Matilda Castelino –
Purchasing house is not the same as purchasing groceries from a supermarket.
However, most people visit a Solicitor after entering into an Agreement for sale or purchase of a property, obviously done by a vendor or the estate agent.
A signed agreement becomes a binding contract and hence cannot be cancelled unless there are requisitions with which the vendor cannot comply.
Instead of completely relying on the judgement of a Real Estate Agent, it is advisable to first approach a lawyer before signing the contract.
Associated Risks
Most prospective buyers’ consideration is that a house should be within their budget.
The purchase of a house for living or investment is a big decision and hence a small mistake may cost your lifetime saving.
There are many risks associated with buying and selling properties in New Zealand.
Have you thought that the home you are purchasing may have been used as a laboratory to manufacture Methamphetamine (‘P’)?
Police figures obtained by the New Zealand Herald shows that since Year 2000, more than 1800 P labs have been found in New Zealand, almost three a week, mainly in residential homes.
Prospective purchasers should satisfy themselves that the property has not been used for illegal or immoral purposes or that it has been decontaminated.
The Auckland Regional Public Health Service also advises that no decontamination procedure can guarantee absolute safety.
LIM Report
The first consideration should always be if the property meets with your requirements for living of investment. Checking Land Information Memorandum (LIM) Report or Building Report is necessary but may not be sufficient.
Often problems and defects may not visible.
How do you determine if a property is free of problems and defects? Should the property be for residential or commercial use?
Answers to these questions would depend on the property that you intend to purchase.
It is equally important to determine the finances relating to the property- your ability to raise a mortgage loan, the deposit required, the rate of interest and other finance options. These must be weighed against the price of the property, price negotiation, pre-approval from the lending institution and how the purchase would affect your financial status.
Auctioned Property
Additional caution must be exercised while purchasing a property at an auction.
Auction contracts are unconditional. Thus, your decision to bid for the auction should be taken only after you are satisfied by inspecting the property and the terms you are entering are agreeable before bidding.
The journey of life has several ups and downs. We do not have power of Nostradamus for predictions. It is therefore necessary to take such measures as necessary to protect the property now and in the future; for you, your successors and even those who may contest it sometime later.
Family Trust
Creating a Family Trust would be helpful to protect your home from future calamity like breakdown in relationships, insolvency and other unforeseen events or developments. Should the property be in an individual name, or jointly owned? Who should be the beneficiaries of the property after your death?
There are several aspects that need to be considered before signing the Agreement as a binding contract. It is important that you engage a Solicitor to look into all aspects of a property and seek appropriate advice.
Matilda Castelino is a Barrister & Solicitor based in Auckland. She is also an Advocate at the High Court of Mumbai, India. As reported in our Web-Edition on April 8, 2017 and our Bi-Weekly Newsletter dated April 12, 2017, she received the “National Law Day Award 2017’ at the Annual Conference of International Council of Jurists in Mumbai on March 25, 2017. She received the honour from former Indian President Pratibha Patil and Sri Lanka’s Chief Justice Priyasath Dep at a ceremony held at the Sahayadri Government Guest House in Malabar Hill, Mumbai.
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Photo Caption:
Matilda Castelino receiving the ‘National Law Day Award’ in Mumbai on March 25, 2017. Please see text for details.
