COVID-19 Lockdown: Property settlements are proceeding

April 6, 2020

in COVID-19,Property

Most property settlements are still able to proceed in circumstances where physical possession or movement of people is not required, such as where the settlement involves vacant land, a tenanted property or where the vendor has already vacated the property and the purchaser does not need to move in straight away.

“Moving house is not an essential service” is the current advice from the New Zealand Law Society’s Property Law Section Chair, Duncan Terris who points out that “COVID-19 Level 4 means the only permitted activity is that of essential businesses which are primarily related to the necessities of sustaining life…. it is now clear that any property settlements that require physical movement of people is now for all practical purposes ‘illegal’.”

For all settlements that require vendors and/or purchasers to move, the NZLS Property Law Section recommends that vendors and purchasers agree to defer settlement to the 10th working day after the Government reduces the Covid-19 Level to Level 2 or below and that neither party will have a claim against the other in relation to this deferral.

It is important to note that this is just a recommendation, not a right. Any changes to the terms of sale must be by mutual agreement between the parties. There are a variety of circumstances and factors that will need to be considered. However, vendors and purchasers are strongly encouraged to reach agreement on an approach that suits their particular situation rather risk a lengthy and costly dispute.

An important consideration for both parties will be the role that the banks need to play in any property settlement. The processing time for banks has increased dramatically so this will need to be taken into account when setting dates for finance conditions and settlement. Also, close attention to loan offer expiry dates will be important as the banks may reassess the availability of funding.

If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:

Fahra Manning
09 353 6678

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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