We are now officially in our first day of level 4 lockdown. The team at Kannangara Thomson are all up and running and able to work remotely from home. We remain ready and willing to help you with all your legal needs to the best of our ability in these trying times.
If you have a current conveyancing transaction you will no doubt be wondering where this leaves you with regard to the confirmation of your further terms of sale (special conditions inserted for your benefit) or settlement of your transaction if that is scheduled to happen during the period of the lockdown?
The vast majority of transactions due to settle over the next four weeks of Level 4 lockdown will most likely have parties that are not in a position to settle. Even if the loan and security documentation and all client authority and instruction forms have been signed, moving companies will not be operating so vendors will be unable to give vacant possession.
In addition, purchasers will not be able to complete a final inspection and will have no means of moving their own furniture in the absence of moving companies operating during this time. Any such relocation will likely be a breach of the Level 4 lockdown requirements as other than essential travel in any event. Add to that the issue of where and how to collect the keys given the requirement for no non-essential travel and social distancing at all times.
Although your property lawyer from Kannangara Thomson can and will continue to operate from home, there are many factors outside our control that might significantly impact on the practicalities of settlement, such as:
• Key personnel in law firms being in self-isolation
• Clients overseas in isolation who cannot access documents
• Clients unable to sign documents (e.g. elderly clients who might struggle with technology)
• Furniture removal firms unable to operate due to lockdown
• Inability to have services such as electricity/gas etc connected
• A lack of scanning capability for either you or us working from home
The Property Law Section of the New Zealand Law Society has come out with the following recommendation which we are advising our clients to adhere to. It is suggested that the following wording be added to all contracts.
“The parties agree that settlement is hereby deferred to the 10th working day after the Government reduces the Covid-19 Level to Level 2 or below, or to such other date as may be mutually agreed. For the sake of clarity, neither party shall have any claim against the other in relation to this deferral.”
Similarly, if you have conditions due for confirmation such as a building report, finance or approval of insurance or a Land Information Memorandum, we are recommending that it be agreed between lawyers for both parties that the date for satisfaction of those conditions is extended until 10 working days following the lowering of the level 4 Lockdown to level 2.
Why are we recommending this? Well, for starters you will not be able to engage a building inspector to obtain your Property Inspection Report and nor will you be able to obtain a valuation for finance purposes during the lockdown period, with neither of those being considered as essential services. Indeed, for the purpose of your property transaction, lawyers are not considered as an essential service either.
We will be able to search titles and we may be able to obtain a Land Information Memorandum depending on staffing levels and volume of work at the relevant council. Similarly, you should be able to take steps to obtain insurance. On balance though, we feel that deferring the date for satisfaction of all conditions is the way to go.
There will be some settlements that may be able to happen. One such example is a property transaction involving bare land because there will be no final inspection required and nor will there be keys to collect.
If you have any query please feel free to contact your Kannangara Thomson property advisor by email or telephone. Most importantly, keep well and stay safe at home.
26 March 2020
Since writing this article the New Zealand Law Society has issued a statement saying that in the current circumstances any property settlement which involves the movement of people is to all intents and purposes illegal.
We have noticed a large increase in the number of property sales put to the market by deadline sale of late. So what is a deadline sale and how does it compare to the sale of a property by auction?
In previous articles on this conveyancing lawyer blog, we have talked at length about our offer to review auction packs that no obligation to our clients. If you are unsuccessful and do not end up as the successful bidder we do not send you an account. It is that simple!
With a sale by auction, you are generally provided with as much information as possible about a property by the owner and their agent. This will traditionally include a Land Information Memorandum, a title search, copies of any easements or encumbrances affecting the title, often a building report and in Christchurch at least, all information relating to any earthquake claims, the settlement of those claims and repairs and how they have been completed.
So how does this differ from a deadline sale? Similarly to an auction, the owner will decide with their agent to accept offers by a certain predetermined date (unless sold sooner). Much information is then provided by the vendor similar to the situation where a property is listed by auction. This will typically include a Land Information Memorandum, all information regarding earthquake damage and repairs and sometimes a building inspection report also.
The significant difference with making an offer on a property offered by deadline sale is that unlike an auction, you can insert conditions for your benefit as the purchaser. So, even though you are able to do some of your due diligence in advance you can still make your offer subject to the likes of a finance condition, a Land Information Memorandum condition and perhaps a building report if you like.
From a vendor’s point of view of the hope is that if you are happy with the information in the LIM which is provided, you might make your offer without a condition requiring you to obtain a Land Information Memorandum.
Often a deadline sale will end up in a multi-offer situation where more than one party wishes to make an offer by the deadline. In that situation where there is an agent involved, you should be asked to sign a multi-offer form acknowledging that you know that multiple offers are to be presented to the vendor. When this happens you will get one chance to put in your best offer and if successful, you will never know how much more you offered then the next highest bidder for the property.
In a multi-office situation, buyers will often strive to make their offer as clean as possible by doing as much of their due diligence as possible based on the information provided and making their offer as clean as possible. In other words, with as few conditions as possible to make their offer attractive to the vendor. In such circumstances, a vendor might accept an offer slightly lower than the highest offer if it is subject to no conditions almost no conditions.
The last thing you need to know about deadline sale is that often when an offer is received and that offer is at a level at or close to the selling price required by the vendor, the deadline will often be brought forward. If at that stage you are the only party making an offer but there are other people interested, the agent will go back to the other interested parties and let them know that there is an offer and that the deadline will be brought forward.
If that happens then the agent will tell you that you are in a multi-offer situation and usually advise you that you might consider whether you want to increase your initial offer because in those circumstances you will only get the one chance. How much you offer will obviously depend on how much you like and want the property.
As your Christchurch conveyancing lawyer, our offer with deadline sale properties is the same as our free auction Pack review for those going to auction. We will review the deadline sale information provided and report to you and if you are unsuccessful there will be no cost to you. To avail yourself of the service simply go to the contact page on this website and send us your details and a short message. We will be in touch with you promptly.
Check out the link to my article on LinkedIn about the landmark decision of the Court of Appeal in New Zealand in the case of Chief Executive of The Ministry of Social Development (MSD) v Broadbent.
In the wake of the horrific events on Friday the 15th of March 2019, we have all had occasion to reflect on what is happening in our little country. I thought (hell I think we all thought) that we were immune from this sort of horrendous hate crime way down here in the South Pacific but sadly, that naivety has now been proved wrong.
As my sister in law has just so eloquently and poignantly put it in a Facebook post, today we get to hug those we love, tell them we love them in person or give them a call or send them, a message, but for 50 families this week that is not the case.
Like many of you, I have been so impressed with the reaction of particularly Cantabrians, but in truth, all of New Zealand, in rallying around the Muslim community to show them that they are not alone, their pain is our pain and that we all hurting at this terrible crime which has been committed at their place of worship.
My business, like some other law firms, has tried to do its little bit by offering the services of our bi-lingual lawyer, Sandra Iskander, who speaks both English and Arabic fluently. That offer remains true and if any family affected by this dreadful tragedy requires pro bono legal services, you are welcome to call Kannangara Thomson on 377-4421 and, ask for Sandra in the first instance. If your legal query is outside the scope of her experience, she will find someone else who can help you.
I think we can all be proud of the reaction of our government, our country and our people. Evil cannot triumph where there is love, compassion, unity and understanding.
This article is kindly supplied courtesy of the team at Advanced Mortgage Solutions. Their expert team can assist you with any aspect of obtaining a home loan and if you are looking for expert help from a mortgage broker in Christchurch, we can highly recommend Scott and his team.
The Welcome Home Loan product has been put in place to help first home buyers purchase a property for themselves.
For many home buyers, the problem with getting a normal home loan is finding the deposit. Most lenders currently require a minimum 20 percent deposit. With a Welcome Home Loan you only need a 10 percent deposit.
Help with your deposit is available.
There are several deposit assistance options available:
- Your deposit can be gifted by a relative (Please contact us for clarification around the gifting tules).
- You can apply for a KiwiSaver Deposit Subsidy or KiwiSaver Savings Withdrawal.
- You can team up with other borrowers to put together your deposit and purchase a home.
Maximum amount you can borrow:
The maximum amount you can borrow with a Welcome Home Loan depends on the region you are buying in. Each region has a maximum house price cap. The maximum loan for that region is the house price cap less your 10 percent deposit.
Find out your regional purchase price cap below.
- Auckland – $600,000.00
- Hamilton City, Tauranga City, Western Bay of Plenty District, Kapiti Coast District, Porirua City, Upper Hutt City, Hutt City, Wellington City, Nelson City, Tasman District, Waimakariri District, Christchurch City, Selwyn District, Queenstown Lakes District All – $500,000.00
- Rest of New Zealand – $400,000.00
Additionally, to incentivise the supply of new builds, the Minister has established a second tier of house price caps. For new builds, each house price cap is $50,000 greater than the cap for existing homes.
|Region||House price cap for existing/older properties||House price cap for new properties|
|Hamilton City, Tauranga City, Western Bay of Plenty District, Kapiti Coast District, Porirua City, Upper Hutt City, Hutt City, Wellington City, Nelson City, Tasman District, Waimakariri District, Christchurch City, Selwyn District, Queenstown Lakes District||$500,000||$550,000|
|Rest of New Zealand||$400,000||$450,000|
There are two income caps that apply for a Welcome Home Loan.
- For one borrower you must have earned no more than $85,000.00 (before tax) in the last 12 months.
Are you eligible for a Welcome Home Loan?
- If you are borrowing with one or more other people you must have a combined household income of $130,000 or less (before tax) in the last 12 months
You will need to meet the specific lending criteria below.
- You must be a New Zealand citizen or a permanent New Zealand resident (holding a ‘Permanent Resident Visa’).
- Have worked with the same employer for 12 months (there are some cases where this can be 6 months) – Cannot earn over the limits put in place
- Cannot purchase property over capped limits
Other things you need to know:
- Cannot currently own property (If you have owned property in the past there a couple of circumstances where the Welcome Home Loan product can be used).
- The Welcome Home Loan is for owner-occupied properties only and cannot be used for rental or investment properties. – You must not own any other property.
- You may need to pay fees such as application fees or Lenders Mortgage Insurance fees.
There is a common misconception that conveyancing is ‘easy’ and that you should be able to get your house purchase done ‘on the cheap’ by anyone claiming to be competent in this field. In this post, we will try to bust a few of those myths and at the same time, explain a few of those confusing terms which you will hear used often in connection with your house purchase.
To many, the term ‘conveyancing’ itself is a confusing one. After all what exactly does it mean? Put simply, it is the process by which we, as your conveyancing lawyer, help you ‘convey’ or transfer ownership of a property from the existing owner (the vendor) to you (the purchaser) as the new owner. At the same time, in the vast majority of cases, we will also be instructed to act for your bank to register
This again is an area where many
You see, when you finish paying off your loan(s) to the bank and you no longer owe any money to the bank, you have in fact cleared or paid off your loan, but the security for that loan is a different issue altogether. The mortgage you hear referred to is the security registered by your conveyancing lawyer to give your bank security for the money it has advanced to you by way of loan. In order for the ‘mortgage’ to be removed once you have repaid the loan in full, it is necessary for someone to write to your bank requesting that the mortgage security be released. Once you have paid off the loan and discharged or removed the mortgage from the title, you can truly be said to be ‘mortgage free’.
In some cases, even though your loan has been repaid, it is still a good idea to leave the mortgage security in place on the title. If, for example, you were contemplating buying an investment property or upgrading the kitchen or the bathroom in your home, you might want to borrow funds from the bank to help with this. Having the mortgage still in place over the title saves you the time and money of registering new security for the further advances, whatever the purpose of those advances might be.
The phrase ‘equity’ is another term which often confuses some people. The equity you have in the property is calculated by taking it’s current market value of your home and deducting any loans you owe to your bank. The net figure you arrive at will represent the equity which you have in your home.
This can become particularly important if you wish to buy an investment property as a part of your retirement plan. In many cases, rather than having cash savings to put toward the deposit, you might borrow against the equity you have in the family home. The purchase price is often therefore 100% borrowed, partly against your ‘equity’ in the family home and then partly against the security of the investment property itself.
If you want conveyancing done well, and everything explained in Plain English by an experienced practitioner with 30 years’ experience offering guaranteed fees at competitive rates you don’t need to look any further. Just enter your details on our contact page and we will get back to you, usually within 24 hours at the latest.
With recent changes to the law, we have had a lot of inquiry regarding the recent changes to the Overseas Investment Act 2005, and whether clients are eligible to buy a home in New Zealand. The rules can be confusing, particularly if you are not a New Zealand Citizen. Since 22 October 2018, anyone purchasing land in New Zealand is required to complete a Residential Land Statement relating to whether the transaction requires consent before they can proceed.
An area of confusion is if you are not a New Zealand citizen but are in a relationship with a New Zealand citizen. In most cases, the answer will usually be yes and you will be able to purchase a home. However, we need to temper that by saying that your relationship will almost certainly need to be a qualifying relationship as defined by New Zealand law. This is because there is an exemption if your spouse or partner is a New Zealand Citizen or ordinarily resident in New Zealand – no consent is required.
You can also purchase land in New Zealand if you are ordinarily resident in New Zealand yourself (have a residence class visa and have been living in New Zealand the last 12 months and are a tax resident – have been in New Zealand for 183 days in the last 12 months and tax residency has not stopped).
If you are unsure about your eligibility to purchase a home, feel free to contact your conveyancing lawyer to discuss your eligibility.
Everyone has a story about a conveyancing lawyer who has quoted them one price and then charged them another. Most lawyers record their time in six minute units and live in a world where they have a large budget to meet each month. So every time you pick up the phone and talk to that lawyer, if their hourly rate is say $350, which is par for the course among Christchurch lawyers, your phone call just cost you $35! It doesn’t matter whether that phone call took 30 seconds or five minutes! But watch out, stretch the call out to 7 minutes and all of a sudden you’re likely to be up for $70 for that phone call!
We think that is wrong so when we help you with your conveyance we will send you a letter of engagement as we are obliged to do, but in that letter we will specify a fee which we have agreed with you and, here’s the good bit, we will honour that fee regardless of how complicated your transaction might become. How can we do this? Quite simply, because we do not believe in imposing large budgets on our lawyers and legal executives and we do not record time.
As a business we do not fight for work by quoting on price either. If it is simply the cheapest price that you are after then you may find it somewhere else. But if what you seek is a fair fee for a job well done with excellent personalised service along the way then this is what we offer you. We like to call it “no surprises law”.
This can be particularly important for first home buyers who are often utilising the Welcome Home Loan product and who, because their deposit is usually less than 20%, will be paying a low equity fee to their lender and, almost always will not be receiving a contribution towards their legal fees. If that describes your situation then my guess is that what we are offering is exactly what you need, a fee which once quoted is set in stone and will not change.
So if you are looking for excellent service at a fair price for your conveyance which we will guarantee in writing then we invite you to go to our conveyancing lawyer contact page now and reach out to us now for your guaranteed fee quote.