As we are all coming to realise, life under the current Covid-19 restrictions has changed! This includes buying and selling property. Many people will be worried about how their house sales and purchases will be handled over the coming weeks, particularly as to how confirmations and settlements will occur.
Cavell Leitch remains open for business
The good news is that most aspects of a property sale and purchase can be done electronically. Most lawyers are able to work remotely and will be able to provide advice and conveyancing services during the lockdown period.
Banks are also remaining operating during the lockdown as an 'essential service', as are Kiwisaver operators and Kainga Ora (who administers HomeStart grants). Buyers should be able to process their finance applications, albeit the process may take longer than normal to complete.
Difficulties in completing settlement
However, there are some parts of the process that won't be able to continue as normal – namely moving people and household goods. The Property Law Section of the New Zealand Law Society has advised that the movement of people associated with the settlement of property transactions is not considered an "essential service" and is therefore illegal under the current Covid-19 restrictions. Accordingly, this presents an issue where a vendor is not able to move out of a house and therefore provide the purchaser with 'vacant possession' of the property.
In line with this advice, we are recommending to our clients that where possible the parties work together to sort out solutions to settlements that will meet the needs of both parties. This is especially important where there are vulnerable people involved (e.g. elderly). In some cases, this may involve agreeing to defer settlement until the Covid-19 alert level has reduced to a level that will allow movement of people and household goods.
What about confirming conditional purchases?
The Covid-19 restrictions also limit the ability to complete some of the normal investigations done as part of a property purchase. These include building inspections, toxicology reports and pre-settlement inspections. A builder or purchaser simply isn't able to breach the lock-down to inspect a property.
Novel solutions are possible – for example we have seen some agents continue to market properties by hosting video inspections where the vendor walks prospective purchasers through the house via a video feed. However we do recommend that the parties agree to extensions to allow these investigations to be completed when the Covid-19 restrictions allow.
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.