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Prospective Home Buyers Now to Provide Proof When Withdrawing From Property Deals Based on Finance
House buyers will no longer be able to withdraw from a property deal by simply stating they can’t get finance, following a change to the REINZ/ADLS Agreement for Sale and Purchase that came into effect on Friday 6th December.
The new clause is the most significant of a number of changes included in the 10th Edition of the Agreement.
While up until 5th December buyers could generally pull out of a contract by citing difficulties obtaining finance when a finance condition had been inserted in an agreement, they could now be asked to provide evidence. Supporting evidence could be in the form of a letter or email from the purchaser’s bank confirming they had been declined finance.
This is a significant change as if the evidence is not provided the potential purchaser could be forced to proceed with the sale or be made to face legal action by the vendor.
It is seven years since major changes were made to the Agreement for Sale and Purchase. Other changes to the Agreement include:
- The inclusion of an optional toxicology report condition
- A detailed new process to resolve compensation disputes
- Changes to vendor warranties
- The removal of the terms ‘fixtures’ and ‘chattels’ – now referred to as ‘operational’ and ‘non-operational’ items
- Tenancy documents now need to be provided to the vendor on the settlement date
- Revised GST clauses
- The reference to fax machines has been removed.
Crockers advises that purchasers should always seek legal advice before entering into any contract.
The Crockers sales team welcome these clarifications and recommend that purchasers should always seek legal advice before entering into any contract. Contact one of the team for a FREE property appraisal at firstname.lastname@example.org