Te Tāhū o te Ture - the Ministry of Justice has prepared guidance below for people and their lawyers dealing with property sales and settlements during the COVID-19 epidemic. This information will continue to be updated as needed.
At COVID-19 Alert Level 3, it is possible to complete some property sales and settlements, as long as certain conditions are complied with. At Alert Level 3, there is an expectation that all activity relating to property sales and settlements is carried out remotely wherever possible.
At COVID-19 Alert Level 3:
For detailed information about property sales and settlements, and the conditions that must be complied with during Alert Level 3, please visit:
No, at Alert Level 3, you are unable to meet with your lawyer in person at their work premises. All documents should be signed remotely in an Alert Level 3 area in order to continue limiting close physical contact. You should discuss this situation with your lawyer.
At COVID-19 Alert Level 2, it is possible to conduct and complete property sales and settlements in person, as long as the necessary public health and physical distancing requirements are complied with.
At COVID-19 Alert Level 2:
The Law Society recommends that lawyers be given the opportunity to review contracts before they are signed. There are uncertainties in the current COVID-19 environment, for example, how and whether settlement will occur if the Alert Levels increase before the settlement date. Some believe that a solicitor's approval clause will allow them to address any problems down the track (these clauses allow for the contract to be subject to solicitor approval, so that specified matters in the sale and purchase agreement can be checked), but this involves a negotiation and a willingness on the part of both buyer and seller to change the terms of the contract.
For more detailed information about property sales and settlements, and the conditions that must be complied with during Alert Level 2, please visit:
General information about property sales and settlements in light of COVID-19
The sale and purchase agreement sets out what happens if one party is not able to settle. The agreement may allow one party to cancel the agreement and/or seek compensation if the other party can’t complete the sale.
However, these clauses do not usually take into account the unprecedented situation of the response to COVID-19. The legal position may not be clear in the particular circumstances. It is best to get in touch with your lawyer to talk about options.
It is best to discuss what to do with your lawyer. The ideal solution is to negotiate and reach an agreement with the other person involved. Real estate agents are also able to help with these negotiations.
Lawyers can provide advice on rights, obligations and risks and consequences of possible actions in the current, particular situation of their clients. Lawyers can support their clients to find a compromise.
Finding an agreement that works for everyone is the best way to avoid legal disputes and court proceedings which can be time consuming, stressful and expensive.
People should consider that the measures being taken against COVID-19 and the requirements for particular Alert Levels are no one’s fault.
There are many different options. It’s important to find one that suits your particular circumstances and interests.
Every situation is unique. A lawyer is the best person to provide advice on the range of options available in your specific situation and how to go about reaching an agreement with the other party.
No. There is no automatic delay. Some contracts may have a clause delaying settlement where both parties can’t settle. This could be the case where there are technology issues with the settlement.
Every situation is different. In most cases, both parties will want to find a way for the sale to carry on.
No. A person can’t automatically cancel a contract because of the measures being taken against COVID-19. Cancellation rights depend on the terms of the sale and purchase agreement.
The sale and purchase agreement may set out what happens if the sale cannot be completed. A lawyer would be able to provide advice on this and any other laws that may apply to your situation. Because the response to COVID-19 is such an unprecedented situation, it may be unclear whether the requirements for a cancellation are met.
A party cancelling a contract without a proper legal basis may face significant legal consequences. For example, they might have to pay damages for breach of contract. A lawyer is the best person to provide guidance on what may happen if the parties are not able to agree on a way forward.
In all cases, it will be possible to transfer ownership electronically if there are no other problems that prevent the sale going ahead. Many lawyers and conveyancers may be working from home but will be available for their clients and have the necessary technology.
Land Information New Zealand’s (LINZ) electronic land register Landonline is still operating, enabling the registration by lawyers of relevant documents such as transfers or mortgages. Documents that are sent to LINZ by post or courier are still being accepted but processing times may be longer, as some LINZ staff are working remotely.
Many people’s financial situation has changed because of COVID-19 and its consequences. For example, the value of people’s Kiwisaver funds may have reduced. A buyer cannot generally cancel their contract because of their financial position unless the contract is conditional upon finance. It is suggested that parties discuss financial issues with their lawyers, banks and the other party (for example, the seller) to come to a mutually acceptable agreement based on the individual circumstances.
You should talk to your lawyer. Your lawyer can help you find a way forward as this is an unprecedented situation.
You and your lawyer should discuss whether there will be an extra charge for any extra work your lawyer needs to do as a result of the response to COVID-19. You should ask your lawyer whether it will cost extra, and if so, how much. Your lawyer has a duty to charge you a fee that is fair and reasonable and let you know how and when you will be billed.
For more information, see:
The main contact for parties having issues with residential property settlements should be their lawyers or conveyancers.
You may wish to refer to the Law Society website for COVID-19 information and related guidance for law practitioners:
Parties can also contact their real estate agent if they have questions about their transaction, especially if they are at an earlier stage of the selling and buying process.
The Real Estate Authority (REA) has published some guidance for sellers and buyers and prospective sellers and buyers:
Government agencies with relevant responsibilities are:
The purpose of the response to COVID-19 is to save lives. We all need to stick to the rules of physical distancing and only move around for the specific purposes allowed under the current Alert Level.
Across the world, millions of transactions are affected in one way or other by COVID-19. Be kind, cooperate and try to find a good way forward which works for both parties considering this unprecedented situation.