Written by Nicole Burrows-Healy - Solicitor (Property)

The Real Estate Authority (REA) has recently published an interesting article on the Nielsen Survey stating that many people found property transactions overwhelming and struggled to find consistent information on the process.

The full article can be seen here.

The article reports that the majority of vendors and purchasers lack knowledge about the process of buying and selling a home from beginning to end.  This is an eye opener for our profession and we expect it may also be for your profession.  We do this work day in and day out and it is easy to forget that for anyone who does not usually deal in property this process is foreign and often full of jargon and complications.  While we knowingly attempt to make this easier we cannot always hold our clients' hands through this major life event and it is at these times our clients need us the most.

Cavell Leitch has recently put a great deal of effort into producing our buyer’s and seller’s guides which we hope provides some insight for our clients on the process from a legal point of view. They provide a step by step guide on what clients can expect as they buy or sell their home, what we need from them and what they need to do themselves.

With the new insight from the REA that our clients don’t know as much as we may give them credit for, we take the opportunity to include links to our guides below. These can be used to assist any of your buyers and sellers to hopefully make the process more understandable.

If you believe these might be helpful to your own clients please let us know and we would be more than happy to send out hard copies.

Written by James Leggat - Solicitor (Property)

Cavell Leitch’s Property Team has recently advised residents engaged in disputes over the effect of their subdivision’s land covenants. When the neighbourhood was originally subdivided, the developer placed covenants expressly forbidding the use of “temporary accommodation” for properties within the area. Tourism around this area had exploded in recent times, and the majority of these properties were benefitting from extra income through AirBnB and Bookabach. However, some of the other residents bound and having the benefit of the covenants did not support this.

The parties on both sides of the argument have since entered tense negotiations. It’s unclear whether either side will take things to the next level and commence court proceedings.

Of course, to actually enforce or remove a covenant can often require a lengthy and costly court proceeding. Perhaps more damaging to the homeowners in the area has been the effect on the value of the properties. As this dispute has now become common knowledge, many homeowners have had difficulty marketing their properties for sale.

Ultimately any instruments like a covenant that restricts the landowner should be picked up by their lawyer and discussed as a part of due diligence. It is therefore important that people buying in a subdivision are made aware of any covenants or other requirements that need to be adhered to. All instruments are different but one thing they all have in common is their rigidity.

Our team would be happy to provide advice relating to land covenants or any other title related matters you are wrestling with.

Written by Louise Maginness - Registered Legal Executive (Property)

Both real estate agents and lawyers work in a people based industry. Situations can sometimes arise where etiquette or protocol lines are crossed.  We have had some recent feedback from our clients which may not necessarily be of a legal basis, but should still be of interest.

Scenario A
The vendors have been present at every open home (even though they are using an agent).  They followed the purchasers’ builder around the property during their building inspection, and they shadowed the purchasers from room to room during their pre-settlement inspection. 

Generally speaking, there is no legal reason why the vendors can’t be present during visits by the purchaser or their representative. However, doing so can make the purchasers feel unable to freely discuss the property between themselves. It can also make the purchaser feel uncomfortable about checking inside cupboards or testing the heatpump during their pre-settlement inspection.

We suggest that you as agent try and steer the vendors away from being present as your role is to be the contact person.  Sometimes honesty really is the best policy; perhaps telling a client that it is unusual for the vendors to be present and suggesting they go for a walk or get a coffee.

There have (in rare cases) been thefts from properties during open homes. If this is concerning for your vendor clients you may need to demonstrate the steps you take to prevent this.

Scenario B
The vendors are selling the family home that they have lived in for most of their lives.  The agreement is unconditional and the vendors hear through a third party that the purchasers intend to renovate the property following settlement.  The vendors are highly upset that the purchasers would renovate the house.  They inform the agent that if they knew that the purchasers would be changing the property, they would have never have sold it to them.

Unfortunately, there is not a lot we can do for our clients in these situations, other than to front foot the issue. If the condition or location of a property leads you to believe it is likely to be redeveloped, you could remind your clients that this may be a likely outcome.

There is no legal reason that the vendor can cancel this agreement.  Once the purchasers own the property obviously they can do what they like with it including major renovations.  Whilst we understand that the vendors have an emotional attachment to the property, they need to move on from this property once sold.

Scenario C
We recently had elderly clients who informed us that they felt rushed during their pre-settlement inspection.  When the agent arrived at the property, they informed the purchasers that they needed to be quick as the agent had another appointment and needed to get away promptly.

We will always advise our clients to take their time with pre-settlement inspections and that they should check all chattels and fixtures are in the same condition as when the Agreement for Sale and Purchase was signed. The pre-settlement inspection may only be the second time the purchasers have been to the property so they may be noticing things they didn’t originally note during their first visit.  Ovens and heated towel rails, for example, take time to test.  A detailed inspection can save both parties unnecessary time and money if an issue is picked up before settlement rather than trying to claim under vendor warranties post settlement. The purchasers are within their rights to complete a full inspection and take their time.

If you have an interesting scenario (it doesn’t need to be of a legal basis) which you would like to discuss, our team is more than happy to chat.

Partner - Property

Phone: +64 3 339 5642

Email: janine.ballinger@cavell.co.nz

Solicitor - Property

Phone: +64 3 335 3470

Email: nicole.burrows-healy@cavell.co.nz

Solicitor - Property 

Phone: +64 3 339 5614

Email: james.leggat@cavell.co.nz

Registered Legal Executive - Property

Phone: +64 3 339 5643

Email: louise.maginness@cavell.co.nz

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