How we can help you in 2020We hope that you and your clients have had a relaxing holiday break and that the new decade has begun well for you all. Predictions for 2020 2020 is shaping to be another busy year in the New Zealand property market. House prices are predicted to continue to trend upwards nationwide, particularly in the regions and during the first half of the year. In particular, we have been pleased that the Christchurch market’s strong end to 2019 appears to be continuing into the start of this year. Research group Demographia’s recent housing affordability report has found that an increase of supply in Christchurch is translating to increased affordability in our region, as opposed to the other major centres. We are interested to see how the market will operate throughout the rest of the year. The debate is mixed as to whether interest rates will remain at their current low levels or begin to creep up in the latter half of 2020, perhaps in response to a number of factors. One such factor may be the Reserve Bank’s new capital rules for banks which will start taking effect from 1 July 2020. The promise of an election on 19 September 2020 may also introduce uncertainty to the market. We expect housing to be another hot topic of debate, and traditionally buyers and sellers tend to adopt a ‘wait and see’ cautious approach during an election cycle. The more things change, the more they stay the same Amongst the possibility for change however, we suggest at least a couple constants remain.
Cavell Leitch’s difference Cavell Leitch’s property team consists of experts who live and breathe property law. We believe that our points of difference include:
Some clients are comfortable dealing with a certain level of risk. Other clients want to ensure every duck is lined up before they commit to a purchase or a sale. We will work alongside the client and the agent to ensure the client reaches the level of comfort they need to proceed. For first time buyers, the process will be new and stressful. We take time to walk the clients through each step, explain the lingo, and help them organise the reports and paperwork needed. Either way, when issues present themselves, we work alongside the client and the agent to find a solution wherever possible. We’re not deal killers. We recognise the vital role agents play in a transaction. We pride ourselves on our communication, and calm and creative advice when complications arise.
Cavell Leitch has been a strong force in the property market for decades. Over this time our team has developed a knowledge base, systems, and processes which are second to none. While we price our services competitively, we acknowledge that we may not be the cheapest option in the market. However, the old adage applies – you get what you pay for. Our collective experience is invaluable to our clients, whether they are a first home buyer or an experienced investor, buying a historical villa or buying off the plans.
Another result of our experience and presence in the market are the great relationships with other professionals which the client may need to rely on to get the deal over the line. We have formed close working relationships with property inspectors, bankers, valuers, brokers, accountants and will work alongside them and the agent to achieve the best result for our clients.
We believe a key element of Cavell Leitch’s success is the emphasis we place on the training and continued development of our team members. We constantly upskill to keep abreast of the changes in the law and the market. Whether that be changes to tax legislation, political debates over changes to residential tenancy law, keeping informed as to trends in the lending market, or adapting to revisions in the standard sale and purchase agreements. We also enjoy sharing our knowledge. If your team would benefit, then we would really enjoy the opportunity to visit your office and talk about what we’re seeing in the market.
Cavell Leitch’s team is full of property specialists, but we can also cover any other need our clients may have including asset protection, putting wills in place, commercial transactions, and handling employment or immigration issues. We wish you all the best for a successful 2020. We would love the opportunity to benefit your team or your clients. Please contact the writer or a member of our property team today for more information. Practical changes under the 10th edition ADLS sale and purchase agreement. The 10th edition of the ADLS Agreement for Sale and Purchase brings several changes. In this article we set out those changes which have had the biggest impact in practical terms to date. Address for service One practical change under the 10th Edition is that notices can no longer be served by fax. Notices can instead be served by email to the address noted on the back page of the agreement. We have on occasion received agreements where no address for service has been filled in, and it would be appreciated if you could complete this at the time the contract is drafted. In turn this will make the confirmation process run smoother. We would recommend against the vendor or purchaser recording their own email addresses for the purpose of serving notices, to ensure that notices aren’t missed or misinterpreted. Please give the solicitor a quick call if you’re unclear on the most appropriate address to insert. We also suggest that you revisit the wording of your office’s standard further terms. For example an escape clause will need to be drafted so the address for the service of notices is consistent with the address noted in the contract’s main body. Finance condition If a purchaser attempts to cancel a contract because they were not able to obtain finance, then the vendor can ask the purchaser to provide a satisfactory explanation of the grounds relied upon by the purchaser, together with supporting evidence. Clause 9.1(1) does state that finance shall be “on terms and conditions satisfactory to the purchaser in all respects”. It will be fascinating to see how a disputed cancellation on finance grounds would play out in practice, and what sort of evidence would need to be provided by a purchaser. For example, it could be argued that if a purchaser could validly cancel a contract if they could provide evidence that they were only able to obtain finance from a second tier lender, with a high interest rate and high fees. Building report condition (Clause 9.4) The timeframe for confirmation of the building report has been extended to 15 working days to line up with the LIM timeframe. The default timeframe until an agreement will go fully unconditional is therefore significant. If this is a concern, then the vendor may wish to alter the default timeframes, or insert an escape clause. Building reports must be in writing and otherwise meet the requirements on the clause. Residential leases Vendors of rented properties will need to provide a copy of the lease documents on settlement (e.g. the original tenancy agreement). Vendors will also need to take care that the lease details are correctly recorded in the contract. As always, we are happy to answer any questions you may have. Please contact the Courtney or a member of our property team today for more information. David Fitchett - Partner David is experienced in all areas of property, particularly residential and commercial transactions where he has built a reputation as one of New Zealand’s leading practitioners.
Courtney McHugh - Registered Legal Executive Courtney is a registered legal executive in our Property team, specialising in residential property. Courtney thrives in this fast paced environment and when it comes to buying and selling property (conveyancing), Courtney ensures her clients are supported and guided throughout the entire process.
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