Common Pitfalls of a Purchaser in Conveyancing
- Read the Agreement – Take your time to read through all the relevant sections and conditions. Seek legal advice BEFORE signing. Be careful of verbal agreements!
- GST – Check whether the price is “plus GST” or “inclusive of GST”. This may be relevant if the property has a taxable activity or is in a hotel pool.
- Tenancy – If you are purchasing “subject to tenants” ensure you get a copy of the agreement prior to signing the agreement. Check for term, price and bond!
- Finance – Bank pre-approvals are often conditional and not property-specific so be careful of making an unconditional offer based on pre-approvals!
- Warranties ≠ Conditions – Warranties are not the same as conditions!
- Chattels List – Ensure the chattels are all correctly listed. All chattels (cf fixtures which are furniture fixed to the property) are excluded unless specified in the chattel list. Defective chattels will be transferred “as is” unless there is a warranty clause.
- Real Estate Agent – Remember the real estate agent is always the vendor’s agent.
- Cladding / Monolithic walls – New Zealand still suffers from leaky building syndrome. We strongly recommend obtaining a LIM report and a builder’s report (NB: Council property file also includes a further extensive file of ALL documents for the property).
- Pre-purchase inspection – All purchasers (unless the property is tenanted) have a right to a final pre-purchase inspection to ensure all is in order. However please ensure your initial inspection PRIOR to signing the agreement is executed with caution.
- Property Insurance – – It is the Purchaser’s obligation to organise insurance (unless body corporate – there will be housing insurance, but not contents). Pay special attention to earthquake cover given current issues with earthquake strengthening.
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You may also be interested in our article on Common Dangers for Property Sellers here.