What happens if you have agreed to buy or sell a property and it is scheduled to settle during Covid-19 Alert Level 3 ?

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What happens if you have agreed to buy or sell a property and it is scheduled to settle during Covid-19 Alert Level 3 ?

There are some problems with trying to complete the sale or purchase of a property during the Alert Level 3 period, the main issue being that you cannot go to see a lawyer to sign the legal paperwork.

Personal movement including moving to a new house is permitted under Alert Level 3, provided you comply with the public health guidance. House removers may also work provided they comply with the public health guidance. This also allows for you to be able to move to a new house in a different region that is in a different Alert Level. For example, moving from Auckland (in Alert Level 3) to Tauranga (in Alert Level 2) is permitted.

If you are relocating your home or place of residence or business premises on a permanent or long-term basis, you must carry the following evidence:

• Proof of the new residence (e.g. a sale and purchase agreement, a residential tenancy agreement etc) and
• Drivers must have Photo ID (Driver’s Licence) and
• Passengers should have a Photo ID, unless it is not reasonably practicable (e.g. minors).

If you are purchasing a property and you require a building inspection or valuation, it is possible to still have these completed under Alert Level 3. Property inspectors, valuers, engineers and other tradespeople can attend at properties at Alert Level 3. This is provided that public health guidance and industry guidance is complied with as well as the property occupants agreeing to them attending at the property.

Pre-settlement inspections can proceed but should be done remotely where possible. There is risk with remote inspections and you will be at the mercy of the person showing you around as to what you can see. If remote viewing is not preferred or is not possible, an in person inspection can proceed provided the occupier agrees and the public health guidance is complied with.
If the pre-settlement inspection is to take place outside of your region in a different Alert Level you will need to cross the border and enter the region with the purpose that you are moving at that time and will not be returning back to the prior region. This applies to moving from an Alert Level 3 region to an Alert Level 2 region and moving from an Alert Level 2 region to an Alert Level 3 region.

The signing of documents with your solicitor is likely to be the main hurdle you will need to overcome during Alert Level 3. Documents can be signed remotely provided certain criteria has been met to establish a clients identity and the banks agreement if necessary. Clients will need to have access to a device with a camera. If you have difficulties in arranging remote signing, you should talk to your solicitor as soon as you can.

Some sales and purchase agreements now have additional clauses in the further terms of sale providing for what will happen in relation to settlements and conditions dates if the alert levels change.

If there is no provision in the agreement then you should speak to your solicitor as soon as possible so that any discussions regarding extensions of conditions or deferment of settlement can be held as soon as possible. Both parties should agree to the best approach in the circumstances. This may not be the same approach as someone else. This is a challenging time and the vendor and purchaser should be encouraged to work together to achieve the best outcome for all.

If you have any queries or concerns around an agreement to buy or sell a property during the Covid-19 Alert Level 3 period, please contact our team – email is better right now as we are working remotely.

Emma Boad
Emma Boad

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