What happens with Retrofit Insulation Loans when selling your property?

October 25, 2017

in Property

The use of Council loans to assist with insulation through the Retrofit Your Home Programme has lead to increasing issues arising upon sale of the property around who is responsible for the outstanding balance of the loan at the time of the sale.

Under the arrangements with Council, increased rates are payable during the period of the loan until it is repaid. This becomes an issue on sale when the apportionment of rates between purchaser and vendor is undertaken.

The question of disclosure of the existence of the Retrofit Loan is certainly an obligation of the vendor at the time of sale and it should be recorded on the LIM report provided by the Council.

Nevertheless, the commonly accepted position is that from a contractual point of view the Vendor remains liable for the payment of the balance of any Retrofit Loan at the time of sale pursuant to the existing standard warranties and conditions in the REINZ ADLS contract.

Accordingly if the intention is to pass over the obligation for payment of the balance of the loan to the Purchaser (new owner) then a specific clause should be included in the Agreement for Sale and Purchase.

Paul Farry
09 353 6671 or 09 379 0055


The information contained in this publication is intended as a guide only. It does not constitute legal advice and should not be relied upon as such.  Professional advice should be sought before applying any of the information to particular circumstances.  While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain.

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