Property Settlements During State Of Emergency
There is a high level of uncertainty about Property Settlements due to occur during the current level 4 lockdown.
By now everyone will be familiar with the aim of the level 4 protocols which is designed to reduce movement of people, social interaction and spread of the Covid-19 virus.
Acknowledging that this is an aim New Zealander’s will all support, the New Zealand Government requirement under level 4 is that only permitted activity are essential businesses that sustain the necessities of life can continue to operate.
Accordingly, the physical movement and interaction of people that would occur during the process of moving in and out of houses is a “no go.” Removal companies are not operating and the action of moving from one suburb to another or one city to another would likely involve numerous counterproductive personal interactions.
The New Zealand Law Society, Property Law Section and Auckland District Law Society have recognised this issue and advised lawyers to follow new protocols until level 4 restrictions are removed:
- Lawyers must of course consult with their clients and explain the legal realities and how the delay in settlement can be managed to protect their legal rights under the existing contract.
- Lawyers should then negotiate in good faith with the legal advisor on the other side of the sale and purchase contract to arrange deferral of the settlement date.
- There is a recommended clause to be used to vary the contract as follows:
“The parties agree that settlement is hereby deferred to the 10th working day after the Government reduces the Covid-19 level 4 to level 2 or below, or to such other date as may be mutually agreed. For the sake of clarity neither party will have any claim against the other in relation to this deferral.”
Turner Hopkins fully supports this arrangement to reduce movement and personal interaction whilst processing this integrity of the agreed contractual relationship between the parties.
Settlements that do not involve movement of people are still continuing where the contract relates to:
- The sale and purchase of vacant land.
- The sale and purchase of property that is already vacant noting that the purchaser can take title and legal ownership, but moving in/taking possession will need to be delayed.
- The sale and possession of vacant commercial properties – again taking possession will be delayed.
- Sale / transmission of the property in a deceased estate with deferred possession.
- Refinancing – change of Banks – no people movement.
- Mortgaging or granting other securities – no people movement.
- Transfer of property to Family Trust – no people movement.
- Sale and purchase of tenanted investment property – no people movement.
Turner Hopkins is available to assist you with all aspects of your property transaction both residential and commercial.
Please contact our expert Property team:
|Phil Shannon||021 485 firstname.lastname@example.org|
|John Sterling||027 663 email@example.com|
|Mike Newdick||027 479 firstname.lastname@example.org|
|Kathryn Wynd||021 232 email@example.com|
|Joy Yuan||021 158 firstname.lastname@example.org|
|Jack Gu||021 669 email@example.com|
|Ben Hyatt-Brown||021 049 firstname.lastname@example.org|
|Nancy Pribble||021 206 email@example.com|
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