If you have a property settlements planned over the next 4-5 weeks or have had settlements delayed due to the current lockdown, this article answers some of the questions that we have been asked by our clients on what the next steps are and what the process will be.
There are three types of settlement dates:
1. Specific settlement dates
For those of you with these dates, if we are still at either Level 4 or Level 3 still prevents the practical settlement attendances from happening, then we will liaise with the other lawyers involved about amending those dates pursuant to 2 or 3 below (should you wish to do so). The legal position as to whether settlement must take place during this time is not clear cut and often depends on the specific circumstances (particularly where it is the sale or purchase of a tenanted property). Legally we are still able to settle if required but it is the practical implications that need to be taken into account. If you require or would like a delay in settlement then we would like to think that the other party would be (using Jacinda Adern’s call to “be kind”) and are likely to also prefer delay.
2. Settlements x number of working days from the Alert Level dropping to 2 or lower
It could be some time until the government drops the level to 2 or lower. In those situations where you would like to settle as soon as practical, we will contact the other party about amending the dates to category 3 below. The level 2 settlement date was based on recommendations from the Property Law Section and those dates were mainly used when negotiating a change in the settlement dates during the early stages of the lockdown.
3. Settlements x number of working days from the Alert Level dropping to 3 provided the practical settlement attendances are still possible (physically moving, connection of utilities etc).
These settlement dates were used for those negotiations later on in the lockdown period as an early drop to Alert Level 2 became less and less likely. Thursday’s announcement from the government didn’t really clarify things regarding whether final inspections, seeing lawyers to sign paperwork and moving in/out of a property could still take place. Hopefully more guidance will become available so all parties are clear about what is and is not allowed.
For those of you whose settlements fall under categories 1 and 2, please consider whether you would like to settle under category 3 instead and we will contact the other party and look to negotiate an amended settlement date. In most circumstances we expect the other party in the transaction would like to do the same. However, bear in mind that the legal obligation for the other party to do so is unclear.
Practical steps which you can take in the meantime:
- Ensure you have completed all identification and address verification requirements outlined in our letter of engagement (“CDD”/”AML”) and these have been provided to us.
- Contact your bank to ensure that arrangements with your loans have been finalised. Consider also reappraising whether, given the recent drop in rates, a fixed or floating loan would be best
- Ensure KiwiSaver/First Home Grant applications have been completed (if required)
- Consider your moving arrangements and ensure that your removal company is still available (or friends and family with trucks and trailers)
- Ascertain whether you have access to printing and scanning facilities and if not, please let us know so arrangements can be made.
- Ascertain whether you have access to a video calling device such as a smart phone or personal computer with the right software.
Most importantly Langley Twigg is still operating “business as usual” (albeit from the comfort of our own homes). In the majority of situations the transfer/loan documentation can still be signed via Skype/Zoom/FaceTime (Even using the “House Party” App) and we have access to all files remotely.
In the meantime, stay safe, tick off the rest of the items on the household chores list and make the most of the time you have with those lucky enough to share your “bubble”!
