The Auckland District Law Society (ADLS) have recently released
new editions of their sale and purchase agreements. ADLS agreements
are the most frequently used contract documents for the sale and
purchase of real estate in New Zealand and as such any amendments
attract a good deal of interest.
The changes in the latest agreements are subtle but deceptively
wide ranging. We summarise below what we believe are the most
important changes for you to turn your minds to when entering into
Notable changes that you need to be aware
The new agreement contains additional vendor warranties.
Vendors will now be required to ensure that all equipment and
systems (including heating) are in reasonable working order on
settlement or they may be liable for compensation. If any item is
not in reasonable working order then this will need to be
specifically disclosed in the agreement.
Vendors are now explicitly required to provide electronic door
openers to all doors that are opened electronically. We accordingly
suggest that it would be prudent to check what you will be able to
pass over on settlement. If there are no electronic door openers or
if some are missing or inoperative then it will be best to clarify
this in the agreement.
If the property is a unit title, then by signing the agreement
you, as vendor, will be warranting that a pre-contract disclosure
statement has been provided, and that the information contained in
that statement was complete and correct. You may be liable for
compensation if it later transpires that the pre-contract
disclosure statement was misleading in any way so it is important
to get this right. We suggest that you arrange for a pre-contract
disclosure statement to be prepared well ahead of entering into any
agreement. We are always happy to help with preparing statements if
there is no established body corporate in place to prepare the
There is a notable focus in the agreement on tax and tax
collecting. Historically the GST information in Schedule 2 at the
rear of the agreement was frequently left blank by the parties when
completing the agreement. It will now be even more important that
Schedule 2 of the agreement is completed by both the vendor and the
purchaser at the time the agreement is signed. We suggest that if
you are unsure about the GST aspects of the agreement (i.e. whether
the property is used partly or fully as a principal place of
residence or otherwise) that you seek specific advice from your
accountant as tax consequences flow from the statements that are
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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