Important COVID Update
Read Here
COVID

Level 4

Summary

  • Most banks and many lawyers, conveyancers and real estate agents are working remotely, and this may cause delays.
  • Talk to your real estate agent and lawyer or conveyancer about what to do if you’re in the middle of a real estate transaction.
  • The Real Estate Authority (REA) recommends that you and the other party defer settlement until both the buyer and the seller are at alert level 3 or lower.
  • During alert level 4, buyers cannot move into new properties and sellers cannot move out of their properties.
  • Sellers who have received an unconditional offer / Buyers who have made an unconditional offer

    Where possible, the Real Estate Authority (REA) recommends that both parties agree to delay settlement until alert level 3.

    If there is a clause in your sale and purchase agreement that addresses how settlement should occur if the alert level changes, talk to your lawyer or conveyancer and your agent about the best approach for your transaction.

    REA recommends that settlements are deferred for at least 10 days after alert level 3 begins. Be aware that if all settlements are deferred for the default 10 days, it may be difficult to find a moving company to help the settlement process. Consider choosing a longer period.

    During alert level 4, buyers cannot move into a property because only movement in order to access essential services is allowed. It may be possible for settlement to go ahead if it doesn’t involve people moving.

    Here are examples of compromises that could allow settlement to take place during alert level 4:

    • The seller stays at the property on a rental basis.
    • Both parties agree to share any late settlement interest penalty.
    • The seller leaves money in the sale for later payment.

    At alert level 4, LINZ, all banks and many lawyers and conveyancers are working remotely, so it’s likely there will be delays in service.

    Pre-settlement inspections cannot take place at alert level 4. REA recommends that pre-settlement inspections are delayed until alert level 3. Pre-settlement inspections may be able to take place by video or similar, however both parties should seek legal advice about the risks of a video inspection. This type of inspection may not pick up issues you would see if you were physically inspecting the house.

    Be aware that the buyer’s situation may be uncertain. If the buyer’s purchase was conditional on selling their own house, they might not be able to settle on their own transaction if they can’t physically move out of their house. Be considerate of the circumstances and needs of the buyer.

    Sellers who have received a conditional offer

    We recommend that you talk to your lawyer or conveyancer and your agent and agree with the buyer to extend the conditional period until alert level 3.

    During alert level 4, your buyer may not be able to access the services they need to fulfil their conditions, for example, local councils may not be able to provide a LIM and property inspectors will not be able to visit the property to inspect it. Also, you may not be able to fulfil conditions the buyer has requested.

    Some law firms and agents are working remotely, but there may be delays in service.