Commercial Property Newsletter - August 2018 Purchasing a property? Read this first! Written by David Fitchett - Partner, Christchurch (Property) If you are planning to purchase a property, whether it is residential or commercial, then it is highly recommended you carry out proper due diligence on the purchase. In this article, we set out some tips to allow yourself an opportunity to work out if the property is right for you before the agreement is unconditional. Ultimately you want to reserve the option to pull out of the purchase if your investigations uncover an insurmountable problem. Make sure your agreement contains an effective due diligence clause The sale and purchase agreement should include a robust due diligence clause if you want an opportunity to fully investigate every aspect of the property before you commit yourself to the purchase. A standard sale and purchase agreement requires a vendor to make several warranties, and several of those warranties require a vendor to provide the purchaser with certain information about the property. For example, a vendor must tell a purchaser if they have received a notice from NZTA that the Transport Agency intends to take part of the property to build a new road. Getting it right – the tender process. Written by Jeroen Vink - Associate, Christchurch (Property) The tender process is widely used in commercial property where an owner is engaging building contractors or is selling a property. Requests for tenders can create a separate process contract and this process contract has implied duties and obligations. It is important to understand these duties and obligations and also what you can do to mitigate them. The consequences for getting it wrong can be costly should unsuccessful parties seek compensation. Implied terms For many years the tender process itself did not create any legal obligations on the parties. However, it is now well established that when a party makes a formal request for tenders (the offer) and that request is met with a complying tender bid (the acceptance) then a process contract is formed completely separate from the principal agreement for the sale of property or for construction services. When a separate process contract arises there are several obligations or duties that are implied in the tender process unless they are specifically excluded by the tender document. These obligations and duties are:
David Fitchett - Partner (Property) David specialises in property law, and acts for a broad range of commercial, residential and industrial clients. His particular area of expertise is in the area of commercial leasing where he acts for international, national and local landlords and tenants. David works with his clients and their agents to ensure their lease documents are tailored to their individual circumstances from the outset.
Jeroen Vink - Associate (Property) Jeroens's specialist areas of practice include construction and property development, the sale and purchase of commercial and industrial property, leasing (acting for both landlord and tenant), property financing and residential property. Jeroen also advises on insurance claim resolutions and settlements, construction contracts, Overseas Investment Act consents and other property related issues. |