A New Agreement for Sale and Purchase

29 June 2020

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You all (hopefully!) know that the release of the 10th edition of the ADLS/REINZ Agreement for Sale and Purchase last year made significant changes to the terms of the agreement.

After, no doubt plenty of, feedback from lawyers and agents, a second version of the 10th edition has recently been released. The changes are mainly just clarifications, but there has also been some backtracking on the previous edition’s more major changes.

Here’s a brief summary of the more substantial changes:

Notices by Email - clause 1.4(c): 

The 10th edition brought in notice by email without the recipient needing to reply, but it required an email address for service to be filled in on the back page of the agreement. But what happens if there is no email listed on the back page? Under the new version, if no email address is provided, a notice will be deemed to have been served if it is sent to the law firm’s office email or the lawyer’s email that appears on the firm’s letterhead or website. This is a very useful change, but it’s still good practice to include an email address when you’re completing agreements.

Vendor’s Warranties and Undertakings – clause 7.3(1): 

The previous version had two (confusing) schedules. Different levels of warranties applied to the chattels in these two schedules. The new version has reverted to one schedule for all chattels, and brings back the requirement that these chattels, along with all “plant, equipment, systems or devices which provide services or amenities to the property” are delivered in reasonable working order. This is a wider warranty than the older version, which only covered the chattels specifically listed in the schedules.

Toxicology Report Condition – clause 9.5: 

The 10th edition introduced a standard toxicology report condition. If the toxicology report tested for methamphetamine, it was required to be prepared in accordance with the New Zealand Standard 8510:2017. This requirement has been removed and the report now just needs to be prepared “in good faith by a suitably-qualified inspector using accepted principals and methods”.

Timing for claims for compensation – clause 10.3(1): 

Previous versions required any claim for compensation be served before the last working day prior to settlement. The new version clarifies that an exception to this rule are claims for compensation due to last minute settlement or late settlement. This makes sense, as you obviously would not be able to make a claim for late settlement before settlement day.

Collection of Sales Information - clause 19.3: 

This has been expanded to provide further clarity (probably to better comply with the Privacy Act).

Numbering - clauses 3.16 and 3.17(1): 

A few minor numbering changes have been made where mistakes had interrupted the reading of the clauses.

Further Terms of Sale: 

We once again have a full page to use for our bespoke clauses.

We are told that the ADLS/REINZ Tender and Auction documents are also currently being updated. We look forward to their release. As always, if you have any questions about any ADLS/REINZ Agreement, no matter what version, don’t hesitate to contact us.


As always, if there is anything else we can help you with please get in touch.

Katherine, Sam, Madi, Maria and Jordan
— Convex Legal Ltd

Sam

for more help feel free to reach out. Get in touch with Sam French