The loosening of restrictions under Alert Level 3 in 2021 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 Government have advised that settlements are allowed to happen in Level 3, but travel through a region in Alert Level 4 (i.e. Auckland at the current time) is not permitted. For Northlanders, this means that for now, you can only complete your move if you are moving to a property within Northland. The Government advises delaying settlements until Alert Level 2 where possible.
Changing the settlement date
You’ll need to check if your agreement has a COVID clause in it. Depending on the wording of the clause, it will generally allow for an extension of the settlement date depending on the alert level that your region is currently exposed to. If you review your agreement and identify a COVID clause, we suggest that you speak with your lawyer to understand what this clause will entitle you do. If you find that there is no COVID clause in the agreement, then you will need to speak with your lawyer to negotiate the inclusion of such a clause with the lawyer for the other party.
It’s important to make sure of the following before locking in a new settlement date with the vendor/purchaser:
- 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. If you use a moving company to move in and out of an Alert Level 3 region, the movers will need to apply for an exemption from the Ministry of Business, Innovation and Employment.
- 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.
- 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?
Open homes and auctions cannot take place in person, but they can happen remotely. You may not travel to other regions to view a property.
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 inclusion of a COVID clause and any conditions needs 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.
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.
Every effort has been made to ensure accuracy in this article. However, the items are necessarily generalised and readers are urged to seek specific advice on particular matters and not rely solely on this text.