Do I need a lawyer before signing a New Zealand sale and purchase agreement?

Short answer: No, it isn't a legal requirement, but getting legal advice before you sign is strongly recommended. Once signed, a sale and purchase agreement is a legally binding contract, and the Real Estate Authority (REA) says you should always get legal advice before signing, even when a standard form is used.

Why does the timing matter?

A common mistake is:

"I'll sign it and then send it to my lawyer."

By then, some of the most important decisions may already have been made.

The agreement sets out:

  • price
  • deposit
  • settlement date
  • finance conditions
  • LIM conditions
  • building inspection conditions
  • due diligence
  • chattels
  • GST
  • warranties
  • any special conditions for the property

Terms can be negotiated before signing and extra clauses can be added for a particular buyer or property. Extra clauses can be added after the agreement is signed so long as BOTH parties agree. There is no guarantee they will, so it is cheaper and easier if these are negotiated before signing.

What should my lawyer check?

Depending on the property and the transaction, your lawyer may consider:

  • the record of title
  • interests registered against the title
  • easements and covenants
  • unit title documentation
  • the LIM
  • finance requirements
  • building matters
  • the proposed ownership structure
  • KiwiSaver requirements
  • GST
  • Overseas Investment Act issues
  • the right conditions for the agreement

Not every property needs every investigation.

What about the real estate agent?

The agent can prepare a sale and purchase agreement, but in most transactions the agent acts for the seller.

The REA notes that although the real estate professional must treat buyers fairly, in most cases they are working for the seller. They must tell you about known defects, but your own lawyer gives you independent advice on your interests.

Auctions and overseas buyers

  • Auctions are unconditional. If you win, you're committed, so your lawyer's checks need to be done before auction day.
  • Buying from overseas? Your agreement may need to be conditional on consent under the Overseas Investment Act, and you can only buy at auction with pre-approval. See our overseas investor guide.

Our recommendation

If possible, send the proposed agreement to your lawyer before you sign it.

Often the important advice isn't complicated. It may simply mean adding or changing a condition, or identifying something that needs investigating before you're committed to the purchase.

That small step can avoid a much larger problem later.

Talk to us about your situation

If you're considering buying property in Queenstown or Central Otago, Mactodd can review the proposed agreement before you sign and then handle the transaction through to settlement, from our offices in Queenstown and Cromwell.

Call 0800 228 110 or request a call back.

Related guides

Sources

This is general information only. Each purchase depends on the details of the property and the buyer.