Whether you’re looking to buy a house, bare land, or build, there is a lot to consider when purchasing residential property in New Zealand, even before you’ve entered into an agreement or gone to auction. We recommend engaging with legal experts like Parry Field Lawyers at the beginning of your house-hunting journey. We are able to support and advise you at every step of the process.
Why do I need a solicitor?
In New Zealand, all property transactions need to take place through a solicitor or conveyancing professional, as they have special authority to record changes to the legal ownership of properties. Solicitors can also help make sure the further terms in the agreement meet your needs, advise you on the contents of legal documents – such as the property’s title or your loan documents – and assist with navigating any complications that may arise.
When in my house-hunting journey should I engage a solicitor or conveyancing professional?
It is best to engage a solicitor before you sign anything, as this allows the solicitor to review the Sale and Purchase Agreement and make sure the clauses suit your needs. For example, often purchasers would like to make the agreement conditional on matters such as finance, title, insurance, Land Information Memorandum (“LIM”) report, EQC, and building report. Your solicitor can talk you through what these conditions mean, along with advising on any additional conditions the vendor has already included in the agreement.
When should a purchaser engage a solicitor or legal executive when attending an auction?
Engaging a solicitor as early as possible before you attend an auction is important. If you do win at auction, you are bound to complete the purchase of the property (unless you have entered a side agreement with the vendor that says otherwise). This means before attending an auction, you must be confident with all aspects of the property. You must have completed all of your due diligence on the property beforehand and have your finance in place before bidding at auction. This is different to making an offer, where you are able to complete your due diligence within the timeframe agreed upon in the conditions of the agreement.
What costs would we (the client) incur?
Legal fees will depend on the type of agreement you are entering into and how your purchase is structured (e.g. whether you are purchasing as an individual or a family trust). Please feel free to get in touch with Parry Field Lawyers for a fee estimate based on your circumstances. There are various costs in addition to legal fees that you need to consider when purchasing a property, including:
- Ordering a LIM Report. This depends on the region the property you are looking to purchase is within, although they tend to be around $300 – you may wish to check which region your property is in and check the Council website to find out the exact costs. Please note, the Council do require time (generally up to 10 working days) to process a LIM application and therefore this needs to be considered when making an offer / choosing to attend an auction.
- Building Report. This is something you are to arrange independent of your solicitor from a suitably qualified tradesperson – if you wish to obtain one.
- Costs incurred when arranging finance and insurance.
- Any other costs you consider are necessary in order to be comfortable with the property.
This is my first home – can we use KiwiSaver towards purchasing a property?
Yes, KiwiSaver can be used provided it is your first main home (i.e. you will reside in the property) and you meet particular requirements (e.g. having had KiwiSaver for at least three years). We suggest asking for pre-approval from your KiwiSaver provider to give you more certainty as to whether you are eligible to withdraw your KiwiSaver funds. KiwiSaver funds can be used towards the deposit or towards settlement (the day the ownership of the property changes hands). If you wish to use your KiwiSaver funds towards the deposit, you will need to complete the KiwiSaver First Home Withdrawal application (which can be obtained online) as soon as possible. This is because your KiwiSaver provider may take up to 10–15 working days to process your application (and potentially longer if they require further information). Please note, KiwiSaver funds cannot be used towards the deposit for an auction.
The information contained in this outline is of a general nature, should only be used as a guide and does not amount to legal advice. It should not be used or relied upon as a substitute for detailed advice or as a basis for formulating decisions. Special considerations apply to individual fact situations. Before acting, clients should consult their Parry Field Lawyer.
