor a reasonable time prior to settlement date
  • Inspection is normally carried out late on the afternoon of the day prior to settlement day accompanied by the real estate agent
  • Please confirm if you wish to inspect the property prior to settlement

Joint Tenants/Tenants in Common

  • Where two or more people are purchasing we recommend couples acquire title to the new property as tenants in common; a detailed information sheet is available from the office
  • Co-owning purchasers can acquire title either as joint tenants or as tenants in common
  • Joint tenants means that when one joint owner dies, the property passes automatically to the survivor
  • Tenants in common means that if one of two tenants in common dies, that owner’s share passes in accordance with the provisions of the owner’s will
  • Please let us know whether you wish to own the property as joint tenants or as tenants in common

Property Agreement

  • In certain circumstances we recommend that you have a Property Agreement
  • This is a form of agreement which sets out your respective rights and obligations if your relationship should cease
  • The Property Agreement clearly sets out what is to happen to the property following a separation

Vendor’s Undertakings – see clause 7 of the Agreement

Insurance

  • It is your responsibility to arrange insurance for the building before the possession date/Settlement date – we recommend replacement cover. It is recommended you organise insurance at the same time as getting mortgage approval as the loan advance is dependent on the insurance being in place on Settlement date
  • Until settlement, normally the risk remains with the vendor

Rates

  • The vendor’s lawyer notifies the Council of the change of ownership
  • Usually the vendor has paid rates in advance of the Settlement date. You reimburse the vendor for your proportion of rates paid in advance as a part of the amount required on Settlement date

Settlement

  • Any funds we collect from you to pay the purchase price must be by way of either bank cheque payable to Gawith Burridge Trust Account or by electronic payment of same-day cleared funds to the Gawith Burridge Trust Account from your bank
  • We collect the purchase funds from you and/or your bank and settle the transaction by paying the vendor’s lawyer and, in some cases, collecting the key. We then register the change of ownership in the Land Titles Office and, where applicable, the mortgage to your bank

If you need to discuss any of these matters with us before making a decision please do so.