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Defective Titles 3 – 0

There have been a spate of recent cases about requisitions. That is, purchasers objecting to defective titles. This can be relevant to any agreement for sale and purchase of land, but it is especially relevant where there is a pre-sales contract for land or apartments.

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There have been a spate of recent cases about requisitions. That is, purchasers objecting to defective titles. This can be relevant to any agreement for sale and purchase of land, but it is especially relevant where there is a pre-sales contract for land or apartments.

The two most recent cases concerned covenants that were registered on the title after the agreement for sale and purchase was signed. In both cases the Court found the purchaser had an arguable right to requisition.

Sherman Limited v Harlow went all the way to the Supreme Court. In a judgment on 11 April 2011 the Court held that covenants prohibiting the shooting of wildlife, motorcycling, go karting and other similar activities and restricted the keeping of dogs on the land were something the purchaser was entitled to object to. Sherman had not formally advised Harlow the covenants would be registered.

The purchasers were successful, even though they had not followed the process for requisitioning contained in the agreement for sale and purchase. The judgment turned on whether or not these covenants concerned matters arising out of the subdivision plan, as the standard requisitions process refers to. The Court said they were not matters arising out of the plan, so the time limit for requisitioning in these clauses did not apply. So they had not by default accepted the covenants by failing to follow the right process (whether in the agreement or under the common law). The vendor was in breach of its duty as “constructive trustee” for the purchaser.

In Walter Peak Developments Limited (in receivership and liquidation) v Miller the High Court on 9 May 2011 set aside a summary judgment that the vendor had obtained against Miller, concerning an agreement for sale and purchase of a section by Lake Wakatipu.

As is often done in a pre-sale agreement for a section, the contract deleted the standard requisition process and the purchaser was deemed to have accepted the vendor’s title.

Attached to the agreement for sale and purchase was a copy of the head title. This was a fatal mistake here. The head title showed no covenants registered. However the vendor was in the process of registering covenants in favour of a neighbour. The purchaser was not told about these covenants and duly relied on the title attached to the agreement.

When settlement was required 2 years later, the purchaser’s solicitors objected to the covenants in favour of the neighbour and asked for them to be removed from the title. The vendor refused. The vendor argued the purchaser had accepted the title under the terms of the agreement.

The Court did not buy that argument. They said the clause was worded in the present tense, so the purchaser accepted the title attached to and described in the agreement for sale and purchase. The vendor was entitled to register the necessary subdivision documentation, but not anything else.

In Zhou v Grasshopper Farms Limited in late 2010, the Court of Appeal set aside a summary judgment and quashed an order for specific performance that the vendor had obtained. So they also found for the purchaser. This was on the basis that there was an arguable case that the requisitions the purchaser had made were valid. The requisitions concerned four conditions in the Council’s consent notice, required as part of the subdivision process. These included:

  • The owners to meet the full cost of fencing
  • That that fencing be maintained in accordance with a fencing plan
  • That the design and construction of any structures complied with the geotechnical report
  • That the debris protection earth fall bunds be left as is and inspected and maintained regularly at the property owners expense.

The agreement for sale and purchase contemplated a subdivision but did not expressly contemplate consent notices being registered against the title. That is where it appears the vendor has fallen down here. The agreement was not drafted widely enough.

You can see that vendors need to be very precise in this area. That is 3-0 to the purchasers.

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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.

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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.

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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.

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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.

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.

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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.

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.

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This blog article was written for PropertyBlogs by Mobilize Mail.

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