Should a lawyer review the Sale and Purchase Agreement? Buyer beware!
It’s second nature for those involved in business to engage a lawyer experienced in business and commercial law for business advisory services. Whether it’s for a startup or an established organisation, contract reviews are a valued and expected expense to ensure the terms and conditions are fair, accurate and aligned with the client’s best interests. Yet, this same level of diligence and self-protection is often neglected in personal matters, including buying a property.
With rising property prices, unstable mortgage rates and unemployment rates expected to hit 5% by the end of the year, spending more money to complete a house purchase is likely the last thing you want to think about. However, and this is a huge however, engaging a Christchurch property lawyer to review the Sale and Purchase Agreement before signing is a wise investment; it is a strategic move that can save you from significant future complications.
Weston Ward and Lascelles are leading property and conveyancing lawyers in Christchurch who help clients buy properties. From first home buyers to clients with multiple properties, our advice is always the same: do not sign on the dotted line until the Sale and Purchase Agreement has been reviewed, and here’s why:
- Entering into a Sale and Purchase Agreement is legally binding, it’s a contract.
- A major principle of property law is caveat emptor or “buyer beware”.
The onus is on you to protect your property, assets and finances, and a Sale and Purchase Agreement contact review does just that.
Ensures a smooth conveyancing process compliant to laws and regulations
The key role of a property lawyer is to oversee the conveyancing process and keep the schedule on track. Invariably this means liaising with real estate agents, the vendors’ lawyers, local councils and other stakeholders. Aside from collating and reviewing information, conveyancers ensure the legal obligations are adhered to.
Sale and Purchase Agreements are guided by the Real Estate Agents Act 2008 and several other regulations including the Real Estate Institute of New Zealand (REINZ) guidelines. Your property lawyer verifies compliance, this includes:
- Clear identification of the involved parties (buyer and seller).
- Accurate description of the property (address and legal description).
- Stated sale price and payment terms (deposit amount and due date).
- Confirm the settlement date and terms for ownership transfer and payment of the purchase price balance.
They also review conditions of the sale, such as the security of the buyer’s finance, and confirm:
- A satisfactory building inspection report.
- LIM report (Land Information Memorandum).
- The current tenancy of the property.
- Fixtures and fittings included in the sale.
- Specific repairs required before settlement.
Detects any unfavourable terms and conditions in the Sale and Purchase Agreement
In the excitement of purchasing a property it can be easy to miss terms and conditions that are unfavourable or put you at a disadvantage. This can include hidden costs, restrictive clauses or unreasonable obligations. By bringing attention to such terms, you can negotiate changes or seek legal advice to protect your interests.
Avoids any misunderstandings and reduces risk of future disputes
Sale and Purchase Agreement property contracts often include complex legal terminology and technical language which, if not interpreted accurately, can cause ambiguities and unintended disputes. A property lawyer clarifies any confusing clauses, so the purchasers buy the property with a complete understanding of the contract’s content.
Protects your investment
A lawyer does not solely look at the nuts and bolts of a property and the geographical context of the section of land the property is on. They also navigate the financial commitment you are committing to and the potential tax implications on the future sale of the property and ensure you are compliant with current regulations. The Brightline test NZ is a critical consideration for anyone buying or selling property. This rule dictates that if you sell a residential property within ten years of purchase (five years if bought before March 27, 2021), you may be liable to pay tax on the profit. This legal foresight can save you from unexpected financial burdens and enable you to plan accordingly whether that’s holding the property in a Trust or some other beneficial financial structure relevant to your circumstances.
Property law is intricate, and the ramifications of an improperly reviewed contract can be severe. Whether you are dealing with property law in Christchurch or on a national level, a professional lawyer helps you navigate these complexities. They provide a property law service to encompasses everything from initial contract review to the final transfer of ownership, ensuring every detail is meticulously handled to safeguard against potential disputes that may arise and preemptively address them within the contract terms.
A legal review ensures that you are making a fully informed decision about the property you are buying. If you would like to have a chat with one of Weston Ward and Lascelle’s property team, call 03 379 1740. Remember, it’s never too early to seek legal advice for buying a property.
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