General

Subdivisions, minimum areas and cancellation of contracts

Published

14 years ago

September 21, 2010

The Supreme Court decision in Mana Property Trustee Limited v James Developments Limited gives some useful advice about minimum area clauses which developers/purchasers entering pre-sales contracts should consider. This case is also useful when considering what to do when there is a breach of an essential term in an agreement for sale and purchase.

The Court found for the developer, i.e. the purchaser incorrectly cancelled the agreement for sale and purchase.

The purchaser had signed up to buy a section and in clause 18.3 it was agreed that the section “must not be less than 4.7150ha”. The section was in fact only 4.6990 ha when settlement was first called for. This was held to be a breach by the developer of an essential term of the contract. Although the clause had not expressly been agreed as essential, the Court decided that the use of the word “must” in a clause that otherwise allowed an adjustment of the purchase price if the area was deficient, meant that the clause was intended to ensure a purchaser should not be obliged to take a piece of land with an area less than 4.7150ha.

The lesson here, if including a minimum area clause, consider the areas carefully and the consequence if it is not met. A developer will be required to comply with it and if breached, a purchaser will have a right to cancel.

So the purchaser won on that point and was entitled to cancel for breach of an essential term. However, it all went wrong for the purchaser because of the way the contract was cancelled. The purchaser didn’t give a settlement notice before cancelling. It proceeded assuming the breach of the essential term gave an immediate right to cancellation. But, the usual settlement notice procedure was included in the contract and importantly, although clause 18.3 was essential, the time for settlement was not. As it turned out, the developer was in fact able to deliver a title of at least 4.7150ha on the 12th working day after the purchaser issued it’s notice of cancellation (as it purchased some land from Council and effected the boundary adjustment in time). The cancellation was therefore invalid.

So breach of an essential term in an agreement for sale and purchase gives a right to cancel, however unless the time for performance is also essential the way to cancel is to give a settlement notice, wait 12 working days (or whaetevr period the contract proivides for) and if the breach has not been remedied, then cancel.

Related Topics:Cancellation of Contracts Subdivisions

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Growing Economy Increases Housing Demand

Auckland is New Zealand’s economic hub and with our economy set to continue to grow over the next couple of years demand for housing in Auckland will remain high. Property values in New Zealand have increased by more than 25 percent in 3 years and NZHerald also reports Auckland’s the median house has risen by 46.5% however there are investors buying Auckland residential property for less than market value.

Published

9 years ago

September 21, 2015

PropertyBlogs

Auckland is New Zealand’s economic hub and with our economy set to continue to grow over the next couple of years demand for housing in Auckland will remain high.

Property values in New Zealand have increased by more than 25 percent in 3 years and NZHerald also reports Auckland’s the median house has risen by 46.5% however there are investors buying Auckland residential property for less than market value.

For some investors in the Auckland property market the highly profitable property deals are apparently still out there. PropertyTutors mentoring clients have continued to buy residential property below market value in 2015. This month alone Lauren a new investor under the guidance of mentor Sean Wood bought two properties in 24 hours for less than the market price who would have thought it possible?

Also with demand for property at an all time high, investors like James and Elliot are managing to sell their properties whilst they’re still renovating them. This lowers the investor’s costs as there are no property marketing or listing fees.

Head of Trade Me Property Nigel Jeffries says the latest Property Price Index showed that while the average asking price in Auckland has risen by 20 per cent in the last year, small houses (1-2 bedrooms) had increased 24 per cent and apartments were up a “staggering” 49 per cent in a year.
Trade Me Sales Price Index

As long as our economy continues to grow, demand for Auckland housing in all its forms will be strong.

This blog article was written for PropertyBlogs by Mobilize Mail.

General

Nelson – Hot Location For Lifestyle

Baby boomers particularly those currently living in Auckland may be setting their sights on Nelson and who would blame them. Nelson offers the perfect lifestyle with a mediterranean climate, idyllic nature walks, sandy beaches, culinary delights and of course it’s one the cultural arts capitals of New Zealand too.

Published

9 years ago

July 6, 2015

PropertyBlogs

The house and land packages in Nelson are really too good to be true. Imagine selling your property in Auckland, capitalising on the high property values, and securing a better lifestyle in a brand new home (mortgage free) in one of the safest and friendliest places in the world! This was once a move only the wealthy could afford. Now it’s a reality for so many Aucklanders thanks to the buoyant property market.

The latest annual property sales report showed an increase in property values of 17 percent for Auckland. The average asking price for a property in Auckland starts at seven hundred and fifty thousand dollars, while in Nelson brand new home and land for sale deals start from two hundred and fifty thousand dollars.

Nelson is out of the spotlight and flying under the radar right now, but it may not last for much longer. The property market is on the move in this region with Trade Me Sales Price Index reporting property values up by over six percent during the last property sales season.

Aucklanders in their middle to late years of life will be questioning their current position. They will want to time their move so they can cash in their property equity to create a better lifestyle somewhere else; probably in New Zealand’s answer to the Med – Nelson!

This blog article was written for PropertyBlogs by Mobilize Mail.

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Weekend Renters Trash Family Home

What can go possibly go wrong renting out your home for short term stays via a very reputable and popular online travel website? For most homeowners it all works out really well. However for this young Canadian couple it went horribly wrong.

Published

9 years ago

May 4, 2015

PropertyBlogs

On NZHerald it was reported the young Canadian couple found out just how bad things can get when they rented out their home for a weekend. While the $875 rent was really attractive and it’s the reason so many other homeowners use the travel website Airbnb to rent out their properties on short stays, for this couple it was too good to be true.

An early txt message from a neighbour on Monday morning suggested not all was well at their home. Their weekend renters had well and truly trashed their home and caused $80,482 worth of damage to the property. Could this have been avoided? Well not entirely but like a goods trading site e.g. TradeMe where sellers and buyers build up a reputation for their trading activities the same applies on sites like Airbnb. Therefore as a renter or landlord you can review the feedback on the interested parties and make your selection based on it. It is unclear whether the Canadian couple took this action.

‘Caveat Emptor’ (buyer beware) is the lesson here – always do your due diligence on anyone interested in renting your property.

Source

This blog article was written for PropertyBlogs by Mobilize Mail.