What conditions should you include?

Finance – If you are to obtain lending for this purchase, a condition should be included which gives you sufficient time to obtain and/or finalise this lending.  You may have received pre-approval from your bank, however this will generally require a few conditions to be met regarding the particular purchase before the lending is fully approved. Even if you are not obtaining lending but intend to apply for KiwiSaver or HomeStart Funds, a condition should be included as these applications can take up to fifteen working days to be reviewed and approved.  You cannot end a contract on the basis of not being able to obtain sufficient finance if this condition is not included in the Agreement.

Builders Report – A Builder’s Report will report on the condition of various aspects of the property.  These should include the exterior cladding, weather tightness, windows, plumbing, drainage, roofing materials, insulation, condition of floors, walls etc. The depth of the report may differ from each company so it is a good idea to discuss this when making initial enquires with whomever you ask to undertake this work.

LIM Report – A Land Information Report is obtained from the local District Council.  This is a detailed report that should include District Plan information including zoning and an indication of the intended use of the property, identify any special features or characteristics of the land concerned, any natural or man-made hazards that may affect the property, any Building Consents or Permits related to the property, a summary of the rates for the property, etc.  If you do not wish to pay for a full report, most Councils will allow you to check the records for the property yourself.

Title Report – A title report will identify any encumbrances or memorials registered against the title for the property. These may include right of way, right to convey water, electricity, sewage etc., covenants which may include design guidelines for the property and other rules relating to how the land is used.

Insurance – Since the Christchurch and Kaikōura earthquakes, there are certain areas of the country which insurance companies now class as high risk when providing insurance cover.  Without suitable insurance, you will not be able to obtain finance.

Other conditions which may also be included are:

Sale of Existing Property – If you are needing to sell an existing property to make this purchase, a condition should be included for you to have obtained an unconditional agreement for the sale of that property by a particular date. This means you are not committed to a purchase without having sold your own property.

Illicit Substance Testing – This will allow for testing to be undertaken in the property which will show if any illicit substances have been used or manufactured there, in particular methamphetamine.

Due Diligence – Time to allow a wide range of investigations to be conducted. We recommend this because the right to withdraw from an agreement (if you are dissatisfied with something) may not be available to you through the LIM or Title requisitions.