A new edition of the ‘standard’ Agreement for Sale and Purchase has been released, which includes substantial changes. Here are some of the changes that those selling property need to be aware of:

Vendor Warranties

Chattels are now separated into two categories (those that do not have an operational function, and those that do have an operational function).  It is important that the chattels are inserted in the appropriate Schedule in the Agreement.  If any chattels are incorrectly inserted in the wrong Schedule, the appropriate warranty is not being given to the Purchaser, which could result in a claim against you as Vendor. 

Tenancies on Settlement

If a property is tenanted, you are now required to provide to the Purchaser copies of any leases held by you and a letter to each tenant advising them of the sale.  Settlement is deemed not to have occurred until this is done.

Finance Condition

If the Purchaser cancels the Agreement under because they have not been able to obtain sufficient finance, you are entitled to request that they provide a “satisfactory explanation”, and supporting evidence for their cancellation, which needs to be provided immediately upon request.  

Toxicology Report Condition

This is a brand new condition, and allows a purchaser to make the Agreement conditional on receiving a toxicology report.  This inspection must be carried out by a suitably-qualified inspector using accepted principles and methods (and where the testing is in relation to methamphetamine, in accordance with the NZ Standards) and the report must be in writing. 

If you have any questions relating to the new Agreement for Sale and Purchase please contact you legal advisor for advice.

Laurie Pallett
Senior Registered Legal Executive