The Eleventh Edition of the REINZ/ADSL Agreement for sale and purchase of real estate (“Agreement”) has come into force as we approach the two-year anniversary of life under COVID-19 in New Zealand. It has developed to reflect the changing legislations and evolving industry practices. While many of the changes are minor, one of the changes are particularly noteworthy – the new Compensation Claim contained in Clause 10 of the Agreement.
The New Compensation Clause is amended to ensure a purchaser can only raise one justified claim and appears to cut out frivolous claims. Shortly put, it is aimed to stop purchasers raising little claims over light bulbs or a torn curtain.
As a purchaser, you need to understand that it is more difficult and costly to raise a compensation claim. The process is now twofold. First you must be eligible to raise the claim, and then comes the second issue of quantum.. We would recommend purchasers conduct final inspections at least 4 working days before settlement due to new timing provisions.
As a vendor, you need to be careful with the new deeming provision under clause 10.7 which states that if you fail to give notice to the purchaser within 3 working days after being served the compensation, you are deemed to accept the compensation claim raised by the purchaser.
Many people perceive conveyancing as a cheap transaction to be done by the most cost-efficient lawyer. However, where disputes over chattels or the property in general can lead to an expensive battle, and you are most likely purchasing or selling your most expensive asset, we would highly recommend you get quality advice during this important time in your life.
For more information on the latest agreement and any general enquiries, please feel free to contact Queen City Law’s capable Property Team
We have taken care to ensure that the information given is accurate, however it is intended for general guidance only and it should not be relied upon in individual cases. Professional advice should always be sought before any decision or action is taken.