Before lockdown a person sells a property in Auckland (to another Aucklander) and signs up to buy one in Queenstown with settlement date for both sales in early September...

If Auckland stays at level 4 but Queenstown is on level 3 or 2 what happens? Can the settlement proceed?

Thanks for your help.

lovelurking - 2021-08-24 18:13:00

Settlement can proceed at any level. Just the person might not be able to move out of their property and move into the other one.

Edited by sparkychap at 6:40 pm, Tue 24 Aug

sparkychap - 2021-08-24 18:39:00

Thanks sparkychap.
Would that mean that the Auckland house sale will still go ahead on the prearranged date but the relocating person stays in that house because they are still locked down in it until Auckland goes down to a level 3?
( I hope I’m making sense?)

lovelurking - 2021-08-24 18:50:00

A friend got stuck in first lock down on something like this. Sold Nelson brought Ashburton she went to sign papers and lock-down hit She couldn't return to hubby :) and he could go down. Apart from general Pee off factor. Their main problem was Insurances, and how to do such But I am guessing finances co's and likes since then have sorted curly bits out.

anne1955 - 2021-08-24 19:33:00

lovelurking wrote:

Thanks sparkychap.
Would that mean that the Auckland house sale will still go ahead on the prearranged date but the relocating person stays in that house because they are still locked down in it until Auckland goes down to a level 3?
( I hope I’m making sense?)

entirely depends on what’s agreed. The purchaser cannot have their pre-purchase inspection and the vendor cannot provide vacant possession. If they settle and the vendor stays they need to ensure he doesn’t become a tenant - probably give him/her a fixed short term tenancy?

Really better to try and postpone settlement for all concerned.

sparkychap - 2021-08-24 21:06:00

Oh and at L3 travel between regions is still restricted.

sparkychap - 2021-08-24 21:40:00

The member deleted this message.

onl_148 - 2021-08-25 11:56:00

lovelurking wrote:

Thanks sparkychap.
Would that mean that the Auckland house sale will still go ahead on the prearranged date but the relocating person stays in that house because they are still locked down in it until Auckland goes down to a level 3?
( I hope I’m making sense?)

Yes, but any number of factors may make that almost impossible or at best undesirable. Far better to agree to settle say 5 working days after both regions are at a level that allows movement between the regions.

johnston - 2021-08-25 12:47:00

johnston wrote:

Yes, but any number of factors may make that almost impossible or at best undesirable. Far better to agree to settle say 5 working days after both regions are at a level that allows movement between the regions.

Thanks NIJ...
Could the Queenstown vendors cancel the contract if the Auckland purchaser can’t settle on the arranged date because of Auckland remaining on level 4?
(PS. I am not involved in the process but don’t like seeing my Auckland friend worrying.)

lovelurking - 2021-08-25 14:42:00

lovelurking wrote:

Thanks NIJ...
Could the Queenstown vendors cancel the contract if the Auckland purchaser can’t settle on the arranged date because of Auckland remaining on level 4?
(PS. I am not involved in the process but don’t like seeing my Auckland friend worrying.)

Assuming the standard covid clauses were used and Queenstown allows travel the answer is yes. That might be a harsh reaction though depending on why the purchaser cannot settle.

Why is your Auckland friend thinking they won't settle?

Edited by johnston at 4:55 pm, Wed 25 Aug

johnston - 2021-08-25 16:50:00

@johnston are / were those clauses being generally used in anticipation of a future lockdown?

sparkychap - 2021-08-25 17:15:00

sparkychap wrote:

@johnston are / were those clauses being generally used in anticipation of a future lockdown?

Yes, at least they were here. I did one yesterday where I had to draft another clause because the potential Auckland purchaser for a Tauranga property needed to settle and take possession on the same day. Hopefully that makes sense.

johnston - 2021-08-25 17:40:00

johnston wrote:

Yes, at least they were here. I did one yesterday where I had to draft another clause because the potential Auckland purchaser for a Tauranga property needed to settle and take possession on the same day. Hopefully that makes sense.

Yes moving from Auckland to Tauranga makes total sense...

sparkychap - 2021-08-25 18:00:00

johnston wrote:

Assuming the standard covid clauses were used and Queenstown allows travel the answer is yes. That might be a harsh reaction though depending on why the purchaser cannot settle.

Why is your Auckland friend thinking they won't settle?

Because of level 4 I think. The Auckland buyer is also selling a house to buy my friends one.

A bit of a log jam potentially going to happen due to no ones fault I think.
It’s a stressful enough time without being in lockdown...

Last New Zealand wide lockdown I thought residential real estate transactions were put on hold until level 2 and I assumed that would apply this time too.

Thanks for your input.

lovelurking - 2021-08-25 18:07:00

lovelurking wrote:

Last New Zealand wide lockdown I thought residential real estate transactions were put on hold until level 2 and I assumed that would apply this time too.

Not automatically. Parties to transactions were encouraged to be reasonable and amend contracts accordingly. I suspect most did, but I also know some settled happily where they didn't need to move.

sparkychap - 2021-08-25 18:13:00

lovelurking wrote:

Because of level 4 I think. The Auckland buyer is also selling a house to buy my friends one.

A bit of a log jam potentially going to happen due to no ones fault I think.
It’s a stressful enough time without being in lockdown...

Last New Zealand wide lockdown I thought residential real estate transactions were put on hold until level 2 and I assumed that would apply this time too.

Thanks for your input.

Settlement can still take place just not moving. In your friends case they can still settle and insist on their settlement if common sense and goodwill doesn't prevail.

johnston - 2021-08-25 18:15:00

johnston wrote:

Yes, at least they were here. I did one yesterday where I had to draft another clause because the potential Auckland purchaser for a Tauranga property needed to settle and take possession on the same day. Hopefully that makes sense.

Thank goodness for essential workers I say as I sit here safe in my bubble.
My friend is an essential worker and doesn’t need this extra stress on top of already busy days.
Cheers.

lovelurking - 2021-08-25 18:19:00

sparkychap wrote:

Not automatically. Parties to transactions were encouraged to be reasonable and amend contracts accordingly. I suspect most did, but I also know some settled happily where they didn't need to move.

Thanks sparkychap. It gives me confidence that this too will have the “and they all lived happily ever after” ending and not the ”little red riding hood” one... ????

lovelurking - 2021-08-25 18:27:00

johnston wrote:

Settlement can still take place just not moving. In your friends case they can still settle and insist on their settlement if common sense and goodwill doesn't prevail.

Got it. Thanks for your time and helpful explanations.

lovelurking - 2021-08-25 18:33:00

sparkychap wrote:

Yes moving from Auckland to Tauranga makes total sense...

Unless you are a Taurangaian.

johnston - 2021-08-26 06:46:00

Apparently REINZ released a new clause today that covers what I drafted a few days ago and would have provided clarity for your friend.

johnston - 2021-08-27 18:13:00

Cheers for that johnston, I will google it.

I’m pleased to let you know that it looks like things have calmed down and common sense and goodwill is going to prevail after all...

Thanks everyone. I’ll be back if it turns to custard!

lovelurking - 2021-08-27 19:08:00