NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In

Advertisement
Advertise with NZME.
Home / Property

Diana Clement: Contracts need scrutiny

Diana Clement
By Diana Clement
Your Money and careers writer for the NZ Herald·NZ Herald·
26 Sep, 2017 06:11 AM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Before signing a sale and purchase agreement, have your lawyer check it over first. Photo / Getty Images

Before signing a sale and purchase agreement, have your lawyer check it over first. Photo / Getty Images

Sale and purchase agreements are incredibly important documents.

They're legally binding contracts between buyer and seller for the sale/purchase of a property.

In theory you could scrawl an agreement to buy a home on the back of a napkin. But you'd be stark raving mad if you signed such an agreement.

As it is, too many buyers just sign on the bottom line of an agreement they've been given without having it checked out by a lawyer.

That is quite astounding for a purchase costing hundreds of thousands if not millions of dollars. If something goes wrong, there aren't too many legal legs to stand on.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

Fortunately, most of the time buyers are presented with the ADLS/REINZ agreement for Sale and Purchase of Real Estate, which is published jointly by the Auckland District Law Society and Real Estate Institute of New Zealand.

The agreement is periodically updated and it's important to ensure that you've been given the latest version (currently, ninth edition 2012 (6)).

"For a standard residential property purchase, using the ADLS/REINZ form is the way to go," says John Stirling, partner at Turner Hopkins. "It is a very even-handed document."

Advertisement
Advertise with NZME.

Nonetheless, buyers shouldn't sign even the standard document without checking with a lawyer. There are various clauses that can be struck out.

The agreement has a long list of optional clauses that can be added.

If, for example, the buyer wants to test for methamphetamine contamination, then a pre-written clause covering this can be added.

There may be conditions related to the sale of the purchaser's property: obtaining finance, solicitor's approval of title, obtaining a building or valuation report, the purchaser's access prior to settlement, a requirement to see body corporate minutes, a confidentially clause or one of many others.

Twenty years ago it was common to be given non-standard sale and purchase agreements that contained draconian clauses.

It's rare, says Stirling, for that to happen these days, although he sometimes comes across clauses drafted by a real estate agent that may not stand up in a court of law.

"We advise the client of the reason why we believe it is not an appropriate form to sign," says Stirling.

Tim Jones, convener of the ADLS Documents and Precedents Committee, says that when the standard ADLS clauses are edited or removed they are intended to show up as strikethrough text, thus highlighting what has been removed.

"However, some parties may create their own documents which look like the ADLS/REINZ standard form but which are not, sometimes with many important clauses protecting the buyer removed. These omitted clauses are difficult to spot even for trained lawyers.

However, lawyers who regularly work with the documents have the best chance of knowing when one has been tampered with."

Advertisement
Advertise with NZME.

This is why buyers and sellers should have a lawyer review even apparently standard sale and purchase agreements before signing.

When it comes to sections, off the plan purchases and new builds, contracts can still use the standard ADLS/REINZ form, but have appropriate clauses added.

"Agreements where the purchaser is looking to buy something yet to be built can be conditional, for example, on the vendor obtaining and getting all the necessary consents required to do the development," says Stirling.

"It might (also) be dependent on finance and sufficient level of sales of the development."

Many developers, however, draft their own agreements which are heavily weighted in their favour should the development not proceed.

If Stirling was drafting an agreement for a developer client he would add specific clauses such as his client's responsibilities to bring the project to market or carrying out the physical work to be able to apply for the titles.

Advertisement
Advertise with NZME.

Despite the bad press sunset clauses sometimes get, they ensure that if the development doesn't go ahead within a certain time period the deal is cancelled and the buyer's deposit returned. If there is no sunset clause, Stirling would recommend that buyers don't sign.

Sometimes he would recommend clients negotiate the clause concerning time for completion.

Too short and the developer might use your deposit to support the finance needed to get the project underway, but cancel the deal later to sell at a higher price. Too long and the purchaser might be waiting years for completion.

It is important to do your due diligence about the developer before signing a contract for something that is yet to be built.

Sometimes he will recommend a client not sign because the developer in question has been involved in a previous project that didn't proceed.

A lot of apartment projects fail because of difficulty getting funding or building costs escalating.

Advertisement
Advertise with NZME.
Save

    Share this article

Latest from Property

Property

'Phenomenally fast' - Agent sells her own house for over $1.8m in just 12 days

Property

Tony Alexander: Four house price drops in a row - why?

Property

Buyers scratching their heads over sale of multi-million-dollar home


Sponsored

Tired of missing out on getting to global summits to help grow your business?

Advertisement
Advertise with NZME.

Latest from Property

'Phenomenally fast' - Agent sells her own house for over $1.8m in just 12 days
Property

'Phenomenally fast' - Agent sells her own house for over $1.8m in just 12 days

Inside knowledge helped her find a buyer in record time.

16 Jul 06:15 PM
Tony Alexander: Four house price drops in a row - why?
Property

Tony Alexander: Four house price drops in a row - why?

16 Jul 06:00 PM
Buyers scratching their heads over sale of multi-million-dollar home
Property

Buyers scratching their heads over sale of multi-million-dollar home

16 Jul 05:38 PM


Tired of missing out on getting to global summits to help grow your business?
Sponsored

Tired of missing out on getting to global summits to help grow your business?

14 Jul 04:48 AM
NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP