On Wednesday 25 March 2020, New Zealand entered Level 4 lockdown to reduce the spread of COVID-19. This unprecedented move requires all people remain at home unless they are accessing an “essential service”. The Law Society | Te Kāhui Ture o Aotearoa has confirmed that moving to a new house is not an “essential service”, so what does this mean for clients looking to buy or sell property?
It is still possible to buy and sell property during the lockdown.
If you are considering purchasing or selling a home during the lockdown, here are some things to consider:
- Can you still attend to purchaser conditions during the lockdown?
Many organisations are still operating remotely during the lockdown. Finance and insurance can often be arranged via phone or internet, so too can the signing of some legal and bank documents. Satisfaction of conditions, however, requires physical access to the property and this may be problematic. For example, obtaining a builder’s report. Extensions of time may be required for the fulfilment of such conditions.
- How can you complete a pre-settlement inspection on the property during the lockdown?
The inability to complete a pre-settlement inspection does not necessarily mean that you cannot settle your purchase. Almost all Agreements for Sale and Purchase contain provisions protecting a purchaser in the event of fundamental issues with the property post-settlement.
- Can settlement proceed as planned, or will you need to delay?
What are your options if you wish to settle during the Level 4 lockdown? If you are selling, can you rent the property from your purchasers until the lockdown lifts. If you are a cash buyer and purchase bare land, there may be no reason why settlement cannot proceed. If, however, you require funds from a delayed sale to proceed with a purchase, or you require the assistance of a furniture removal company, then you may need to defer settlement.
- Are you selling or buying a tenanted property?
If the property is sold tenanted, there may be no reason to delay settlement. If, however, the property is sold with vacant possession, then consider how the lockdown affects any notice that you must give your tenants. Tenants must remain in the property until the lockdown ends, and the Government has yet to determine if the lockdown will be extended. So, Landlords may need to extend the settlement date to ensure adequate notice is given to tenants.
If you have questions about property transactions during the Level 4 lockdown the team at Lundons Law can assist. Please contact us to discuss your options.