What do sellers need to know about sale and purchase agreements in NZ?

What Sellers Need to Know About Sale and Purchase Agreements
The sale and purchase agreement is the legal document that makes a property transaction binding.
For sellers, understanding what it contains and what it commits you to is essential, and yet many sellers sign it having only read the price and the settlement date.
Here is what every New Zealand home seller needs to know.

The standard form: ADLS/REINZ
Most residential property transactions in New Zealand use the ADLS/REINZ Agreement for Sale and Purchase of Real Estate. This is a standardised form developed jointly by the Auckland District Law Society and the Real Estate Institute of New Zealand. While the core form is standardised, it contains blank fields that are completed for each transaction, and additional conditions (clauses) can be added by either party.
Your agent will prepare the agreement when a buyer makes an offer. Your lawyer should review it before you sign. Do not sign a sale and purchase agreement without having your lawyer read it first, even if the agent says it is urgent.

The vendor warranties
The agreement contains vendor warranties. These are statements that you, as seller, are making to the buyer about the property. The most important of these is the general warranty that you are not aware of any matter that would materially affect the value of the property or the buyer’s decision to purchase that has not been disclosed.
This warranty is why disclosure matters so much. If you sign this warranty knowing about a significant undisclosed defect, you are creating legal exposure. Your agent and lawyer can assist you with structuring appropriate disclosures so that the warranty can be signed honestly.

Conditions: what they mean for sellers
Most offers in New Zealand include conditions from buyers. Typically subject to finance, a Council LIM, and subject to a building inspection. During the condition period, the contract is in place but not unconditional. The buyer can cancel if their conditions are not satisfied.
As a seller, a conditional offer provides less certainty than an unconditional one. You cannot accept other offers on a conditional property without specific contractual mechanisms (a multi-offer process or a back-up offer provision). You should understand how long the condition period runs and what your agent’s strategy is if the conditions are not satisfied.

Chattels: the inclusion list matters
The chattels schedule lists every item that is included in the sale beyond the real property itself. This typically includes curtains and blinds, light fittings, dishwasher, rangehood, and any other items specifically agreed. It also lists any items that are excluded that a buyer might otherwise expect to remain.
Review the chattels schedule carefully. Items that you intend to take should be specifically excluded. Items that you agreed to include should be listed. Disputes about chattels at settlement are one of the most common and avoidable transaction irritants in New Zealand residential sales.

Settlement date and possession
The settlement date is the day ownership transfers and the buyer pays the balance of the purchase price. Possession is typically given on settlement day, though other arrangements can be negotiated. Ensure the settlement date gives you adequate time to move out, and that you have confirmed your own moving arrangements before agreeing to a settlement date.

The no-surprises principle
The best outcome for sellers in any sale and purchase agreement is a document that contains no surprises at settlement. Everything agreed during negotiation should be clearly documented.
​Everything you are taking or leaving should be listed. Any conditions or special requirements should be in writing. And your lawyer should have reviewed and explained every clause before you signed.
A few hundred dollars in legal advice at this stage is trivial compared to the cost of a settlement dispute, a buyer’s claim for misrepresentation, or a transaction that falls over because of an undocumented misunderstanding.

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If you’re asking what sellers need to know about sale and purchase agreements in New Zealand, Paul Sumich is a Whangarei-based real estate professional who publishes practical guidance for New Zealand home sellers. Find more at paulsumich.co.nz/blog.