1E9Ct5D

have become increasingly popularfor vendors of residential propertiesin recent years, due to high buyerdemand and increasing property prices.However, most properties in NewZealand are still sold by negotiationbetween a vendor and a purchaser,instead of by way of auction or tender.The form of the contractMost contracts for the purchase ofland in New Zealand are based upona standard form contract approved bythe Real Estate Institute of New Zealandand the Auckland District Law Society.This provides both parties with greatercertainty, and serves to reduce legalcosts.Unlike the practice in the UnitedKingdom and many other countries,the contract is entered into from theoutset. However, it is often conditionalon various matters being satisfied bythe purchaser, and sometimes by thevendor.Before becoming committed to aproperty purchase, a buyer should besatisfied with the following matters:(a) the ability to finance the purchase;(b) that there are no legal impedimentsrevealed from the title to the property,including easements and restrictivecovenants which may affect the use ofthe property;(c) that the records held by the localauthority for the property do notreveal any problems;(d) that all necessary consents relevantto the purchase are obtained,particularly OIO consent, if that isrequired; and(e) if there is a lease on the property, thatthe terms of the lease are satisfactory.In certain circumstances, advicefrom other professionals/consultants may be appropriate.For instance:(f) a builder’s report may be requiredto ensure that existing buildingsare sound;(g) a geotechnical report may berequired to ensure that anyearthquake activity has notdestabilised the ground;(h) if the property is being purchasedfor development, the purchaser maywant to undertake due diligenceinvolving reports from planners,architects, geotechnical engineers,surveyors and other professionals;(i) a report from a farm consultantmay be appropriate for ruralpurchases; and(j) an environmental assessmentmay be appropriate in somecircumstances (although this isgenerally of less concern in ‘cleanand green’ NZ).In the case of auction sales, a purchaserwill need to be satisfied with all mattersbefore the date of the auction, becausea successful bidder will be boundto purchase the property from thefall of the hammer. Similarly, beforesubmitting a tender, a purchaser shouldbe satisfied in respect of these matters,although if OIO consent is required, thetender should be conditional on suchconsent being obtained.Where the property is purchased fromthe vendor pursuant to a negotiatedcontract, an offer can be submitted thatis conditional on the purchaser or itssolicitor being satisfied with particularmatters within a specified timeframe.This gives a purchaser the certainty ofknowing that if no issues are found,then they will be able to confirm the8