Selling a property can be an exciting and overwhelming time. Our property lawyers and Smart Move conveyancing team have done this many times before, and we know the process inside out.
This guide highlights some of the important areas of the Real Estate Institute of New Zealand and Auckland District Law Society Agreement for Sale and Purchase and the auction agreement, along with other matters that may be of interest to you as a seller. Every property transaction is different, so it is intended for general information only and is not a substitute for specific legal advice.
This page covers the key points, but our full guide goes into more detail on each stage of selling your property. Every transaction is unique, so please ask us to explain anything you do not understand.
Download the Guide for Sellers (PDF)
Buying a property? Read our Guide for Buyers of Residential Property.
The warranties you give as a seller
The agreement contains warranties and undertakings by you as the seller. These include that you have not received, or do not know of, any undisclosed notice or requirement from a neighbour, Council or other authority, and that you have not given any undisclosed consent or waiver affecting the property. You also confirm you know of no fact that might lead to court proceedings, and that chattels and systems such as heating, cooling and security will be in reasonable working order on settlement.
If you have carried out work that needed a resource or building consent, you warrant that the consent was obtained, the work followed it, and a code compliance certificate was obtained where appropriate. If you have any concerns about giving these warranties, please speak to us so we can protect you from liability. Unit title properties carry extra warranties, so talk to us before you sign.
Cross lease and unit title properties
Different types of titles have different requirements when it comes to sale.
Cross leases: If the flat has been altered since the Flats Plan was deposited, the written consent of all other cross lease owners should have been obtained. If enclosed alterations extend beyond the Flats Plan and it has not been amended, the buyer can require you to rectify the title, which will be costly and means the sale will no longer qualify for the Smart Move fixed fees. Please seek our advice immediately if alterations are not shown on the Flats Plan or lack the written consent of the other owners.
Unit titles: You must provide the buyer with a pre-contract disclosure statement before signing, and a pre-settlement disclosure statement with a body corporate certificate no later than the 5th working day before settlement. Delays or inaccuracies can delay settlement, lead to penalties, or allow the buyer to cancel. Unit titles are complex and do not fall within the Smart Move fixed fee criteria.
Selling a tenanted property
You must specify whether the property is sold with existing tenancies. If it is not, you must give vacant possession. For a periodic tenancy, the law requires at least 42 days’ written notice, so we suggest settlement occurs at least 47 days after the agreement becomes unconditional. A fixed term tenancy cannot be ended this way, so the property will need to be sold subject to existing tenancies, with rent apportioned and any bond transferred to the buyer.
Back-up offers
Please do not sign a back-up offer without consulting us. If it is not correctly worded, you could find yourself with two binding sale contracts that you cannot complete.
GST, IRD and the bright-line test
GST is usually not payable on the sale of a home. If you are a GST registered person, talk to your accountant, as you may be liable for GST from the sale proceeds. We will need your IRD number, or the IRD number of the trust, company or estate that owns the property, to complete the sale.
As of 1 July 2024, if you sell within two years of purchase, the bright-line test may apply and you may have to pay income tax on your gain. There are exceptions, such as the main home exemption, so please speak to us if this applies to you.
Conditions and escape clauses
Most conditions are for the buyer’s benefit, such as finance, LIM, building report, toxicology and due diligence. You may also have vendor conditions, such as an escape or cash-out clause, which lets you keep marketing the property and cancel if you receive a better offer. These suit agreements with a long conditional period or that depend on the buyer selling their own property.
Your deposit
The buyer usually pays the deposit to the real estate agent once the agreement is unconditional. The agent must hold it for 10 working days before releasing the balance to us after deducting commission. In some circumstances you can request an early release after 3 working days, usually where you need the funds for a deposit on your next purchase. If the buyer uses KiwiSaver for the deposit, those funds must stay in our trust account until settlement.
Title requisitions
Under the standard agreement, but not the auction agreement, the buyer can requisition the title if there is a defect. If you are unable or unwilling to remedy it, you must tell the buyer within 5 working days. If you do not, you will be deemed to have accepted the requisition and must comply before settlement, even if it is impossible or expensive.
Insurance and utilities
Keep your house insurance in place until settlement, as you carry the risk until settlement is fully completed. We recommend cancelling it the day after settlement in case settlement cannot proceed as planned.
Rates are apportioned on settlement. If your property has a water meter, we arrange a reading and pay your water use from retained sale proceeds. If your water is supplied by a third party, please let us know. You should also cancel any automatic payments to Council and arrange final readings and disconnection of power, gas, phone and internet.
Repaying your mortgage
Any mortgage over the property will need to be discharged on settlement. If you have several properties with the same bank, the bank may require you to repay lending on those too. Speak to your bank early, as we are usually only told the repayment amount on settlement day. Banks generally charge a discharge fee and may charge an early repayment fee.
Settlement day
On settlement we will collect the balance of the purchase price, transfer the title, repay any mortgage, notify Council of the change of ownership, and authorise the agent to release the keys. Unless the agreement says otherwise, you must give vacant possession, or you may face penalties and damages. Please confirm with us that settlement is complete before you hand over keys or access.
Leave a key and remote controllers with the agent, or speak to us if you are selling privately. All other keys, garage door openers and alarm codes should be left at the property. We will then pay your sale proceeds to your nominated bank account, once we have proof of the account, and send you a final statement of receipts, payments, fees and expenses.
Download the full Guide for Sellers
This page covers the key points, but our full guide goes into more detail on each stage of selling your property. Every transaction is unique, so please ask us to explain anything you do not understand.
Download the Guide for Sellers (PDF)
Buying a property?
Our Guide for Buyers of Residential Property explains the conditions that protect you, title checks, deposits, KiwiSaver, insurance and what to expect on settlement day. Read the Guide for Buyers.
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