Recently, we’ve seen significant growth in the Wellington residential property market and many of you were no doubt thinking that it was about time! With a growing number of buyers and a pool of housing that was struggling to meet that demand, the conveyancing landscape quickly changes. From agreements 4 years ago that were full of ‘further terms of sale’, in recent years we have found that the majority of agreements that come across our desks are unconditional – all buyer due diligence is done upfront.
Until recently. We’re now seeing conditional agreements coming our way again.
Agreements subject to insurance is a direct result of the 2016 Kaikoura earthquake. Other common conditions creeping back in are finance and builder’s report and global due diligence clauses.
As you’ll know, a purchaser can insert conditions in two areas of the agreement:
1. Circling the relevant condition in the Conditions Box on the front page of the agreement; or
2. Inserting a clause in the further terms of sale.
We’re seeing the odd agreement that has a mixture of both – this can lead to confusion as to when a condition is due for confirmation. If you’re including standard conditions in the further terms for the buyer to choose whether to include, we recommend that you strike through the Conditions Box on the front page and write ‘See further terms of sale’.
It’s also important to be aware that the standard agreement (but not the auction or tender version) has an ‘inbuilt’ title approval condition. Under cl 6.2 the purchaser has 10 working days in which to make a requisition (or objections) to the title. Ideally, if a purchaser is wanting to make an ‘unconditional offer’ clause 6.2 should be deleted.
However, if you’re not wanting to make any changes to the agreement, you can reduce the change of a requisition by attaching a copy of the title to the agreement as a purchase can only requisition something on a title that they weren’t aware of at the time they signed the agreement. Attaching the title to the agreement is great evidence that they knew the item was on the title!
If you have any questions about the contents of this article, or if you are unsure of how your changes might affect an agreement then please give us a call (04 390 2123, or drop us an email to email@example.com or firstname.lastname@example.org). We are more than happy to help – obligation free!