Further to our recent review of the updated standard Agreement for Sale and Purchase, we now provide a review of the updated standard Particulars and Conditions of Sale of Real Estate by Tender (the Fourth Edition 2012 (4)) and Particulars and Conditions of Sale of Real Estate by Auction (the Fourth Edition 2012 (4)).

Marked up samples of the new versions showing the highlighted changes can be found on the links below:

Sale of Real Estate by Auction

Sale of Real Estate by Tender

It is important that you are aware of the changes to these Agreements and their implications. 

The key changes are very similar to the changes to the standard Agreement for Sale and Purchase and include: (please see below for more information on each)

  • Tax information requirements are included (Clauses 5.6 and 5.7).
  • Vendor warranties and undertakings protect more than just chattels (Clause 8.2(1)).
  • Pre-contract disclosure statement changes (Clause 10.2(1)).
  • Purchasers will have to claim compensation on or before the last working day prior to settlement (Clauses 9.1 and 9.2).

Other important changes include:

  • ‘Working days’ has a new definition (Clause 3.1(29)).
  • Keys that lock exterior doors and open doors electronically must be provided to the Purchaser on the settlement date (Clause 5.4).
  • Inclusion of authority to provide statistical data to REINZ (Clause 13.2 in the Auction Agreement and 14.2 in the Tender Agreement).
  • The ability for Purchasers to state whether part of the property is being used as the principal place of residence for GST purposes.  

1. Tax information

Tax changes came into force in October 2015.  It is intended that these changes will improve compliance with tax laws by requiring the collection of information, particularly about those people who buy and sell properties for profit.

The Agreements have been changed to reflect this new legislation.  The terms “tax information” and “tax statement” have been defined.  Furthermore clauses 5.6 and 5.7 in each Agreement provide that tax information will be collected by way of a tax statement and such information will be lodged at the time registration is completed.

2. Vendor warranties and undertakings

A Vendor now warrants and undertakes that at settlement, the chattels and all plant, equipment, systems or devices which provide any services or amenities to the property, including security, heating, cooling, or air-conditioning will be delivered to the Purchaser in reasonable working order but in all other respects in their state of repair as at the date of the Agreement. This allows for fair wear and tear.

Previously, the Vendor warranty and undertaking only covered chattels. The obligations on Vendors have been extended, and any failure to comply will create a right for the Purchaser to seek compensation from the Vendor.

3. Pre-contract disclosure statement changes

An acknowledgement has been reinstated into the Agreements, above where the parties sign, that in the situation of a sale of a unit title property the Purchaser has received a pre-contract disclosure statement. 

This will serve to highlight to the parties the need for a pre-contract disclosure statement to be provided before a binding Agreement is entered into.

A new clause 10.2(1) has also been inserted in both Agreements, which is a warranty by the Vendor that the information in the pre-contract disclosure statement provided to the Purchaser was complete and correct.  This warranty has been inserted to provide a remedy to a Purchaser where the pre-contract disclosure statement provided is either incomplete or inaccurate.

4. GST schedule

The GST schedule (which is to be completed by the Purchaser if the Vendor is registered for GST) has now been updated to include a new question which asks a Purchaser to state whether part of the property is being used as a principal place of residence at the date of the Agreement e.g. the main farmhouse or the apartment above the shop.

If the Purchaser answers “Yes” to this question, then that part of the property will be treated separately for GST purposes.

5. Working days

The new Agreements provide for the “Mondayisation” of Waitangi Day and Anzac Day. This means that if the public holiday falls on a Saturday or Sunday, the following Monday will be not be deemed a working day.

6. Keys to exterior doors

Under the previous versions of the Agreements, a Vendor was required to make available to the Purchaser keys to all exterior doors, electronic door openers, and the keys and/or security codes to any alarms. This clause in each Agreement has now been amended to make it clear that ‘keys’ relates to all keys that lock exterior doors, and all electronic door openers that open all doors electronically. This revision removes any confusion about whether a Vendor is obliged to supply keys to an exterior door, even if it was not actually locked by key.

7. Claims for compensation

The new Agreements have clarified that if a Purchaser wants to make a claim for compensation, they must serve notice on the Vendor on or before the last working day prior to settlement. 
Purchasers will now be obligated to complete their pre-settlement inspection at least two working days prior to settlement.

8. Authority to provide statistical data to REINZ

New clauses 13.2 (in the Auction Agreement) and 14.2 (in the Tender Agreement) have been included in the Agreements authorising the agent to provide REINZ with statistical data relating to the sale.

We hope that this article is of assistance. If you have any questions please do not hesitate to contact us.

For more information on the above changes please contact Laurie Pallett at lpallett@raineycollins.co.nz or on (04) 473 6850.