If you think you might succumb to temptation and buy a holiday house at your favourite beach this holiday season, here’s some points to consider when entering a sale and purchase agreement.
Your best option is to talk to a lawyer before you enter a contract to buy that beach bach. But, they might be on holiday too. So, if you can’t get to your lawyer, make sure your sale and purchase agreement has some conditions in there to offer you a level of protection. There are the usual LIM, building inspection, and finance conditions. But, you might want to also consider having these conditions too:
- Due diligence condition: this condition allows you to do some investigations before the contract becomes unconditional. If the property doesn’t stack up, you can cancel the contract, usually without providing a reason. This clause can potentially save you thousands of dollars!
- Subject to solicitor’s approval condition: this condition can be sued to cancel the contract on the grounds of conveyancing aspects of the purchase. So, not as broad a protection as the due diligence clause, but still a “good to have”.
- Insurance condition: given the changing nature of insurance in New Zealand and the impact that natural disasters can have, it is worth adding a condition that provides you are able to obtain insurance for the property.
Don’t get caught up in the hype. There’s always “someone else” interested in the same property. Take your time and make sure it is the right purchase for you.
Finally, make sure you get some accounting advice, there could be some unexpected tax complications.
We’re open again from 6th January to help you with your property purchases and conveyancing needs. We can also help you with ownership structures, negotiating property sharing agreements, succession planning, and any disputes that might arise
Wishing you all the best for the Summer holidays.
Joanne Dickson
