House available for sale subject to Title

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Aredwood

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#2013705 11-May-2018 02:09

Be careful that any sunset clauses, or other time based clauses don't get used against you. Heard of a development of industrial units where property prices increased faster than the developer expected. So they delayed the development and issuing the titles on purpose. So they could then cancel all of the sale contracts and then resell the units for higher prices.

Sure the original purchasers got their deposits back. But the developer got to use the deposit money as an interest free loan. And use the sale contracts to help get finance for the development. While the purchasers missed out on the capital gains. And would then have to pay extra to then obtain equivalent property.

Also consider insurance implications of taking possession of a property that you haven't yet purchased. If maintenance or repairs are needed, who pays? What if the house burns down or a natural disaster destroys it? Do you have to pay any rent? And / or would you and the vendor be subject to the residential tenancies act?

pctek

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#2014263 11-May-2018 18:56

Hmmm.

Why is it important to check the title?

The title to a property may be subject to, or have the benefit of, easements such as rights of way and drainage rights. Your property lawyer will search the terms and conditions of these easements. For example, with a right of way, you will want to know how many property owners have the right to use it and what obligations you may have to maintain it.

froob

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#2014489 12-May-2018 08:06

This is a "normal" way to buy a property, to the extent that there are terms covering it in the standard ADLS agreement for sale and purchase of real estate. There is also a default sunset clause in s 225 of the Resource Management Act.

That being said, there are additional risks to the approach, and any potential purchaser should talk to their lawyer about other terms and conditions it would be appropriate to add to the agreement for sale and purchase. There are some good points made above on this.

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Goosey

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#2014497 12-May-2018 08:35

Its just a contract that gurantees the seller that you will purchase the plot apon title being issued. (and the bank takes this as evidence that their client has got buyers and in turn releases more funding etc etc).

The contract should however have 'outs' of course. The deposit you pay isn't going to the seller until 'settlement' and is held in trust by the lawyer involved.

This sort of selling has been in use for a long time... infact a whole lot of the new ChCh sub divisions were sold this way (land only). For an acutal home the agreements tend to be 'settlement on local council code of compliance issued'.

Key thing here is the 'out clause' in case title isnt issued within agreed time (including buffer for delays).

ZollyMonsta

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#2014508 12-May-2018 08:51

kingdragonfly:
Coil:
Want me to query my father who is a top real estate agent in the area? Sounds fishy, Of all the developments he has done and property he has sold I have never heard of something that they will sell you on a whim. I bet the covenants will be ruthless for them to subdivide that...

Cheers

Don't worry. I'd feel uncomfortable handing over money for something that has an undefined title, and is available at some undefined date.

Any buyers lawyer would also likely tell them to steer clear of this sale.

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nickrout

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#2017867 17-May-2018 19:22

Really? Why do people come here for legal advice?

Ask your lawyer.

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Coil

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#2017935 17-May-2018 20:38

nickrout:

Really? Why do people come here for legal advice?

Ask your lawyer.

Makes me wonder as well.

kingdragonfly

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#2018135 18-May-2018 08:44

Besides being free, given enough responses it's probably correct, possibly more correct than a single lawyer.

It's been studied extensively by the likes of MIT.

"Wisdom of the crowd"

https://en.wikipedia.org/wiki/Wisdom_of_the_crowd

"The wisdom of the crowd is the collective opinion of a group of individuals rather than that of a single expert.

A large group's aggregated answers to questions involving quantity estimation, general world knowledge, and spatial reasoning has generally been found to be as good as, but often superior to, the answer given by any of the individuals within the group.

An explanation for this phenomenon is that there is idiosyncratic noise associated with each individual judgment, and taking the average over a large number of responses will go some way toward canceling the effect of this noise.

This process, while not new to the Information Age, has been pushed into the mainstream spotlight by social information sites such as Wikipedia, Yahoo! Answers, Quora, Stack Exchange and other web resources that rely on human opinion."

gbwelly

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#2018140 18-May-2018 09:10

nickrout:

Really? Why do people come here for legal advice?

Ask your lawyer.

Because there are at least two lawyers on these forums that I know of. If I was planning to ask my lawyer/builder/electrician something, I'd ask it here first and compare the information given. It means I have a starting point when I engage them.

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