How to read a Particulars and Conditions of Sale
Commonly known as a Sale and Purchase Agreement (S&P), this is the document that you will be signing on after you buy a property. What you see here is what you get. It's very important that you let your lawyer deal with this, and that you don't do anything, and I mean anything, without their explicit direction. For Auckland properties, all the residental contracts are boilerplate, meaning you don't need to read through most of it at all, just two sections.
When looking at properties or evaluating a purchase, it's helpful to be able to read a S&P to understand what you're getting, and what may bother you.
The property particulars
This explains the basics of what you're getting on page one. Some callouts:
GST: If the vendor is registered for GST, consult your lawyer whether GST is payable on top of the sale price. This is usually a topic for new builds.
Estate: This refers to the type of property. Refer back to Titles and Ownership for more details.
Legal Description: For your lawyer, but make sure it is the right house I guess.
Chattels: This explains what else you get with the property, typically fixed appliances, etc. Be careful because what you see at the open home may not be there on settlement day. The vendor is only obliged to provide what you see here. It's also important to understand the brand and model during the process - I know a few cases where the dishwasher was "swapped" from a Bosch to a Midea after the sale, with the claim the nice one was just for staging.
Tenancies: If the property is currently tenanted, this will explain the duration and details. You may not get vacant possession if there is an ongoing tenancy, and you may not be able to easily terminate the tenancy and move in - speak to your lawyer.
Further terms of sale
The further terms of sale on page 9 is where the interesting facts are located. This is where the vendor must disclose any contentious issues or other matters. Here you will typically find statements relating to water-tightness, unconsented work, defective titles, etc.
Be careful though, as the absence of information being in the further terms of sale does not mean there are no issues. It is up to you and your team to conduct the proper due diligence.
Last updated