- Residential conveyancing
- Commercial conveyancing
- Commercial leases
- Farm conveyancing
- Horticultural leases
- Resolution of title issues
- Retirement villages
We can help you achieve peace of mind and confidence whether you’re buying or selling a property, subdividing, building, leasing or have a ‘leaky home’ problem. Getting legal advice today can save you time and money down the track, dealing with problems you didn’t see coming.
- What's involved in a conveyancing transaction?
- When do I need to arrange insurance ?
- How do I know if my property has archaeological features?
- Should I be concerned about earthquake strengthening?
- Where can I find information about leaky homes?
- Do I need to get a LIM?
- What is a cross lease title?
What’s involved in a conveyancing transaction?
The term “conveyancing” describes the legal process by which a person becomes the registered and lawful owner of a property. A conveyancing transaction involves a process which begins with the Agreement for Sale and Purchase and continues through to the ultimate registration of ownership of the property, and the reconciliation of finances and payments.
Conveyancing is a complex process requiring extensive knowledge, skill and attention to detail on the part of the conveyancer. There are many elements involved in the conveyancing transaction and delays are possible at any stage. A typical conveyance includes:
● Title searches
● Checking for encumbrances and restrictions on the property
● Checking that insurance is available for the property
● Preparation of legal documents
● Ensuring any special conditions are met
● Financing arrangements
● Making sure rates are paid by the appropriate party
● Arranging for payment of fees and charges
● Registration of ownership on the title.
We are equipped with comprehensive legal skills to advise on all aspects of your property transaction and are backed by stringent safeguards administered by the NZ Law Society.
Important Advice Regarding Household Insurance
As from July 2013 New Zealand Insurers changed the basis upon which they offer cover for residential dwellings.
Replacement Insurance is no Longer Available
The policy has changed from a “replacement cover” based primarily on size of the dwelling to a “rebuild cost cover” based on a “total sum insured” figure.
The idea of “total sum insured” is that this will be the maximum amount that an insurance company will pay out on any claim. No longer are you able to arrange cover based on replacement value
Before insuring a property the insurers will require a rebuild cost to be given to them by the person seeking insurance. The insurance agent or broker will not undertake the calculation of the sum to be insured for you.
How Do I Calculate the Rebuild Cost?
You can use an online calculator to work out the cost to rebuild on your property. It has been suggested to us that NZI has the best online calculator and that you can use this calculator regardless of whether you are insured with NZI or another company.
You will require specific details to calculate the rebuild value. These include age of buildings, floor area, standard and type of materials used, and standard of construction. It is important to factor in the costs of demolition and removal of the existing dwelling. Other factors that may influence the costs are geological conditions, steepness and accessibility of the site engineering costs and building covenants. Retaining walls, driveways, tennis courts, swimming pools and jetties/berths (but to name a few) will also be relevant and subject to excesses and maximum cover.
A more conservative approach would be to obtain a registered valuer’s report to calculate the rebuild cost cover. If the value of the improvements is in excess of $2.5 million a registered valuation is mandatory.
Unavailability of Insurance – Beware of Letting out Your House
Insurers are also refusing to insure certain types or only insuring them with increased premiums. Types of property affected may include holiday homes or indeed any home that is “let” for more than 2 weeks in a year. It may also include houses that are otherwise unoccupied for substantial periods.
Another issue is that insurers such as Vero are classifying property as having “commercial use” if they are let out for as little as two weeks per year. In such situations the properties will again attract higher premiums and excesses.
If the insurer finds that any underinsurance is deliberate this could be regarded as material non discourse and could lead to the policy becoming void.
What this means for purchasing a property
Ensure that you have done your homework before signing an agreement. Additional clauses may be needed and it is too late to add these in once the agreement is signed. If arranging finance, lenders require the property to be insured. It will be important to ensure insurance is satisfactory to the Bank before declaring any contract unconditional as to finance. See your lawyer before signing anything.
Archaeological Sites/Property Features
The Historic Places Act 1993 (“the Act”) protects all archaeological sites, whether recorded or not, from damage and destruction. Under section 2 of the Act, an archaeological site is defined as a place associated with pre-1900 human activity, where there may be evidence relating to the history of New Zealand.
Might my development be affected by the Act?
The Act contains an authority process for any person wishing to do work that may affect an archaeological site. Section 10 of the Act directs that an authority is required from the Historic Places Trust if there is “reasonable cause” to suspect an archaeological site may be modified, damaged or destroyed in the course of any activity.
It should be noted that an authority is required whether or not:
● the archaeological site is recorded;
● the land on which an archaeological site may be present is designated; or
● a resource or building consent has been granted or the activity is permitted under the District or Regional Plan.
Generally, although not always, a Land Information Memorandum (LIM) obtained from the Local Council will record archaeological sites known to the Council and is a good way to find out more about the likely presence of such sites.
What about costs?
All costs associated with an archaeological authority and /or subsequent investigation is at the cost of the applicant.
Heritage NZ does not charge for an authority application, however there will be costs associated with getting an archaeologist to undertake an assessment and subsequent investigation (if appropriate).
How do I find out more?
See www.heritage.org or phone them on 07 5781229.
If you are looking at purchasing a property that may contain an archaeological site, you must seek archaeological advice before proceeding with the purchase. A number of private archaeological consultants work in the Bay of Plenty. See nzarchaeology.org.nz for a list of consultants.
The Building Act 2004 requires Councils around the country to assess certain buildings, including certain multi residence buildings, for earthquake risk.
Older buildings are likely to be a higher risk. A high risk assessment could mean that the building has to be strengthened within five years. This can be a significant cost to owners.
You should enquire to see whether Council have assessed the building to decide if this is going to be an issue for you. If Council have not yet made an assessment it would be prudent for you to consult an expert, usually a Consulting Engineer, to decide if the building is likely to require strengthening.
Following the earthquakes in Canterbury, and now Central New Zealand, this is a matter that has come to prominence. In some cases the cost of strengthening buildings is likely to be uneconomic and a high risk assessment could result in significantly reduced building value.
There are certain styles of construction and types of material that are susceptible to Leaky Building Syndrome.The Consumer build website, which is a collaboration between the Department of Building & Housing and the Consumer Institute, has some useful tips about some of the red flags for leaky buildings when buying a house, at their website:
We advise all clients buying to obtain a building report prepared by a qualified professional – paying particular attention to leaks and dampness. We also recommend that you obtain a LIM and check with Council to see whether Council had, at the time the building was certified, delegated their duties in respect of building inspection to an independent certifier. If this is the case, and there are subsequent problems with the property, including weather tightness issues, you may be limited or prevented from suing Council.
When do I have to order a LIM by, and how much will it cost?
If your Agreement is subject to you approving a LIM, the standard agreement provides that you have 5 working days from the date of the Agreement to order the LIM and 15 working days from the date of the Agreement to advise your approval, or otherwise, of the LIM.
In Tauranga, it takes up to 10 working days to obtain a LIM from Council, so ordering the LIM is a priority once you have signed the Agreement.
You can request the LIM from Council yourself, or request that your lawyer obtain a LIM on your behalf. The price of a LIM varies from Council to Council. At Tauranga City Council a standard residential 10 day LIM costs $219.00.
What is a LIM?
A LIM is a report that contains all relevant information the Council knows about a property or section.
- Any special feature of the land known to Council including the downhill movement, gradual sinking or wearing away of any land, the falling of rock or earth, flooding of any type and possible contamination or hazardous substances;
- Information the Council holds on private and public stormwater and sewerage drains;
- Rates information;
- Any consents, notices, orders or requisitions affecting the land or buildings;
- District Plan classifications that relate to the land or buildings;
- Any other classifications on the land or buildings notified to the Council by network utility operators in relation to the Building Act 2004. Any other information the Council deems relevant.
It does not include:
Notification to you about any consents or planned activities on neighbouring or other properties in the vicinity. Council records for building permits and consents may not reflect the situation on site as Council records do not show work or activities for which no consents have been obtained. If there are buildings on the property or alterations have been done for which there is no record of a building consent in the LIM, you will need to let your solicitors know so they can raise this with the vendor’s solicitor.
Why do I need a LIM?
Legal decisions have indicated that where the purchaser of a property which has suffered weather tightness issues did not obtain a LIM, the purchaser could be found to have contributed to any loss they have suffered. Accordingly any recovery options could be significantly reduced or unavailable if the LIM would have revealed weather tightness issues at the time of purchase. It is now becoming common practice for lenders to require a LIM to be obtained. If a LIM is not obtained we may have to give a qualified solicitor’s certificate to your lender which could mean difficulties or delays with financing and additional costs if settlement was delayed.
Should I get a Builder’s Report?
We do not believe a LIM on its own provides the level of protection appropriate for a purchaser. It is important that the details on the LIM are compared with the actual building being purchased. If you have the skills then you may be able to attend to this yourself but we would recommend the engagement of a suitably qualified building inspector.
Cross Lease Titles
Cross Lease titles originally arose as a device to get around Council rules that would allow more than one dwelling on a certain sized parcel of land but would not allow subdivision of that land. They created a de facto subdivision by making two or more people owners of the land and then granting a ‘cross lease’ between the owners in respect of the houses built on the land. Over the years some difficulties have arisen with these titles.
Earlier cross leases did not specify exclusive areas around the houses for the exclusive use of those owners. When buildings are altered in a way that extends the external dimensions the cross lease title can become defective. This is a common area of misunderstanding.
Obtaining a building consent for the alterations is not enough. With a cross lease title you may also need to rectify the title which is a costly and time consuming exercise involving all the units comprising the cross lease arrangement. It is very important to carefully check all the Plans showing the buildings on the property (“Flats Plan”) to see if the plan and physical dimensions of the actual buildings are different or if other buildings are not shown on the Flats Plan.
Cross leases generally contain the following terms:
(a) Owners are responsible for a specific share eg half or third share of any costs of maintenance of the common area;
(b) Obligations to paint the exterior of the building in accordance with an approved colour scheme;
(c) Use is restricted to residential purposes;
(d) Limitations as to keeping of pets that may be a nuisance to other owners;
(e) Restrictions on any structural alterations, or erecting any additional building or fences without obtaining the other owner’s consent;
(f) Insurance obligations. Insurance issues are becoming more significant with all buildings.
Cross leases, although a perfectly valid and acceptable form of title, are less preferred. There have been suggestions that legislation be passed requiring all cross lease titles to be converted, though this has not progressed beyond a suggestion. We recommend being prepared to complete a regularisation of the title and discuss the opportunity to do so at the time of any proposed cross lease purchase.
This should include discussing the attitude of other cross lease owners affected before purchase. Our experience is that co-owning in these circumstances can be difficult. Alterations to buildings on a Cross Lease Title undertaken by a previous owner, or by existing owners, will cause Title problems in time that are costly to remedy.
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Housing NZ Kiwisaver Deposit Subsidy http://www.hnzc.co.nz/buying-a-house/KiwiSaver-helping-you-into-home-ownership/kiwisaver-homestart-grant/homestart-faq/?searchterm=kiwisaver deposit subsidy FAQ