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The New REINZ Plain English Sale and Purchase Agreement The Real Estate Institute of New Zealand's ('REINZ') new Agreement for Sale and Purchase ("the new agreement") was introduced in July this year in an effort by REINZ to create its own form of agreement that uses clear language and appeals to the lay person. Before the introduction of the new agreement, it was standard practice to use the Auckland District Law Society ('ADLS')/REINZ Agreement for Sale and Purchase ("the standard form agreement").
The standard form agreement has been in use for over 20 years, is tried and tested, and very familiar to both real estate agents and conveyancing professionals. Consequently, there has been extensive discussion and critique of the new agreement.
A significant difference from the standard form agreement is the way in which the standard conditions (i.e. title approval, LIM, builder’s report and tenancy) in the new agreement are dealt with. The party approving the condition (“the approver” which normally will be the purchaser) must not unreasonably withhold approval of a condition. If the approvers withhold their approval they must give notice to the other party that the condition is not satisfied, the reasons why it is not satisfied and what is required to rectify the problems. The other party then has five working days to either agree to rectify the problem or they may elect to cancel the agreement. During this five working day period the approver cannot cancel the agreement. |
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Inside this edition
The New REINZ Plain English Sale and Purchase Agreement The Partial Defence of Provocation Unit Titles Law Change Updated Changes to the District Court Rules Hand-Held Cell Phone Ban for Vehicle Drivers
Some positive changes that the new agreement has introduced include the following:
Overall, most commentators believe the new agreement will lead to uncertainty for both the vendor and purchaser, an increased number of disputes and a resulting increase in legal costs. It is therefore strongly recommended that both vendors and purchasers seek legal advice before signing any new agreement for sale and purchase. |
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The partial defence of provocation is predominantly set out in section 169 of the Crimes Act 1961 and effectively reduces a charge of murder to manslaughter. In order for an accused to successfully argue provocation they must prove:
Ultimately provocation is a high test to satisfy and although it is often raised, few offenders are successful. Critics of the partial defence argue that it is an archaic and outdated notion about violence. They claim the defence effectively rewards a lack of self-control in offenders who intentionally take another person’s life. Historically the rationale for the defence of provocation was to avoid a mandatory sentence for murder (originally capital punishment and later life imprisonment) in cases where factors arising from the circumstances of the case may reduce the offender’s sentence. However, life imprisonment for murder is no longer mandatory by virtue of the Sentencing Act 2002, which begs the question, is the defence of provocation still necessary? |
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Many argue that accusations of provocation can be dealt with by a judge during sentencing and have no place in the actual trial which determines guilt or innocence. Once an offender has been convicted, a sentencing hearing is held where they are able to present mitigating factors of the offence (such as provocation) to the judge which may reduce their sentence.
Furthermore, the defence provides the offender with an opportunity to attack and tarnish their victim’s character. The resulting experience can be very traumatic for the victim’s family and friends.
Not everyone, however, agrees that the defence of provocation should be abolished. Some argue that removing the defence would be playing around with the basic concepts of criminal law.
Parliament has already taken steps to remove the partial defence of provocation from the statute book. The Crimes (Provocation Repeal) Amendment Bill 2009 ('the Bill'), was introduced to Parliament on 4 August 2009 and had its first reading on 18 August 2009. The Bill will effectively repeal sections 169 and 170 of the Crimes Act and therefore abolish the defence of provocation in New Zealand.
There is no indication when or if the Bill will be passed into law, but it is clear that there is a lot of support from both Parliament and the general public for the change. |
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One major change to the Act will be the specific disclosure requirements for vendors and developers of unit title properties. Vendors especially will need to be aware of the proposed disclosure requirements as it is mandatory for them to provide disclosure statements to a purchaser on the following occasions:
Vendors need to be aware that if a disclosure statement is not provided to the purchaser within the specified timeframe then the purchaser may be able to defer settlement or even elect to cancel the contract. Vendors will also need to be careful to provide purchasers with accurate information as purchasers will be entitled to rely (in a legal sense) on that information.
Developers will be required to provide the body corporate with disclosure statements dealing with the construction systems of the buildings and their compliance with the Building Act. |
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Another major change is the move from the need for a unanimous resolution of the members of the body corporate to a 75% majority. The purpose for this change was to prevent voting on important matters from being blocked by one unit owner.
The common property of unit titles will now be owned by the body corporate. Presently common property is owned by the unit owners as tenants in common. It is proposed however that unit owners should still have a beneficial interest in the common property.
The body corporate will be required to make a long-term maintenance plan which must include expected maintenance requirements for the following 10 years, an estimate of costs involved with those maintenance works, and the basis for levying the costs from the unit owners.
The Act is very inflexible regarding unit entitlements which determine voting rights and how much unit owners contribute towards body corporate costs. The Bill seeks to address this by separating unit entitlements into two elements:
Another major change is the way in which disputes under the Act are dealt with. Under the Bill any disputes will be referred in the first instance to mediation and then adjudication through the Tenancy Tribunal. Disputes were previously resolved solely through the courts.
As apartments and townhouses become a preferred style of living in the modern world, having a knowledge of unit owners’ rights and obligations under the Act is necessary. After the Bill is passed, all existing unit titles and bodies corporate will have 15 months to bring themselves in line with the provisions of the new Act.
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For those readers who have consented to act as a trustee for a friend or family member without really understanding what that role entails - the list below, while not exhaustive, sets out some of the most important trustee duties.
The duty of efficient management
The duty to keep and render accounts to beneficiaries
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The duty to act personally
The duty of loyalty
In all things, a trustee’s standard of care is measured against that of an ordinary prudent business person managing the affairs of others. Of course a higher standard is required if the trustee is a professional person such as a lawyer or accountant.
The management of trusts often come under scrutiny and all of the benefits of having a trust may be lost if the trust records and procedures do not meet the required standard. It is therefore important to keep a clear audit and paper trail and to bear the above trustee duties in mind. It is also important to insist that you, as a trustee, are kept up to date with all of the trust’s affairs.
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District Court proceedings are often a drawn out and expensive process for all parties involved. The parties are required to file claims, notices of defence and sometimes counterclaims before the matter is heard. In some cases this process can take months or even years with the parties incurring significant costs. Many potential litigants are deterred by the cost and decide that the process is not worth the effort.
Parliament’s radical new changes to the District Court Rules (‘the Rules’) are an effort to streamline the proceedings, reduce the volume of paper filed in Court and reduce the cost of filing fees. The new rules completely revamp the District Court process by focussing on the speedy and inexpensive determination of proceedings. Emphasis is now placed on reaching negotiated settlements at an early stage. The new Rules came into force on 1st November 2009. The main changes include the following:
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At present there is a significant disparity between the maximum amount of a dispute able to be determined by the Disputes Tribunal and the level which practitioners perceive to be the minimum amount of a dispute that is economically viable to be resolved at the District Court. The new Rules seek to close this gap.
The Rules will provide more of a focus on the dispute itself rather than legal procedure. This will make it easier for non-lawyers to understand and engage in the process.
Pre-hearing matters that are often used by parties to draw out the process will be removed. Parties will have to comply with strict timeframes which will lead to more predictable timetabling for hearings.
The pre-hearing process of discovery is all but eliminated. This has historically been an expensive and time consuming process whereby parties must produce for inspection all documents that relate to the proceedings. This included documents that were adverse to the parties’ case. The parties will only have to produce documents that they plan to rely on.
The focus of the new Rules is for parties to exchange their evidence and arguments at an early stage and reach a settlement with minimal intervention from the court. Before a hearing, parties will be required to attend judicial settlement conferences. These will last for 90 minutes, presided over by a Judge and will focus on mediation of the issue. If settlement is not reached during the conference then a trial will be allocated according to the complexity, size and value of the dispute.
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Hand-Held Cell Phone Ban for Vehicle Drivers From 1 November 2009, motorists are no longer able to text or talk on a hand-held cell phone while driving. This comes from a change in the New Zealand Road Rules.
New Zealand will join at least 50 other countries who all have bans or partial bans on the use of hand-held phones by drivers.
However, drivers will still be able to use cell phones if they do so with a hands-free device and two-way radios. There will also be an exemption for 111 emergency calls. |
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The Maori Land Court can make orders converting general land to Maori land. When this has happened in the past, Land Information New Zealand has not had a system in place to update its records. However, with the introduction of the electronic land transfer environment, when Maori Land Court orders are made, the land will be flagged as Maori land.
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If you have any questions about the newsletter items,
please contact me, I am here to help. Simon
Scannell S J
Scannell & Co - Phone:
(06) 876 6699 Fax: (06) 876 4114 Email: simon@scannelllaw.co.nz All information in this newsletter is to the best of the authors' knowledge true and accurate. No liability is assumed by the authors, or publishers, for any losses suffered by any person relying directly or indirectly upon this newsletter. It is recommended that clients should consult S J Scannell & Co before acting upon this information.
S J Scannell & Co
Would like to wish
you and your family a Merry Christmas and prosperous New Year
We advise our offices will be closing on
Wednesday, 23rd December 2009 and re-opening on
Thursday, 14th January 2010 at
8.30 am |
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