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Do you know what you are signing? |
In the past it was a given that most agreements for the sale and
purchase of property would be on a ‘standard form’. That form was the
one approved by the New Zealand Law Society and Real Estate Institute.
However there is now no certainty that this is the form presented to vendors and purchasers for signing by real estate agents.
In the past it was a given that most agreements for the sale and purchase of property would be on a ‘standard form’. That form was the one approved by the New Zealand Law Society and Real Estate Institute.
However there is now no certainty that this is the form presented to vendors and purchasers for signing by real estate agents.
With the recent introduction of the ‘plain English’ form by the Real Estate Institute of New Zealand (‘REINZ’), the plain reading is far from straightforward. In fact, it achieves the opposite – it is ambiguous.
Without detailing all of our many concerns, some of these include:
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There are more vendor warranties (‘promises’), which are much wider than what is on the standard form.
- The vendor could be sued by the purchaser up to 6 months after settlement should the vendor not have made the purchaser aware of certain matters which may have affected the purchaser’s decision to purchase the property
- The difficulties arise for matters which may not have been known by the vendors or which the vendor had no control over.
- The vendor of a unit or apartment must provide full disclosure of anything that may be adverse to the property being sold. This may extend to even including an increase in premium or a change in body corporate rules.
- Any differences or disputes concerning or arising from the agreement require the parties to mediate, which is not necessarily binding. This is likely to increase legal costs and differs from the position in the current standard form, which allows the parties to seek a binding determination as to their legal rights.
We believe that signing the new REINZ agreement in its current form is akin to a walk in a jungle of tigers.
Unless you are absolutely sure what you are signing, our only advice is for you to see us prior to signing any agreements. Contact Sonya, Karen Harris or Nicola.
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