By: Annabel Sheppard
To read this article as a pdf please click here.
  1. Points to note when selling a property in Canterbury
Moving out and moving on? There are many things to think about when selling a property and the recent earthquakes in Canterbury have created extra points to note.

Important issues we have become aware of:
  • It is important to collate all information in relation to insurance and EQC claims you have, including claim numbers, policy numbers, a description of the earthquake damage, a scope of works and repairs completed. The more organised you are, the less questions you will face from potential purchasers.
  • Identify chattels that you want to include in the sale You should have such information noted on the agreement. If in doubt, and you wish to exclude a particular item from the sale you should also note this on the agreement.
  • If the property is rented you should check whether the purchaser expects the property to be transferred with vacant possession or with a tenancy included. If the property is to be transferred with vacant possession then the tenant requires a minimum notice to vacate the property, and the settlement date needs to be planned carefully.
  • Do you have a mortgage? If so, are there early loan repayment fees? Your bank can provide you with this answer.
  • Is your property owned by a trust? The agreement must be signed by all trustees. You must inform all trustees that you intend to sell the property so they can consider the consequences of the sale, and then be prepared to sign the agreement on the day of sale. 
  1. You've found the house of your dreams. What do you need to do now?
When buying a property in Canterbury there are a number of conditions that should be included in the agreement. It is these conditions that may enable you to withdraw from the agreement if you are not completely satisfied.

Usually you will want the agreement to be subject to you obtaining finance and your lawyer approving the title and LIM. In Canterbury there are additional matters you need to consider such as:
  • Being satisfied with a building report, and additional specialist reports e.g. a geotechnical report and a structural engineer's report.
  • Ensuring that you can secure full replacement insurance on the property and that there are no exclusions within the policy particularly in relation to earthquake cover.
  • Provisions requiring the benefits of all EQC and insurance claims will be assigned to you on settlement and that the vendor agrees to lodge an EQC claim and/or an insurance claim if further earthquake damage occurs between you signing the agreement and you buy the property. It is beneficial to obtain from the vendor the EQC and insurance 'Scope of Works' so you can get an idea of the extent of the damage.
There is generally a lot more due diligence required when buying a property in Christchurch even if you believe there has not been significant earthquake damage.

It is very important that you contact us to review your proposed agreement when you are either buying or selling real estate to ensure you are fully protected. 
  1. What if you've made the decision to buy a piece of land and build your dream home?
It is sensible to let your lawyer view the proposed new title to the property as this will show any land covenants and easement information that you may have to take into consideration before you build.

Your lender or your insurer may ask you to obtain a geotechnical report. This details the condition of the soil and helps you determine whether you can build on the site and what specific design requirements might be required. Even if it's not a requirement of your lender or insurer, it is worthwhile getting one for your own peace of mind.

You should also consider obtaining a Land Information Memorandum (LIM) for the property from the local council. The LIM will show any current consent applications on neighbouring properties, resource management zoning, any history of flooding and other relevant information about the property.

Then there's the question of insurance cover. You need to be satisfied that you can obtain full replacement insurance cover when your dwelling has been built. Since September 2010 there are many conditions that homeowners must satisfy and obtaining a new policy for your home is no longer guaranteed.

Importantly: Bare land is not covered by the EQC and so if there is any land damage as a result of earthquakes (or any of the natural disasters covered by EQC), then the cost of land remediation rests with you.
Here at Wynn Williams we have a specialist and experienced team who are familiar with all of these issues. Please contact us if we can help make the process of buying or selling a property a smoother path for you.
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