Alert Level 3: a breath of life back into the property market?

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The loosening of restrictions under Alert Level 3 means, subject to certain conditions, the necessary steps to complete property transactions can now start to take place.

Can property settlements take place under Alert Level 3?

The Ministry of Business, Innovation and Employment have advised that settlements are allowed to happen. Many parties to existing agreements will have already agreed on a settlement date in Level 2. These dates can now either stay the same (as a fall back position) or be negotiated between the parties to occur in Level 3. However, you need to make sure of the following before locking in a new settlement date with your vendor or purchaser:

  1. Ensure you are able to book a removal company (they are allowed to work under level 3 but may be busy) and that they have a plan in place to complete the move safely in line with current guidelines.
  2. Physical distancing is still required. Can you complete your appointment with your legal team and execute your loan and settlement documents safely and remotely? We can help with this; get in touch with your solicitor to organise how this will be set up to work for your particular situation.
  3. Know how you will complete the final pre-settlement inspection safely and with the appropriate physical distancing in place.

Your lawyer can discuss a plan and how the process can work in your particular situation with you.

Can I view a property to purchase during Level 3?

The Real Estate Institute of New Zealand has confirmed agents are allowed to conduct viewings by appointment only in Level 3, provided they have appropriate safety plans in place. Get in touch with the agent in respect of the listing to discuss what their plan is for viewing properties.

Should I sign a Sale and Purchase Agreement during Level 3?

We always recommend discussing any agreements with your lawyer before signing up to a purchase. The COVID-19 situation makes this even more important. While we are all hoping that the Alert Levels will continue to go down, the conditions in your agreement need to future proof you for the ever-changing circumstances and suit your personal situation. For example, we may need to:

  • provide for longer time frames for you to organise building inspections, complete your finance applications (including Kiwisaver applications), and obtain a LIM report, as there is likely to be a rush on these services as the market picks up again.
  • provide for settlement dates that depend on Alert levels, and
  • ensure we add coverage so you can get out of the agreement if your personal circumstances change due to the economic fallout from COVID-19.

Our property team is here to help you work through any transaction. We are able to discuss your needs with you on the phone or through video chat, access all of our files electronically through our digital office and witness the signing of various documents through live video recording, to help you keep moving in a safe way.

Our thanks to Rosie Allen for writing this article.

Every effort has been made to ensure accuracy in this newsletter. However, the items are necessarily generalised and readers are urged to seek specific advice on particular matters and not rely solely on this text.