The COVID-19 lockdown is a unique situation for New Zealand and the rest of the world.

Property settlements are just one of the areas that have already been affected. Many clients are now in a position of having an unconditional contract during this period but have yet to settle on the purchase and/or move into the property.

Some of the issues for settlements that have been raised during the COVID-19 Alert Level 4 lockdown include:

  1. The purchaser not being able to conduct a pre-settlement inspection
  2. The handover of keys
  3. Signing of documents for vendors or purchasers that do not have access to audio visual technology and/or a printer and scanner
  4. The vendor and/or the purchaser being unable to move due to Government restrictions on the movement of people
  5. The vendor and/or the purchaser not being able to engage a moving company or being able to hire the necessary equipment and assistance for moving

There has been some guidance for settlements during this period from the New Zealand Law Society. The guidance includes an agreement that settlement is deferred to 10 working days after the COVID-19 alert level is reduced to level 3 or below, or the COVID-19 alert level is reduced to level 2 or below, or such other date as may be mutually agreed. So far, this guidance has been regularly agreed to by the parties involved.

At this stage it is still unclear if some or all of the issues raised above will remain relevant under COVID-19 Alert Level 3, but it is more likely that settlements won't be able to proceed until COVID-19 Alert Level 2 is reached.

Under all alert levels, there may still be an issue for vendors or purchasers that are "high-risk" people because of the need to physically sign documents and move between properties.

Tenanted properties on the other hand can still settle as there is no moving required.

Some vendors and purchasers are still demanding settlement, but the advice from the New Zealand Law Society is that we are in a unique situation and there needs to be some give and take considering the current circumstances. The recommendation is that lawyers attempt to negotiate a fair resolution for all parties.

As the Government looks forward to what a COVID-19 Alert Level 3 might look like for property settlements, the current advice from is as follows:

"People can move homes at Alert Level 3. This includes rental moves. They can travel between regions, including using domestic air services for the purposes of moving house. All freight can be moved around the country at Alert Level 3, and moving companies can operate as long as they do so safely.

Where possible, the physical interactions involved in house sale, purchase and settlement should be done remotely where possible at Alert Level 3. It may be possible to do a final pre-settlement inspection in person, or have a real estate agent come into the home, as long as all physical distancing and public health measures are taken.

More detailed guidance on how this will operate at Alert Level 3 will be available".

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.