Urgent New Zealand Investor alert

New S&P Agreements

We may never know the real reason but the REINZ has just released a new “Plain English” Sale and Purchase agreement.  If you do a search for information on it you will find that REINZ and any lawyer who has been asked to work on it think it’s great.  ALMOST EVERYBODY else hates it.

The pertinent point for us as investors is this:

DO NOT UNDER ANY CIRCUMSTANCES SIGN AN AGREEMENT ON THE NEW FORMS.

I spoke to my solicitor who is one of NZ’s top conveyancing specialists and asked him what he thought of the new forms.

“%#@@ # *))**&   *&&^&  Bull$(*#@_”  was his reply.

Things you need to know.

REINZ are saying that it will be compulsory for agents to use these forms. However the law changes on NOvember 1 mean that licensees can opt out of membership to REINZ locally and therefore not use the forms. Offices have already confirmed that they are doing exactly that because the new forms are so terrible.

The new “simple” forms are 32 pages long and contain the following issues for vendors and buyers .

There are a number of implied warranties in the new form that are so vague they open the door up for litigation.   If a zoning change etc. occurred 3 or 4 years after you sold a property you could be sued.

The wording is so vague in parts that 2 leading barristers I spoke to are rubbing their hands in glee as if these forms ever get used it will open the door to litigation for years.

The purchaser has the right to move settlement without penalty if the vendor has delayed with certain conditions. This is potentially terminal for double settlements or even a vendor who is simply trading up or down.

The first 3 pages have a lot of tick boxes to fill out by the agent.  If they are left blank or filled in wrong they can in some cases cause the vendor or purchaser to have waived certain rights. This won’t be known until it hits court of course.

My solicitor has already told his client base that if they are silly enough to use this form he will charge and additional $1000 for the time required to fix up the $^(*#&$*#&$#)*!.

The hoped for outcome is that this document will never get adopted. Nobody wants it, neither lawyers not agents and certainly not investors so as agents can opt out of being required to use it we should see it ride off into the dark night from whence it came.

I cannot stress enough PLEASE DO NOT USE IT, you can and will get burned.  The potential for you to end up in court in the future is very high!!

And if you are an agent or know one please pass this on and tell them to get onto their lawyers and opt out of this travesty of a document.

Please forgive me if I sound overly emotional about this but it really is a problem when a body that has a high level of “authority” due to it being call a national institute puts out shoddy work that has enormous legal implications for the public.

PLEASE PASS THIS ON TO ANYBODY YOU KNOW WHO MIGHT BE BUYING OR SELLING A PROPERTY!!

Stay Inspired and Stay Safe ~ Dean Letfus @ www.MassiveAction.tv

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