Property law and the list of legal documents needed when buying or selling a house seems to get longer each year.
Here we have compiled a check list of examples, for both buyers and sellers, of some of the legal documents, from various organisations, that you should be aware of. We have included links to more information about them, but there will be more depending on your geographical location, land type, zoning, property type and age of building for example.
Whether you are using a real estate agent, selling privately, buying or selling, some or many of these will be part of the picture.
Take a look at the process of buying & selling a house first.
DIY Property Law Risky
If buying or selling a house privately and you want to know how to navigate property law yourself, beware, it's a job that is not for the faint-hearted and the consequences of making mistakes can be dire - with little come back.
Property lawyers are trained to acquire appropriate property reports and legal documents from the right sources at the right part of the process. They interpret, manage issues that arise, liaise with other lawyers, banks, valuers, building inspectors and advise buyers and sellers. They have the legal nous you need to add, amend or delete clauses on sale and purchase agreements.
Legal advice comes at a cost but the cost of not using a lawyer can be far greater. Rule of thumb is to always use a property lawyer. Find out the difference between a property lawyer and a conveyancer.
Front foot property checks needed for buying and selling
Did you know that properties built prior to 1938 require an electrical Warrant of Fitness for a buyer to get insurance? Get it sorted.
Getting a building inspection report of the structural integrity of a property is one of the most common conditions included in a Sale and Purchase Agreement.
If you are selling a property, find out what is required to pass a building inspection and use this as your check list to make sure everything is signed off, consented, legal and completed. Being unprepared or uninformed can quickly lose you a good buyer at the point of sale or or have dire consequences if you're buying a house.
Legal documents you might encounter
A word of warning, make sure the building inspection report is posted to all who will be relying on its accuracy. If you are the buyer, it should be addressed to you at your address, rather than relying on someone else's copy. That way you will have it as a comeback later on if you need it. From the seller's point of view, you will know that the company did advise the buyer.
- LIM – A Land Information Memorandum held by your local authority tells you about the property so you can understand any risks.
- PIM – The Ministry of Business, Innovation and Employment - Building Performance website provides extensive information about PIMs.
- Survey Plans (Title) show legal boundaries, area and dimensions, including covenants and easements.
- A Code of Compliance (COC) will be required for any unfinished renovations, extensions or repairs. If you don’t have this, you risk the deal falling over.
- An Electrical Code of Compliance is required for any new electrical work installed into a home.
- To get house insurance, Electrical Inspections Certificates are often required for properties built pre-1938. If a buyer can't get insurance, they are likely to pull the pin. Best to get it done first.
The number and range of reports needed has increased with the advent of the Christchurch earthquakes, meth contamination in houses, and leaky homes. Be prepared for the things buyers might request.
- Moisture Reports can be sought to satisfy any doubts about the cladding or moisture issues.
- If in doubt about structural integrity of a house you're considering purchasing, visit HOBANZ for advice, they are the specialists in this field.
- Methamphetamine testing reports are now being requested by buyers and sellers (we are finding out more about this).
- Property Conveyance reports are explained on the Property Law Section of the NZ Law Society website.
- Cross lease titles and Unit Titles are explained here for buyers and sellers to better understand the difference.
Architectural drawings or other proof is needed if a house is being marketed as ‘architecturally designed’. If your house has not been designed by a registered architect, it is not deemed architecturally designed for marketing and advertising purposes as determined by the NZ Real Estate Authority.
- GST - The Inland Revenue Department has information explaining whether or not this will apply to you.
- Pre-settlement Inspections of the property are done just prior to settlement to ensure all matters are attended to as per your Sale and Purchase Agreement clauses. This includes the chattels.
- Make sure you understand the Sale and Purchase Agreement - the Real Estate Authority has a good explanation. Get any conditions or clauses signed off by your lawyer.
- If selling a unit in a unit title, Tenancy Services provides buyers with advice and expectations for buying this type of property while sellers should understand what will be asked of them.
- HOBANZ also has guides on Unit Titles for buyers and the Real Estate Authority has a good PDF on this matter.
This is not an exhaustive list but will primarily cover most real estate property transactions.
Thinking about selling your house? - Read this Smarter Selling Kit to get you started.
For professional advice about all things to do with property law, talk to your lawyer, or you can independently find a property lawyer here.
Do you really have the skills?
Selling or buying real estate is a legal process and understanding legal documentation and other reports requires a comprehensive overview - when you see it all in one place as on this page it is a heads up on the scale of the task.
In real estate, the consequences can be far reaching if things go wrong, so we advise you to seek the advice of a property lawyer, even if you are using a trained and licensed real estate agent.
If you are ready to start looking for a good real estate agent, the safest way is to use this free real estate vetting service. They've been around for almost a decade so they know what to look for and it's 100% free. Request a shortlist of real estate agents first.
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You might also like:
- Step by step process of selling a house
- How to negotiate the minefield of buying a house
- Quick access to property titles, plans and cadastral maps