Information for Residential Property Purchasers

1. Agreements Generally

We strongly recommend that wherever possible we be given the opportunity to look at an agreement for sale and purchase before you sign it. Fax systems and other technological advances are such that the delays caused by our first approving an agreement should be minimal.

2. Council report (Land Information Memorandum or LIM)

The Council are obliged to supply a report on the property on request. The report indicates:-

(a) Whether or not permits have been granted for the buildings on the property.
(b) The zoning for the property.
(c) Site plan of dwelling.
(d) Location of drains.
(e) Any outstanding Council requisitions or requirements for work on the property which has not been done.
(f) Whether or not there are rate arrears.
(g) Any proposed public works in the area.

Although the Hamilton City Council charges a fee for the report and it is unusual for there to be any problems associated with the property, we nonetheless strongly recommend that the report be obtained. At the present time the Hamilton City Council charges $126.00 for the report and if a report is required the cost will be added to the figure quoted for legal costs.

3. Cross Leases

The cross leasing system was essentially devised to overcome minimum subdivisional requirements. The characteristics of a cross lease are:-

(a) The owners of all dwellings on the freehold title jointly own the freehold, e.g. if owner A has purchased the front dwelling of a two dwelling development and owner B has purchased the rear dwelling, A owns a half share in the freehold of the rear dwelling as well as a half share in his own property, and B owns a half share of the front dwelling as well as a half share in his own property.

(b) To ensure that A and B have exclusive rights to occupy their own properties cross leases are put in place where:-

(i) A and B are the lessors or landlords of dwelling A and A is the lessee or tenant of dwelling A.
(ii) Similarly A and B are the lessors of dwelling B and B is the lessee.

This is a very common form of title arrangement but there are often errors of drafting contained in the lease documents which could have adverse consequences for you, particularly when you look to sell in the future. We strongly recommend that any agreements for sale and purchase involving cross leases should include the following clause to protect your interest:-

"This agreement is conditional upon the Purchaser's solicitor approving the cross lease arrangements affecting the title within five working days of that solicitor receiving full details of the arrangement".

4. Finance

If you need finance, it is important that you apply for a loan as soon as the agreement is signed by the seller. Please ask your Bank to let us know in writing (usually by fax) when finance has been organised. We need this information no later than the finance date. In practice the finance approval should be notified to us no later than 2 pm on the finance date to allow us time to relay that information onto the seller's solicitor.

If you sign a loan offer with the Bank make sure you understand it. If you have any queries about the terms of the loan offer do not hesitate to discuss them with us before signing. In many cases the loan offer will be forwarded direct to us and we will discuss it with you when you sign the security documents for the loan.

5. Insurance

Once your loan is granted you will have to arrange for insurance cover on the house. Please tell the insurance company the name of the Bank you are borrowing from because that information has to be endorsed on the policy.

6. Rates

We will make sure rates are properly apportioned between you and the seller. You may have to pay some rates in advance on takeover.

7. Settlement Procedure and Keys

You should carry out an inspection of the property the day before the settlement day and you should let us know by 9.00 am on the day of settlement if there are any problems which are disclosed by the inspection. If you decide that you will inspect the property, please let us know at least three days beforehand as we are obliged to give the sellers solicitor notice in writing.

Before the settlement date we will tell you the amount we need from you to complete the purchase. You will need to deliver a bank cheque to us for this amount the day before the settlement date. A bank cheque is drawn by the Bank and is not the same as your personal cheque. Your Banker's should be able to organise this for you without difficulty. On the settlement date your Bank will usually pay the loan monies to us and we complete the purchase for you.

Unless you have made other arrangements with the seller the keys for the property will be handed to us when we complete settlement. You will then need to collect them from our office unless other arrangements are made.

8. Checklist