A young couple were buying a property.  The real estate agent asked them what deposit they wanted to pay on the property, and what conditions they wanted to include in the Agreement.

They didn’t know much about what was ‘usual’ to include, or where to begin.  They contacted their lawyer for advice.

When completing an Agreement for Sale and Purchase to buy a property, there are a number of things you should consider, including:

1. Are you using your KiwiSaver funds? If so, is it for the payment of your deposit or for settlement?

If you are obtaining KiwiSaver funds for the deposit, then the wording of the deposit clause in the Agreement will need to state that funds will be held in the vendor’s solicitor’s trust account until settlement. This ensures that your lawyer complies with their undertakings required by your KiwiSaver provider.

2. When is the proposed settlement date?

The proposed settlement date must allow sufficient time after confirmation of conditions for mortgage and transfer documents to be prepared and signed. Also, if you are obtaining a KiwiSaver or any Kāinga Ora grants or loans then the settlement date must accommodate the 15 working day requirement of providers.

3. Have you confirmed your finance arrangements?

If you are pre-approved for a mortgage from a bank or lender, then you need to be sure that it is unconditional approval. If the pre-approval is conditional, then a robust “subject to finance” condition should be inserted into the Agreement in case you cannot obtain approval for the particular property you are buying.

Additionally, you will need to ensure you have 10% of the purchase price readily available for the deposit, or amend this condition to include the percentage you do have readily available if you do not have 10%.

4. What conditions do you want in the Agreement for Sale and Purchase?

You may want to have Land Information Memorandum (LIM) and builder’s report conditions in your Agreement. Additionally, you may want to include clauses such as solicitor’s approval or title approval. These conditions will mean you need to allow sufficient time for these conditions to be satisfied before settlement.

It is very important that you undertake a full investigation of the property you are looking to purchase.  You need to be assured that the building and retaining walls are structurally sound and weather-tight and that building permits and/or consents are in place and the work has been signed-off by the Council, where applicable, by way of a Code Compliance Certificate (“CCC”).  If it transpires that there are issues at the property such as a missing CCC this needs to be disclosed to your insurer and your bank. 

There are a number of potentially stressful and expensive issues that can arise if Agreements are not properly drafted. We recommend obtaining experienced legal advice prior to signing an Agreement to avoid such issues arising. 


Thérèse Greenlees

Registered Legal Executive