A couple went to view a property to purchase “off the plans” (e.g. buying a property which is not yet built and does not yet have a title). 

At the time they viewed the property they decided they would like to purchase and proceeded to enter into an Agreement for Sale and Purchase.  A solicitor’s approval clause had been included, which they understood would give them the ability to have their legal advisor review and approve the Agreement before it became unconditional.

What the couple did not realise is that there are a very narrow set of circumstances in which a solicitor can refuse to give approval under such clauses and enable them to cancel the Agreement.

The couple also did not realise that this clause was not a due diligence condition, and therefore would not provide them with any rights to cancel if their due diligence investigations identified problems.

We recommend that you be aware of these limitations when considering signing an Agreement which includes a solicitor approval clause.

It is also strongly recommend that if you are planning to purchase a property “off the plans”, that you first contact your legal advisor.  They will be able to conduct a review of the Agreement and assist with renegotiating terms of the Agreement prior to you signing it.  They will also be able to assist you with inserting any further conditions that you require, such as making the Agreement subject to you obtaining suitable finance.

Laurie Pallett
Senior Registered Legal Executive
Wellington

 

 


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