Legal advice a key part of home buying

IF YOU’RE thinking about buying or selling a house, the first door you should knock on is your lawyer’s. Property agreements can be entered into without legal advice but there are legal and practical implications for a vendor or buyer who fails to settle, even if settlement is delayed through what appears to be no fault of the person concerned.

For a beginner’s guide to the legal niceties of buying and selling a home, the Law Society provides a property law section online at www.propertylawyers.org.nz.

It answers frequently asked questions and explains some commonly used terms, such as conveyancing.

Conveyancing is the legal work needed to complete the sale or purchase of a property.

It’s commonly seen as a paper shuffling exercise but many sale and purchase agreements contain conditions that may need to be fulfilled before the transaction can proceed.

Whereas an unconditional deal must proceed on the agreed date at the agreed price, no matter what, a conditional offer only becomes a binding contract once all the conditions are satisfied.

These can range from securing finance and the search and approval of a title to receipt of a satisfactory

builder’s report or Land Information Memorandum (LIM) and the unconditional sale of the buyer’s property.

Property lawyers can help with the wording of these conditions so they meet the client’s needs.

They can also advise in other areas of the law that may need to be dealt with as part of the overall transaction, such as making a will, setting up a trust and taxation implications.

High on any home buyer’s due diligence should be obtaining a LIM report on the property for sale.

This is provided by the local authority and will identify the zoning of the property and whether the proper building consents have been obtained for any additions and alterations.

Buyers also should seek a valuation report before committing to a sale.

Having a registered valuer assess the proper market value of the property may provide other useful information for borrowing needs as well.

A building consultant’s report and/or an engineer’s report may also be appropriate.

If there are any doubts as to the condition of the property, structural building issues or concerns about the land generally, talk to a property lawyer about arranging for a qualified builder or engineer to inspect the property and report fully on its condition.

The lawyer will ensure that a condition is inserted into the contract making the purchase subject to the purchaser being satisfied with the results of that report.

If the report identifies problems, a lawyer can recommend options and negotiate to have the problems fixed at the vendor’s cost before settlement or seek a reduction in the purchase price.

Without a condition in the contract, or with a badly worded one, the buyer might have to complete the purchase and take on any problems.

Property lawyers also check property titles. These documents record who owns the property and any mortgages or other restrictions that apply to the property, which might prevent enjoying the use of the land, such as covenants or easements.