Plain English S&P agreements could cost users

[Wayne]

I suspect that 98% of agents agreements in the future will use the new form. Time will tell.

only if people let them but, given that most buyers won't know the differance (because they aren't here) you are probably right.

[Davo36]

I'm sure they're fine, the lawyers just want everything to go through them. That's why they have the notices on the back of the agreement saying "Check with a lawyer first...". It's all about them creating fear in their clients so they can get work.

If an agreement was plain english enough to be easily understood by laymen then that's got to be a good thing doesn't it?

David

[Wayne]

I suppose it depends on which side of the fence you are on - if it means that, as buyer, you can slide out due to a technicality then it is good but if you are the seller ...

I am not a lawyer so I really have no idea

[donna]

These are the main differences between the plain English and lawyer style S&P agreements:

The main differences include:

* Even if the agreement is conditional on a builder's report, buyers will need "reasonable" grounds to pull out.

* The building report must be from a "suitably qualified person".

* Problems with the title will no longer be an instant way to get out of a contract.

* Instead, buyers will have to go through a process of asking sellers to fix the problem before they can back out and can only dispute a title defect that will or might affect the buyer's use and benefit of the property.

* Promises (previously knownas warranties) given by vendorsin the new document are widerthan they are in the old ones.

Are these plain English style contracts in use in any other country?

Cheers,

Donna

[Wayne]

Suitably qualified person without a definition?
Reasonable grounds - what is reasonable?

Need a court to define the plain english

[Winston001]

I'm sure they're fine, the lawyers just want everything to go through them. That's why they have the notices on the back of the agreement saying "Check with a lawyer first...". It's all about them creating fear in their clients so they can get work.

Not really. The buyer is going to need a lawyer anyway so there is no new work. However agents do not explain agreements, often because they don't understand them either. And buyers do not know what they are signing.

In fact its not uncommon for a new house buyer to refer to the agreement as an "option" not understanding that it is a binding contract.

If an agreement was plain english enough to be easily understood by laymen then that's got to be a good thing doesn't it?

David

Agreed. However there is nothing magic about "plain english". It's just words......and words mean different things to different people.

The benefit to everyone of the standard AS&P is that it represents 25 years of development. There are a ton of legal cases deciding what the terms mean. A new form means starting over again.

Having said that, I think the standard agreement could do with revision to make it easier to read.

[mortgage broker]

I have heard that Barfoots are holding off on using these new ruthless sale and purchase agreements.

[Wayne]

Not really. The buyer is going to need a lawyer anyway so there is no new work. However agents do not explain agreements, often because they don't understand them either. And buyers do not know what they are signing.

I thought agents had training in this sort of thing - I thought it would be really important for them to understand them?

[Winston001]

I thought agents had training in this sort of thing - I thought it would be really important for them to understand them?

Yes they do and career agents understand the agreements. However many agents rush into the industry thinking its a gold mine and don't put the work in to really know what they are asking people to sign.

Plus....how do I put this.....it requires a bit of intellectual horsepower to understand a legal contract. Some agents simply don't have it.

[Winston001]

In time the new Agreement will settle down and work. It just seems such a waste of time and energy to abandon the AS&P which has had 25 years of development. Everyone in the property industry has to start again. Agents, lawyers, bankers, valuers, property investors, the staff of all these people etc etc.

It would have been much more simple to change the existing agreement.

[essence]

Barrister slams new form

Sunday Aug 30, 2009

A new Real Estate Institute agreement for buying and selling property is being slammed by lawyers as unsound and unsafe to use.

The agreement will cause more litigation and much higher conveyancing costs, according to a legal opinion by barrister Rod Thomas to the Auckland District Law Society.

"It's like a car that needs a product recall because it's unsafe for the road," Thomas said.

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10594051