Home-sale form alarms lawyers

Homebuyers are being warned not to use a new sale-and-purchase agreement which may not allow them to cancel a deal if a pre-inspection report shows problems with the property.

The new plain English form, produced by the Real Estate Institute (REINZ), has been praised for its simplicity. But lawyers have warned there is no case law, and consumers could find themselves becoming guinea pigs for expensive test cases.

The main differences include:

* Even if the agreement is conditional on a builder's report, buyers will need "reasonable" grounds to pull out.

* The building report must be from a "suitably qualified person".

* Problems with the title will no longer be an instant way to get out of a contract.

* Instead, buyers will have to go through a process of asking sellers to fix the problem before they can back out and can only dispute a title defect that will or might affect the buyer's use and benefit of the property.

* Promises (previously knownas warranties) given by vendorsin the new document are widerthan they are in the old ones.

To read the full NZ Herald article, click here

Posted: 3 Aug 2009

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