COVID-19 FAQs for Property Buyers & Sellers’

23 April 2020

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Following the announcement of the Level 4 lockdown, we have been flat tack meeting with clients and moving settlements. There is a lot of misinformation and confusion out there, so we've put together some frequently asked questions which we hope will help.

As always please get in touch with any specific questions.  We will try and get back to you as soon as we can.

Are the days during the Level 4 lockdown ‘working days’?
Yes, the Government’s COVID-19 Alert Level 4 does not affect the definition of ‘working days’ in the standard ADLS Agreement for Sale and Purchase. Therefore, the number of days you have for satisfying conditions under an Agreement does not change. If this will be an issue, contact your lawyer to ask them to request an extension.

Can you settle the purchase or sale of a property during the Level 4 lockdown?
‘Settlement’ is the purchaser’s lawyer paying the vendor’s lawyer for the property. This requires banks and lawyers to be working. Banks are an essential service, so are still working. Many lawyers are working from home, so it should still be possible to make payments.

However, settlement also requires the giving of possession of the property, so if a vendor won’t be able to move out, you will not be able to settle. Please contact your lawyer to discuss delaying settlement.

If the house or land is empty, or has current tenants who are staying on, then you may be able to settle as normal. Please contact your lawyer to Check.

The above applies for COVI-10 Alert Level 3 as well.

Can I move house during the Level 4 lockdown?
During COVID-19 Alert Level 4 you should be staying home, so you should not move house.

What about Level 3 - Can I move house?
During COVID-19 Alert Level 3 you should stay at home if possible, so if you can avoid moving house. Moving companies and vehicle rental companies will likely be closed. We suggest waiting until Level 2 to move house.

What should we do if our settlement date is during the Level 4 lockdown?
The Property Law Section of the Law Society recommends using the following clause to amend existing Agreements for Sale and Purchase or Auction Agreements due to settle during the Level 4 lockdown:

"The parties agree that settlement is hereby deferred to the 10th working day after the Government reduces the COVID-19 Level to Level 2 or below, or to such other date as may be mutually agreed. For the sake of clarity neither party shall have any claim against the other in relation to this deferral."

This change needs to be made by written agreement of both the vendor and purchaser – it is not an automatic change.

Some people are suggesting that Level 3 be used instead of Level 2. This may depend on your and the other parties’ circumstances, and abilities to move. Contact your lawyer to discuss changing your settlement date, and what Level may be appropriate for you to be able to settle.

Can I meet my lawyer to sign bank or transfer documents during the Level 4 lock-down?
During COVID-19 Alert Level 4 you and your lawyer should both be staying home, so you cannot meet in person. You can meet with your lawyer via video call if you have that capability.

Can I meet my lawyer to sign my KiwiSaver application during the Level 4 lockdown?
During COVID-19 Alert Level 4 you and your lawyer should both be staying home, so you cannot meet in person. KiwiSaver applications require a statutory declaration, which must be completed in person.

You may be able to complete this at a District Court, but some courts have suspended this service, so you should call ahead. As this is non-essential travel, for your health and the court staff, we recommend that you instead ask your lawyer to delay settlement until 3 weeks after Level 4 ends, so that you can complete your KiwiSaver application once the Level 4 lock down-ends, and then have time to withdraw your KiwiSaver.

I’ve been affected by COVID-19. Do I still need to make my mortgage payments?
If you have been affected by COVID-19 you may be eligible for a mortgage payment holiday. The specifics of these schemes are still being finalised, but will be made public shortly. Contact your bank for more information. In the meantime, we recommend continue paying as normal if you can. Your home loan agreement will also likely have an ‘unforeseen hardship’ clause, which allows you to ask your bank or lender to assist you in difficult times. Once again, contact your bank or lender for more information.

Talk soon,

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

Sam

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