Most purchasers enter into conditional agreements whether they are buying a small residential property or a large commercial development.
In this article we look at the effect of these conditions.
Conditional agreements occur in over 90% of all property purchases in New Zealand. For example, the current REINZ/ADLS Agreement includes (if selected) a Builder’s Report condition, which allows the purchaser to cancel, if on an objective assessment, they do not approve a Builder’s Report. However, a condition does not of itself grant a purchaser a right to cancel.
The Agreement specifically requires each party to do all things reasonably necessary to satisfy a condition that is for their benefit. Using the example of the Builder’s Report condition, the purchaser must disclose the specific reasons for cancellation and there can at times be disagreement as to just what would be an objective assessment of the Builder’s Report for the purposes of cancellation.
It is important to note that you are not entitled to cancel a conditional contract simply because you change your mind.
Copyright © Cavell Leitch. All rights reserved. Redistribution is only permitted with express written permission. For enquiries please contact us. This article by its nature cannot be comprehensive and cannot be relied on by clients as advice. It is provided to assist clients to identify legal issues on which they should seek legal advice. Please consult the professional staff of Cavell Leitch for advice specific to your situation.