Due Dilgence

[Bassai]

What do you think would be the right wording on a sale purchase agreement to have to ensure one is able to back out if a property fails a building report etc

We are looking at buying a 1920's Bungalow and want a building report to ensure there are no nasty surprises. Is there any safe wording one needs to use or do we need to get a high priced mouth piece to draft the wording?

Thanking you in advance

Bassai

[speights boy]

I think this is your very first property purchase ?
Even if you come up with good clauses here, you would be unwise not to have your S & P agreement checked by your lawyer before signing.
They also may have additional conditions suggestions for your consideration.

[Bassai]

I think this is your very first property purchase ?
Even if you come up with good clauses here, you would be unwise not to have your S & P agreement checked by your lawyer before signing.
They also may have additional conditions suggestions for your consideration.

Yes it is our first purchase

[Lord_Grantham]

This S&P Agreement is conditional upon no extensive borer damage to the property.

[BigDreamer]

Here you go:

"This agreement is conditional upon the purchaser inspecting and undertaking a due and diligent investigation of the property and them determining at their sole discretion, within ____ working days after the signing of this agreement by both parties, that the property is suitable for the purchaser's intended use. This clause is for the sole benefit of the purchaser."

This is the best clause you can add into a S&P so you could walk away from the contract within the x number of working days if you found an issue with the property that you are unhappy with.

[Maccachic]

Get your lawyer to do it a few $$ now will save you issues in the future which will cost more. Can recommend Ivan of Carter Atmore Law http://www.calaw.co.nz/ I used him for a complicated S and P in Tauranga he is very thorough. He posts on here regularly.

Best to get a Building Surveyor in to carry out the pre purchase if there are any in your area: http://www.buildingsurveyors.co.nz/panel/membersnear Building defects are their bread and butter and what they are trained in and they carry indemnity insurance to protect you.

[m2 real estate]

Please read the sales and purchase agreement, it clearly states the following:

9.3 If the purchaser has indicated on the front page of this agreement that a building report is required, this agreement is conditional upon the purchaser obtaining at the purchaser’s cost on or before the tenth working day after the date of this agreement a report on the condition of the buildings and any other improvements on the property that is satisfactory to the purchaser, on the basis of an objective assessment. The report must be prepared in good faith by a suitably-qualified building inspector in accordance with accepted principles and methods. Subject to the rights of any tenants of the property, the vendor shall allow the building inspector to inspect the property at all reasonable times upon reasonable notice for the purposes of preparation of the report. The building inspector may not carry out any invasive testing in the course of inspection without the vendor's prior written consent. If the purchaser avoids this agreement for non-fulfilment of this condition pursuant to subclause 9.8(5), the purchaser must provide the vendor immediately upon request with a copy of the building inspector's report.

Placing a due diligence clause is all fine and good if the other party agrees to it, although a good real estate agent will advise their client to place a cash out clause in the contract for the simple reason that their is no real commitment from the purchaser with these types of clauses. Nothing specific etc. You can get out of the deal because you ate some bad cheese or it happened to be raining that day.

[BigDreamer]

Placing a due diligence clause is all fine and good if the other party agrees to it, although a good real estate agent will advise their client to place a cash out clause in the contract for the simple reason that their is no real commitment from the purchaser with these types of clauses. Nothing specific etc. You can get out of the deal because you ate some bad cheese or it happened to be raining that day.

Very true. I can only get away with placing a DD clause in smaller towns. I would never put it in an offer for an Auckland property.