The Kiwi attitude of ‘She’ll be right’ is not enough to satisfy conditions under an Agreement for Sale and Purchase as discovered in a recent High Court decision (Kerr v Lee 2014). Property owners need to understand that if an agreement is conditional on any conditions, reasonable steps need to be taken to satisfy those conditions. For example, if property buyers sign an agreement subject to the prior sale of their own property, they must take steps towards selling, even if the likely sale price will be less than originally expected. If an agreement is conditional on obtaining satisfactory finance then enquiries need to be made to lenders (or brokers) as to the availability of finance. If finance isn’t available, it would be wise to have the lender or broker confirm this in writing so there is evidence if the cancellation of the agreement is challenged. Likewise, if a contract is conditional on an expert’s report, those reports should be provided in writing.
To read more on the actual case and how purchasers can avoid breaching these obligations, click on here for the full article Fineprint Winter .
We have also covered this very important topic on our web site under Services, Private Individuals, Buying & Selling Property.