Posts Tagged ‘Property Lawyer’

Your Property Lawyer – 2010 Blog Highlights

Your property lawyer has an important part to play in the house buying process and lawyers rated a mention in many a Blog article in 2010. Here are the articles that highlight how helpful (and essential) a lawyer is when buying a house – read on and you will realise why it is a good idea to get a quality property lawyer early on in the house buying process and then make good use of them!

1. Your Property Lawyers Tips on House Buying Traps

Your property lawyer has experience in multiple house buying and selling transactions. They know all about what can go wrong, what things most commonly do go wrong, and what mistakes people make. This article has info on what a property lawyer thinks are the most common traps of house buying.

2. The Title Search

Here at Propertytoolbox we think it is really important to get a title check done really early on when you are thinking about buying a house - it is a cheap (and quite often free - if you have a nice lawyer) way of find out a lot about a property - it can really save you time and money as sometimes the title holds a few surprises! We tell all in this article 'A property title search - what is it?'

3. Lawyers & Settlement

Just what is your lawyer up to on settlement day? This is your lawyers big day in the house buying process - though they have helped you out with advice and a few checks up to this point - settlement day is the day where all the action happens! So just what happens? Find out here in our article on 'What happens on settlement day - the lawyer'.

These blog articles give some insight into what your lawyer is up to - the legal stuff re buying a house. If you want to find out more - check out the settlement section of the Propertytoolbox house buying guide.

What Happens on Settlement Day – The Lawyer

Settlement day is the day that (all going to plan) money changes hands, the name on the title changes and you get the keys to your new home.

Wondering what your lawyer is up to on settlement day? This is what they should be sorting out for you:

  • Your lawyer pays the vendor your money as per the settlement statement via the vendor’s lawyer. The vendor’s lawyer confirms receipt of the money.
  • Your lawyer notifies you that settlement has occurred and you can now take possession of the property – usually by phone.
  • The vendor’s lawyer now starts the process by which ownership of the property passes to you. They will release of the Landonline documents to your lawyer who immediately updates the documents with the discharge of the existing mortgage, the transfer of title to you, and (if you are borrowing money) registers the new mortgage against the title.
  • The vendor's lawyer notifies the relevant Councils and Quotable Value of the sale and gives them of your details as the new owner of the property.
  • Your lawyer then puts together a record of all the information gathered during the course of the transaction and sends this to you along with the bill.

So on settlement day there is quite a lot going on – no wonder, on the odd occasion, settlement doesn’t occur on the expected day.

Want to find out more about settlement day? We have a whole section dedicated to settlement day in our Propertytoolbox house buying guide.

Settlement Day – What If I Settle Late?

Unfortunately settlement day sometimes has a few hitches and in a worst case scenario you could find that settlement does not occur as expected. There are many reasons that this can happen and it is usually that time just ran out for all the necessary things to be done to complete the settlement day transactions. This is particularly the case when a settlement involves a chain of house sale and purchases.

You need to prepare for this contingency. Have a backup plan, a place to stay, a few days overlap on your current accommodation. Remembering also that settlement is usually on a Friday, and if it does not occur, Monday is the next day available day for this to happen. This can be a real hassle! It is always best to give yourself a few days to move then you can be reassured that if settlement is delayed you are unlikely to be left out in the cold.

You may be liable for some costs if you do not settle on time. As a minimum there is penalty interest payable at a rate set out in your sale and purchase agreement – this rate is usually a premium interest rate far in excess of your mortgage interest rate. Additionally you could be liable for any expenses incurred by the vendor directly related to your late settlement for example storage and accommodation costs.

Sometimes, settlement may happen, but the vendor may have not moved out! There have been many people who have found themselves waiting in a moving truck outside their new home while the old owners were still moving out. This usually just means a long night of unpacking in the dark – but with a very disorganised vendor you may have to find alternative accommodation through no fault of your own.

Failing to settle, or not being able to move in when you planned, rarely happens, but if it does happen, make sure you are not left homeless!

For more tips, hints and handy advice for the house buying process – check out our house buying guide.

Sunset Clauses – What Are They?

A sunset clause is a clause that you include with any other conditions (like a property valuation, building inspection, or a LIM) in your sale and purchase agreement when buying a house. It is a clause that puts an ‘Expiry Date’ on the offer.

Why Use a Sunset Clause

There are a number of reason sunset clauses are put into sale and purchase agreements - the most common being to put pressure on the vendor to make a decision about your offer, or to ensure you can continue to house hunt, and put offers on houses, if an offer you have submitted is not accepted or rejected within a reasonable timeframe i.e. about 2 days.




If you don’t have a sunset clause your offer remains current until accepted or rejected by the vendor. This can be painful as you may miss out on other opportunities – or you could find yourself having multiple offers accepted if you continue to make offers on other houses assuming old offers were rejected.

When to Use a Sunset Clause

Putting a sunset clause on a sale and purchase agreement is not often done but is a good idea when you want an answer to your offer quickly for whatever reason and especially in tender situations – where your offer may be kept ‘on hold’ until negotiations with someone else are finalised.

How Long Should a Sunset Clause Be?

A good amount of time to make a sunset clause for is approximately 2 working days – with the clause expiring at 4pm on the second day – allowing for paperwork to be processed before close of business if the offer is accepted at the last minute.

If you are making an offer late in the week, try to make sure the sunset clause expires before the open home crowd descends on your potential home on the Sunday – you may not want the competition!

Leveraging the Sunset Clause

The sunset clause gives you some degree of control over the timing of the offer acceptance or negotiations. If the sale and purchase agreement expires – it is not the end - you can always offer again, or extend the sunset clause on the same (or amended) agreement if you want.

If the agreement is accepted after the sunset clause expires, the offer has expired, and no legally binding agreement has been entered into. In this case it is up to you whether or not you want to proceed. You can choose to accept the original agreement or you can resubmit the offer with some changes suitable to you.

Vendors and Sunset Clauses

Sometimes the vendor may put a sunset clause in the sale and purchase agreement – if this is the case – it really pays to get your lawyer to look over it and to explain the implications of the clause.

Sunset Clauses - Get Your Property Lawyers Advice

Don’t forget - like any clause you put in your sale and purchase agreements – whether it is being put in by you or the vendor – get it checked over by your property lawyer!

Sunset Clause All The Details
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The Propertytoolbox Home Buyers Guide

After some more great home buying advice – don’t forget to check out our home buying guide!



House Buying Traps – A Property Lawyers View

There are many things to be aware of when buying a home, it really can be a minefield! One person to carefully listen to the advice of is your property lawyer. They have been through the house buying and selling process with many clients and have lots of great advice - and coming from the legal corner - it is always good advice to pay attention to!

Thanks to the team at Homelegal we have a property lawyers view of 'traps for home buyers'. Read and beware!

Traps

1. Misunderstanding the type of property

There are various types of property including fee simple, crosslease, unit title, company share and leaseholds. Each has advantages and disadvantages that you should be aware of prior to purchasing. Misunderstanding the type of property you are purchasing or the interests in the land may result in an unexpected impact on your enjoyment and use of the property.

2. Misunderstanding the agent's role

Always remember the real estate agent is trying to sell the property at the best possible price for the vendor (the person selling the property). Don't show all your cards to the agent at the outset and don't disclose your financial limit to them.

3. Signing agreement under pressure

Putting in an offer can be exciting. Don't feel compelled to sign an Agreement straightaway. Once an Agreement is signed it is a legally binding contract. Make sure you understand what it is you are signing. Get your lawyer to look over it.  If you are unable to make contact with your lawyer get the agent to include a solicitor's approval clause.

4. Insufficient conditions

You have an obligation of good faith to the vendor. You can't use a finance clause, for example, to get out of an agreement if you have simply changed your mind. Carefully consider the reports you wish to obtain on the property before you sign e.g. builder's report, valuation report or LIM report. If any of these reports do not meet the standard you require you are able to cancel the Agreement. However as soon as the conditions relating to the reports are formally confirmed the Agreement is binding on you.

5. Deemed consent conditions

Avoid conditions that are deemed to be satisfied unless you notify the vendor. These are dangerous. If you don't confirm or notify the vendor that the condition is not satisfied they are deemed to be satisfied.

These house buying traps were provided by the team at Homelegal. Looking for more home buying advice? Check out our home buying guide, or to find out just what a lawyer is doing for you during the house buying process our Settlement section has a lot of interesting info.

The Building Report Says There is a Problem…

It is always a good idea to get a building inspection before you commit to buying a house – either before making an offer or as a condition in your sale and purchase agreement.

When you get a building inspection done you are hoping that everything comes out OK, with maybe the odd minor maintenance issue identified here or there in the building report – but what if there is something unexpected, something big, something that leaves you dazed and confused? Here is a summary of our advice on what to do…

First things first – are you still thinking of buying the house? If not – this is the easy bit – walk away! Tell your lawyer you are not going unconditional, or just don’t make that offer – easy! Or maybe not so easy as you have already invested time, money and emotion into the house...

So you are still interested in buying the house.  Now you need to work out how serious the problem is – a good person to question initially is your building inspector – you need to make sure that you fully understand the problem that they have identified in the building report. Remember, your building inspector is not an expert in all aspects of building so if a particular problem has been identified it is best to speak to, or get quotes from, an expert in the area.

Now that you have the full picture of the extent and cost of the problem you can make a decision with all the facts to hand. Now you can walk away, or continue as if nothing has changed, or begin re-negotiations with the vendor - either negotiating down the price or asking the vendor to fix what is wrong with the house.

If you have obtained this building inspection before even beginning negotiations you are now in a much stronger negotiating position. You can start price negotiations fully armed with exactly what is going on with the house and adjust your price accordingly.

If you and the vendor come to an agreement that involves the vendor having to complete work, or anything changes on a previously agreed sale and purchase agreement, or anything else at all, this needs to be formalised in the sale and purchase agreement by your lawyer.

Finding something wrong during a building inspection is the main reason why you need to give yourself plenty of time to get a building inspection done – at least 5 working days is a minimum! You never know what you are going to find, and what processes you are going to have to go through after getting the building inspection and reading the building report.  So give yourself plenty of time and don't rush any decisions.

For a more comprehensive rundown of your options when there is something wrong with the building inspection – head here.

We have more great advice, tips and information about house buying in our house buying guide - make sure to check out the section 'I've found a house!'
 
 




 
 

A Property Title Search – What Is It?

A property title search or title check is a search and check done by your property lawyer or conveyancer of the records held by Land Information NZ (LINZ) regarding a house or property.

What Can I Find Out From a Property Title Search?

A title check establishes:
  • Who the owner of the property is.
  • Type of title i.e. freehold (fee simple), cross lease, leasehold, company share or unit title.
  • Any covenants or right of ways.
  • Any easements.
  • Boundaries.
  • Any other interests in the property (e.g. mortgages)

What Do the Results of the Property Title Search All Mean?

Freehold? Cross lease? Easement? Confusing! For explanations of all of these terms – head to our definitions section.

A lot of information can be found in a title check – your lawyer or conveyancer is an expert at working out exactly what is going on and can highlight any potential issues.

A title check can bring some information to light that can really affect the price you are prepared to pay – perhaps the title type is not what you expected, or the boundaries do not correspond with the fences, or easements are a problem.

Implications of covenants or right of ways may affect your enjoyment of the house, or put a stop to plans you have for the house (extensions or additions). Therefore it is a really good idea to get a title check done before you make an offer.

Making an Unconditional Offer?

If you are buying through auction or tender getting a title check done before making you offer is especially important. Commonly, the normal vendor warranties (promises) about features of the property and the purchaser’s right to requisition (raise objections to) the title are deleted from the sale and purchase agreement in the case of auction or tender.

This means you need to get your lawyer to check the title and any other reports on the property before the auction or the lodgement of a tender as you have forgone your legal right to raise objections by signing an agreement with the vendor warrantee clause crossed out.

Property Title Search

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The Propertytoolbox Home Buyers Guide

The title is one of a few things your lawyer should check for you before you make an offer. This information is all part of the Propertytoolbox home buying guide.

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I’ve Got My LIM Report – Now What?

Your LIM Report has arrived from your local council for the house you are looking to buy – now what! There is a lot of information in a LIM Report and knowing what to look for, knowing what it serious and what is minor, and wondering what is missing can make assessing the LIM Report a daunting task – you went to the time and effort of getting it – make the most of it.

Getting a LIM Report

You may have ordered your LIM as part of working through your conditions on an agreed sale and purchase agreement, or you may not have agreed the sale yet - the house may be for sale by auction or tender and you feel that a LIM is important to have before deciding on a price for the house – whatever the reason - the LIM Report needs to be gone over carefully.

Looking Over Your LIM Report

Read through the summary pages – potential issues are likely to be obvious here. Then dive into the main contents of the LIM. Look for outstanding financial obligations, resource consents, building permits, and related plans. Check that all issued consents have been signed off. For building work from 1992 onwards, check that a code of compliance certificate has been issued for works completed.




Take your personal knowledge of the property, its buildings, retaining walls, land use and the surrounding properties and the area and consider that against the information contained in the LIM. You should ask questions of the seller and the council if you find differences.

Getting Expert Help With the LIM Report Analysis

It is always a good idea to look over the LIM report with your lawyer when you receive it. Your lawyer’s experience and expertise regarding LIMs, combined with your knowledge of the property and your thoughts on what you intend to do with the property, will ensure that the LIM is understood and the full implications of any aspects of the LIM are realised.

Get additional expert help from a valuer or builder (the councils ‘on duty’ building officer is a great free resource), or any other relevant professional if you feel you need it to get the full picture.

What To Do With the LIM Report Results

Consider what impact the findings of the LIM report will have on your enjoyment of the property and the value of the property before you make your decision on whether this is the house for you.

Your LIM Report - What You Need to Know
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The Propertytoolbox House Buyers Guide

For all you need to know about LIM’s check out the Propertytoolbox information on LIMs. For everything else there is the Propertytoolbox Home Buyers Guide.




Making a Tender on a House – Putting in Your Tender

Last blog post we talked about just what a tender is.This post is all about putting in a tender. Next post we give you an insight to after the tender.

Thinking of Making a Tender on a House?

If you are interested in making a tender on a property, request a copy of the tender documents from the real estate agent. The tender documents can include any or all of: Never assume that the tender documents include all the relevant documentation with regard to a property. You still need to do your own house buying checks.

Ready to Put in a Tender?

If you have done all your checks, your happy, and you have decided you are going ahead with the tender, read all the tender documents carefully, and fill them in.

The sale and purchase agreement will need to be completed including adding your details, the purchase price, the deposit amount, the settlement date and any conditions. There may also be other documents to sign i.e. acknowledgement that the sale is by tender.

Get in Touch with Your Bank or Mortgage Broker

This is also a good time to run the details of the property you are interested in past your bank or mortgage broker. There may be some issues with the property that could affect the amount a bank is prepared to lend i.e. its condition, title type, location etc.

This can be quickly checked. It is always good to have some mortgage advice at this point and a good mortgage broker, or personal banker can help – take advantage of free advice from a mortgage broker!

Conditions in Your Tender

Deciding on conditions to have in your tender can be difficult. A condition free tender (a cash tender) is always going to be more attractive then a conditional tender if the money is approximately the same.

A tender process often gives you time to work through all your potential conditions prior to the tender date i.e. you can get a building inspection, valuation, LIM, and confirm you finance etc, but whether or not you choose to do this is up to you. Propertytoolbox has a few thoughts on the subject of conditional vs cash offers here.

Help with Your Tender From Your Property Lawyer

It is very important to get your property lawyer or conveyancer to look over the tender documents. In most cases, the vendor will have added conditions and deleted standard clauses in the sale and purchase agreement.

Your property lawyer can tell you the implications of these changes, change the wording of the tender conditions if necessary, add any of your own conditions and check the title.

Done all Your Checks? Time to Submit Your Tender

After all these checks have been done, and you are happy to proceed, the tender can be submitted (usually to the real estate agents’ offices), with a cheque for the deposit, before the tender closes. You will get a receipt to confirm that your tender documents & deposit were submitted.

Working Out Your Chances of Winning the Tender

With a tender situation you may be the only tender, or one of many. You may be able to gauge this by asking the real estate agents office how many copies of the tender documents were sent out, or you can ask the agent – neither is a reliable method.

The reality of a tender is that unless you have reliable information to the contrary, you have to assume you are in a competitive bidding situation and have to put in your best offer.

Houses Sold Prior to Tender

Be aware of the fine print as some houses are advertised for sale by tender (unless sold prior), which means the vendor is open to offers before the tender date. In this situation, you can choose to approach the vendor early or wait to the tender date.

Registering your interest in the property with the agent ensures that if an offer is being submitted prior to the tender date, you get a chance to put an offer in also.

Next Post – Part 3 – Making a Tender on a House – After the Tender Has Been Made Making a Tender on a House |

The Propertytoolbox Home Buyers Guide

The Propertytoolbox house buying guide has lots more helpful stuff for all you house hunters – head there now!

What is Countersigning?

When you make an offer, or place a tender, on a house it will either be accepted, rejected, or you will start negotiations with the vendor. If you start negotiations you will presented with your original sale and purchase agreement countersigned. This countersigned agreement is usually the original contract you submitted with some changes made by the vendor, signed by the vendor. They may have changed anything on the agreement including the price, the settlement date or the conditions.

It is usual for these negotiations to be handled by the real estate agent and you should have any amendments to the sale and purchase agreement approved by your lawyer before signing - especially if the amendments are changes to the conditions of the contract, or parts of the standard contract have been crossed out. You may choose not to accept the changes made by the vendor, and can either countersign the agreement again (making your own changes) or end the negotiations.

Every time the sale and purchase agreement is amended and submitted to the other party it is, in law, the rejection of the previous offer and the making of a counter-offer. This amendment of the sale and purchase agreement is often referred to as countersigning. All changes to the agreement need to be initialled (this can mean a lot of signing!). Only when the countersigned document is accepted without any amendment and signed is a legally binding contract formed.

Just because you have countersigned and countersigned and finally agreed - this does not mean that the house is sold - you may still have conditions to work through before the contract goes unconditional - find out more about going unconditional.