Mortgagee Sales – Some of the risks
Potential risk to purchasers can include intentional damage to the property or land by the mortgagor, the possible need for, and additional cost of, legal intervention to remove a mortgagor who refuses to leave, and the lack of other securities due to the absence of vendor warranties.
The standard vendor warranties in the Sale & Purchase Agreement would be crossed out.
This includes the provision of buying “As – where is”. Under this kind of provision, any costs relating to fixing any problems are the responsibility of the purchaser (unless arranged differently).
Purchasers might arrange for insurance to protect themselves against the risk of the property or land being damaged prior to settlement.
If the purchase is at an auction, this would be done prior to bidding.
|Four Free Tickets Enjoyed!
Congratulations to the people who received the free tickets for this show! Some were even brave enough to join in as a participant, but didn’t quite reach the stage in the photo!
Unit Title Properties – Disclosures
There are three main disclosures that have to be made by a vendor to a purchaser for unit title properties.
- The pre-contact disclosure statement – made available before the purchaser enters into a sale and purchase agreement.
- The additional disclosure statement – made available within 5 working days of being requested by the purchaser to provide more information.
- The pre-settlement statement disclosure – made available at least 5 working days before settlement.
- There is a fourth disclosure that does not relate to the buying and selling of the unit.
It is the turn-over disclosure statement – provided by the original owner or developer to the body corporate notifying them of the new owner and their details.
A recent decision by the REAA highlights that it is important to ensure a pre-contract disclosure statement is properly completed before showing a property to prospective purchasers. This is a requirement under the Unit Titles Act 2010. It is also important to ensure that matters such as the vendor’s preference for settlement timing is conveyed so purchasers are aware of the position and can tailor their offer accordingly.
Interim Guidelines on Meth Contamination Levels – Real Estate Institute NZ
Pending completion and release of the National Standard for the testing and remediation of methamphetamine (MA) affected properties, the committee developing the Standard has confirmed that it supports the Ministry of Health’s (MOH’s) advice that local authorities should continue to apply the current guideline level of 0.5 µg/100cm2 where there is evidence that the property has been used as a clandestine lab (for example, uncovered by Police or evidence of manufacturing exists, such as the presence of manufacturing equipment and chemicals). Where there is no evidence that a property is likely to have been contaminated by manufacture, the Standards Committee supports the MOH’s advice to use the levels of 2.0 µg/100cm2 (if carpeting and other soft furnishings are removed) or 1.5 µg/100cm2 (if carpeting and other soft furnishings are not removed) as an interim guide until the New Zealand Standard is published.
REINZ has requested an update from the Auckland Council in particular regarding whether it intends to adopt the recommendations of the MOH and Standards Committee. REINZ has also written to the Tenancy Tribunal seeking confirmation of how it intends to apply the new guideline levels.
National Policy Statement on Urban Development
The NPS took effect on 1 December 2016 and the biggest councils experiencing high growth will be most affected, including Auckland, Christchurch, Tauranga and Hamilton. Smaller, fast-growing cities such as Nelson and Queenstown will also be affected.
‘The NPS requires councils to allow for a greater supply of houses, so prices rise more slowly and houses are more affordable,’ Environment Minister, Dr Smith says.
Some things people might not know…about selling homes.
- When a real estate person, or anyone related to them, wants to buy a house they are associated with in their work, they must obtain the consent of the client, home owner, on the prescribed form and have the client sign it. They must also provide the home owner with a registered valuation of the property. This must be done within 14 days of the signing of the consent form.
- A licensee must not do anything that will place a client or customer under undue or unfair pressure, especially during the negotiation stage.
- A home or property cannot be offered for sale by an agency without an agency agreement (listing form) from the homeowner. That also means that a licensee cannot show prospective buyers a property without an agency agreement in place.
- A property offered for sale by tender or auction can be sold prior to the tender or auction date, but must be advertised as “For sale by Tender/Auction (Unless sold prior)”. All marketing material and documents must make it clear that this is the case. Potential purchasers can register their interest and ask to be informed if someone else makes an offer.