Buyer's Guidance Notes

BUYERS GUIDANCE NOTES

Please discuss with your Lawyer any of these matters or other matters which concern you.

Please do discuss them , as the lawyer will not have inspected the property you have .

Common things to point out that often require council permits and may not have are;

• Fireplaces
• Conservatories
• Any building alterations
• Swimming pool fencing
• AND garden sheds , decks , carports or garages on Cross Lease properties
• There are others .........Hopefuly your agent has pointed them out  .

Matters which your Lawyers should attend to on your behalf:

Peruse the agreement for sale and purchase

to make sure that it protects your interests. If necessary (and in complex matters ) they will prepare the agreement for sale and purchase.

Arrange for a detailed Land Titles Office search of the Title to the property together with copies of encumbrances.

The title to the property is registered at the Land Titles Office. The title search is made to find out if there are any encumbrances registered on the title which could adversely affect you. The agreement for sale and purchase provides that any objection to the title to the property must be made within 15 working days of the date of the agreement or before the settlement date (if this is earlier). If objections are not made within this time the right to object is lost.

If authorised by you then they will get a L.I.M.

( Land Information Memorandum ) property search from the local authority to show whether there are any health, building or town planning matters affecting the property, show the zoning of the site, to find out whether there are any arrears of local authority rates, and whether there are any other local authority requirements affecting the site. It is essential that in addition to obtaining this property search you call at the Building Inspectors section of the local authority and inspect the house plans to ensure that what has been built on the property has been built with a permit AND that the work has been inspected and approved by their building inspector to make sure that there are no illegal additions or alterations. This information is not given by the local authority in their L.I.M search. If you do not find out you could end up paying substantial amounts to rectify the problem later, and it could affect the sale of the property in the future.

If required they will assist with your application for finance.

If required, help in arranging extensions of time necessary to enable any finance or sale condition to be satisfied .

If required they will assist with arranging a valuation of the property.

Receive instructions from the lending institution and prepare mortgage documents for your signature.

Discuss with you the best legal vehicle or manner in which title should be registered onto the property

( Trust, Company, Joint Tenancy, or Tenants in Common ) depending on the type of property and your personal circumstances. THIS IS VERY IMPORTANT. Then prepare and forward to the Vendor's Solicitors a transfer of the Title document to be signed by the Vendor.

Prepare Notices of Sale and forward them to the Vendor's Solicitors

so they can be sent to the local authority to give them notice of your ownership of the property.

Get a settlement statement from the Vendor's Solicitors

showing the date to which the Vendor has paid rates, check the apportionment of rates made on that statement, and ensure that the deposit paid by you has been credited as paid on that statement.

Make final arrangements for completion of the purchase of the property

including getting the funds from you required to complete the purchase, getting mortgage moneys from the lenders, and arranging to get the signed transfer, title to the property, and discharges of any existing mortgages, caveats, or charges from the Vendor's Solicitors on the possession date.

Get keys to the property

if required (if you have not made arrangements directly with the Vendor or us ( your Real Estate Agents ) to pick them up from them on the possession date.

Register the transfer of the Title into your name

and forward you a copy of the Title following registration.

Forward the title and registered mortgage to any lender

or hold them in safe custody for you if there is no lender.

Matters which you will should attend to yourselves

Pre settlement inspection

Carry out an inspection of the property (both inside and outside) before the possession date to make sure that the property has not been damaged since you agreed to purchase it, and that any warranties given by the Vendor have been honoured (and any work they have agreed to carry out has been completed). If you discover any problems during such inspection you must notify your Lawyer immediately as well as giving to us details of the costs of fixing the problems.

Make arrangements for home insurance and life insurance

sufficient to satisfy your lender's requirements and to protect you.

Make arrangements for movement of your household contents (including transit insurance),

after discussing and arranging the time of the move with the Vendor, and if you are selling your property, with the purchaser of your property.

Advise the insurance company which insures your furniture of your change of address.

Arrange for connection of gas and electricity.

Contact Telecom

concerning the transfer of your telephone number or arranging a new telephone number.

Obtain mail re-direction cards from New Zealand Post

and advise them of your new address.

Ask the Vendor about the following:

Names of trades people who usually service the house;

To leave the old house plans, Government valuation certificate, spare wallpaper and list of paints used in the property;
The names of your neighbours;
Spare parts of any appliances and guarantee cards for them;
The Vendor's forwarding address;
Bus routes;
Milk delivery and rubbish collection times;
Location of mains for water, gas and electricity.

Ownership entities

Joint Ownership / Tenancy in Common

If there is more than one purchaser and the home registered in your joint names. In that case on the death of either, the property automatically and with little formality passes to the other. This is not a joint family home.

Another ownership option is to register the property in your names as tenants in common in either equal or unequal shares. If you do so your share will not pass on your death to the other property owner, but will pass to the people it is left to in your will. This is desirable for estate planning purposes if you are not forming a trust.

At an additional cost married couples can register their home as a joint family home by making application to the Land Titles Office. A joint family home also enjoys protection from creditors from two years after the application is registered up to a limit of $82,000. If you wish to get this protection sooner, the application must be advertised. If one party is providing all or most of the equity this procedure avoids gift duty on the purchase. Talk to your lawyer , who can arrange an application for you.

Ownership by Company / Trust

It may be that the property should be purchased by a Family Trust if it is to be a residence, you should talk with your Lawyer about the reasons why a Trust may be necessary.

If the property is to be a Rental property then possibly you should purchase it in the name of a Company that in turn is registered as a Qualifying Company ( L.A.Q.C. ) so that any losses from the rental can be best utilised – you will have to discuss this option with your Lawyer or Accountant as soon as possible.

Location of House and Property and Boundaries

There are occasions, especially in older subdivisions, when buildings are not erected entirely within the section, but encroach over boundaries. There are also occasions when fences and hedges which appear to show the boundaries of the property are not in fact located on the legal boundaries. If existing buildings appear close to any boundaries or you have any doubts as to these matters you should compare the title and deposited plan with the property and check with the Building Inspector of the local Council to ensure that the house you intend to buy is properly located on the section which has been described to you, and that the boundaries are where you thought. If you are in doubt a surveyor should be employed to peg the legal boundaries

Cross Lease Titles

If you are purchasing a cross lease title it is absolutely vital that you look at the plan of the buildings (including garage, carport, decks and shed) being purchased (which is shown on the title in the case of modern leases) and make certain that the plan correctly shows the buildings as they now are. The plan will show the buildings as they were at the date when the flats plan was deposited in the Land Titles Office. What you need to check by comparing that plan with the buildings as they now are, is that there have been no alterations which have changed their outside dimensions. If there have been any such changes, or if you are not sure please contact us immediately to ensure that you do not lose your right to object. It can cost a substantial amount to correct the title where the plan does not show what has been built.

Fencing Covenants

If the property is subject to a fencing agreement (but not otherwise) the effect of the fencing agreement is that while the former owner who signed the fencing agreement creating the easement owns a property adjoining yours, they are not liable to meet the costs of erecting or repairing any boundary fence. When they sell the adjoining property the fencing agreement ceases to apply.

Swimmining pool fencing

Local Authority Planning Issues

You must satisfy yourself that any improvements you may wish to make to the house you are purchasing or any non-residential activities intended can be carried out. With cross lease properties additions will not normally be possible without the consent of the other flat owners. If you intend making alterations to the house or erecting a garage or other buildings on the property a building consent must be obtained from the local authority. We recommend that you check with the Planning Officer of the local Authority to make sure that any alterations you have in mind are possible. If you propose any future sub-division of the property the Planning Officer will advise whether it is possible.

Keys

On settlement you are entitled to vacant possession of your house. We recommend that you make arrangements with the vendors to obtain the keys from them on the settlement day. If this is not possible then ask us to assist you.

General and Water Rates

Local body general rates will be apportioned between Vendor and purchaser at the settlement date and details will appear in the statements you will receive before settlement. You should allow for paying your share of the rates from the settlement date to 30 June, as the Vendor may have paid rates up to that date. Your Lawyer will not know how much you have to pay for rates until they receive a statement from the Vendor’s solicitor. Water rates (if any) will be paid by the Vendor up to the date of settlement. A special reading of the water meter will be organised by the Vendor's solicitors for this purpose.

Insurance of House

Unless the lenders are arranging insurance they will also require a copy of an insurance policy or cover note in respect of the property being purchased. The insurance policy must be taken out for the full insurable value of the property. An insurance cover note is a note from the insurance company advising that they hold your property insured. You must advise the insurance company to note on the policy or cover note the interest of the lender as first or second mortgagee. If you are in doubt please show them a copy of this letter.

There are two types of home insurance:

Replacement insurance. Such insurance in essence enables you to rebuild or repair your house if it is damaged without cost to you;
and

Indemnity insurance. Under indemnity policies the insurance company will only pay for the pre-accident value of the house or the part of it which is damaged. This will be considerably less than the cost of rebuilding or repairing you house. You will have to meet payment of the extra cost yourself.
Replacement insurance is the best type of insurance. It also costs more as the insurance company is liable to pay out more money. We will get for you quotations for both replacement insurance and indemnity insurance to enable you to decide which is appropriate for you.

Insurance of Contents

You should also arrange for the insurance of chattels such as carpets, drapes and furniture. If you already have such a policy you should tell your insurance company of your intended change of address and make sure that your chattels are insured during your move. Some insurance companies offer discounts if both the home and contents are insured together. In some cases it may be preferable to cancel your existing home insurance and take out a new policy to get the benefit of such discounts.

Mortgage Repayment Insurance

This form of life insurance provides help for the family where one of you dies while money is still owing on a mortgage. Upon death the proceeds of the policy will be used to pay the whole or a part of the mortgage debt. This type of insurance is desirable especially for younger couples. If you are purchasing your property with the aid of a mortgage from a lending institution, your mortgagee may lend you a further sum to cover the single premium payable under a Mortgage Repayment Insurance policy. Alternatively, you may pay the premium yourself.

Telephone and Power Connections

To make sure that you do not lose the benefit of an existing telephone connection you should discuss having the connection transferred to you both with the Vendor and Telecom. Taking over the existing telephone connection will be cheaper than having the telephone disconnected and then re-connected. If the telephone is disconnected, you may have a delay in getting a new connection. You should also make sure that the electricity account and any gas or oil accounts are transferred into your name and meters read as appropriate on the date of possession. For an extra fee we will attend to these matters for you.

Stamp Duty

Stamp duly has been abolished for all properties.