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If you are in the middle of
buying or selling a property, it is likely your transaction has been affected
by the Covid-19 lockdown. The Real
Estate Authority (REA) recommends that, where possible, parties look at
delaying settlements until level 4 alert is reduced to level 2. This is because during level 4 sellers will
not be able to move out of their properties and similarly buyers will not be
able to move into their new properties.
If you are a BUYER and have entered into a conditional offer (either prior to or during level 4 lockdown), we recommend you talk to your lawyer and arrange a suitable extension of the conditions until the alert level is lowered. You may be able to confirm your Finance and Kiwisaver conditions as both these organisations are working during the lockdown. However, during the lockdown you will not be able to access some services to fulfil the conditions i.e.; have your builder inspect the property or possibly have the LIM Report of the property prior to the due date. The SELLER may also not be able to attend to conditions stipulated under the Agreement e.g.; fixing the spouting or the roof. The buyer and the seller should work together and take a compassionate approach during this time.
If you have entered into an unconditional offer (prior to or during lockdown), we recommend that both parties agree to delay settlement until the level 4 alert is lowered. You should discuss this with your lawyer as to the best approach for your particular transaction. The New Zealand Law Society has recommended that settlements should be deferred to at least 10 working days after the alert level 4 is reduced. Discuss this with your lawyer and defer settlement to a date which will work for both parties. However, if you are selling a bare land or a tenanted property where the tenant is staying, we suggest you talk to your lawyer as these settlements may be able to take place during the lockdown period.
If you have any questions, please discuss these with your lawyer or contact one of our team at Ward Adams Bryan-Lamb.