New REINZ sale and purchase agreement enters the market

A new plain English Sale and Purchase form has been developed by the Real Estate Institute of New Zealand (REINZ) which will be available to vendors and purchasers this week. REINZ chief executive Christine Le Cren says the form has taken around seven months to prepare and should help all parties involved in property transactions.

Currently, the form used by the market is one jointly owned by REINZ and the Auckland District Law Society (ADLS).

Le Cren says the new form does not replace the ADLS one and it will be up to individuals to decide which one they choose to use.

She says the plain English form is clearer than the existing one and is easier to use, particularly as it has a better use of white space and less dense text.

In addition to that, it has "warnings" tick boxes designed so users can understand the consequences of what they are signing.

She says there are a few differences in some of the legal concepts, but feels they are explained better than in the ADLS form.

It helps to clarify GST issues. This is important for property investors, as well as commercial and rural property owners.

Another change is that information about reports, such as Land Information Memorandums (LIM) are now at the front of the form.

Le Cren says although there are changes in the form "it still maintains the integrity of the law"

The Law Society says when it found out about the REINZ's plans for its form, it opposed them.

It conveyed "its strong support for there being one standard real estate agreement throughout the country. However, for reasons beyond the (Property Law) section's control, this vision could not be realised."

However, it has had input into the new form and is also understood to be reviewing the ADLS form which has been the standard form for decades and is currently in its eighth edition.

NOTES FOR KEYTRACK LAW FIRM USERS ON THE NEW AGREEMENT

The new agreement will not alter KeyTrack’s functionality in any respect. However, some terminology changes may need to be carried out in your own precedents. Keytrack staff are available to change precedents for you and will in due course, once the REINZ agreement becomes widely used, add to or change to it's standard precedents in the site.
As with any new developments, we imagine there will be some initial resistance from members of the Real Estate profession but as soon as some of the key parties start using the new forms the others will follow. KeyTrack intends to change the terminology and order of conditions in the TSR to reflect the new agreement so that the conditions will be entered into the TSR in the same order as they appear in Part 2 of the REINZ agreement, as follows;
1. Property Title Condition
2. Land Information Memorandum Condition
3. Loan Condition
4. Building Report Condition
5. Tenancy Condition
6. Additional clauses
In the interim, KeyTrack suggests as deals start arriving at your office on the new REINZ form, you simply add additional conditions reflecting the new terminology so that your email reminders and alerts to clients and agents reflect the new agreement’s wording.
KeyTrack also suggest, that from now on, you may like to add a note to each new TSR created referring to which form was used for this agreement, i.e. ADLS/REINZ agreement or REINZ agreement. KeyTrack reminds you that scanned copies of the agreement can be attached to the TSR.