Selwyn Times: September 12, 2017

2
[Edition datE]
Getting what
you paid for on
settlement day
13
In the movies, the day someone gets
the keys to their newly bought home is
portrayed as a golden, stress-free time. The
reality can be rather different, especially
if you find your dream home has turned
into something akin to Nightmare On
Elm Street since you agreed to buy it.
“The trick to a stress-free settlement
is to do as much as you can in advance,
starting with when you’re signing the sale
and purchase agreement,” advises Kevin
Lampen-Smith, chief executive of the
Real Estate Agents Authority (REAA).
“The sale and purchase agreement is the
legally-binding contract agreed between
you and the seller that details the property,
the conditions of sale and the price.
Make sure that there is an agreed list of
chattels, with notes as to their condition,
in this agreement. If the property is full of
rubbish, and you want it gone before you
take possession, make that a condition of
the sale. If there are holes in the fence that
the seller has promised to fix, get that in
writing on the agreement: don’t rely on
verbal assurances that something will be
done prior to settlement. It’s far better
to get all these niggly details sorted out
before you sign the agreement than face
protracted battles down the track.”
As a buyer, you are generally entitled to
one opportunity to inspect the property
before settlement day. If the property has
sitting tenants, ask your lawyer to ensure
there is a ‘final inspection’ clause inserted
in the sale and purchase agreement before
you sign it. This inspection is to make
sure that it is in the same or better order
it was when you viewed it and agreed to
the sale. It is not designed to give you the
chance to uncover new defects, or to give
a rental agent the chance to appraise the
place’s value.
“A seller does not have to accommodate
any extra requests to visit the property
prior to settlement,” Lampen-Smith says.
“Remember that the seller may have a
lot on their plate; making the property
available so your interior decorator can
measure up for new curtains is unlikely
to be a high priority.”
Your real estate agent will usually
arrange the inspection with the seller,
and accompany you to the property. Most
experts recommend that this inspection
takes place around 24 hours before
settlement day so there are no hold-ups
to the transfer of funds and ownership.
When you come to inspect the property,
everything should be as it was when you
decided to purchase it (as reflected by the
sale and purchase agreement). Lampen-
Smith says you can expect chattels to be in
a reasonable working order unless it has
been agreed and documented otherwise.
You cannot complain to the seller that
the oven isn’t clean enough, but you can
raise a complaint if it is missing, or it is
a different model to the one cited in the
agreement. Don’t forget to check that
garage door openers and pool covers are
in situ, or that locks work properly.
If there is a problem, the REAA says
you should speak to the real estate agent
and your lawyer in the first instance. They
can help you negotiate with the seller to
remedy any issues, such as a newly broken
window or missing keys. Your lawyer
should work with the seller’s lawyer to
reach a satisfactory solution, such as
getting the seller to make any necessary
repairs, or to deduct any costs from the
eventual settlement.
Making the final inspection 24 hours
before settlement is due gives you and the
seller time to reach an agreement over
anything outstanding. This is important,
because if you do not complete settlement
on the due date and the seller can
demonstrate that they were able and
willing to complete their side of the
settlement, then you will be liable for
interest on any portion of the purchase
price that is unpaid. The seller does not
need to give you access to the property
while any amount remains outstanding.
“Like any property transaction, success
often depends on doing things right at the
start,” Lampen-Smith says.
“Get the details right at the beginning
and you’ve got a greater chance of a happy
ending.”
For independent advice on buying or
selling property, check out www.reaa.
govt.nz.
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