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Buying and selling property during the COVID-19 lockdown

Buyers  & Sellers  |  30 March 2020  | By The team at settled.govt.nz

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If you’re in the middle of a real estate transaction, it’s likely to be affected by the COVID-19 lockdown. This page explains what you might need to do depending on which stage of the transaction you’re at.
We’ll update this page when there is new information.

COVID-19 information for buyers and sellers

New Zealand is in the middle of a unique situation, and it is likely to be stressful for all parties involved in a transaction. Be kind, and consider the needs of others when you’re communicating about a transaction.

REA recommends, where possible, that parties agree to delay settlements until the level 4 alert is reduced.

For general information about the current COVID-19 situation please visit covid19.govt.nz

Summary

  • Most banks and many lawyers, conveyancers and real estate agents are still working remotely
  • Talk to your agent and lawyer or conveyancer about what to do - the Law Society has issued guidance to lawyers about how to manage property transactions at the moment 
  • We recommend that you and the other party defer settlement until after the lockdown period
  • Buyers cannot move into new properties during alert level 4.

Sellers who are still marketing

If you don’t yet have an offer to buy your property, talk to your agent about how you might market your property during this time. While New Zealand is at alert Level 4, you won’t be able to hold open homes or have potential buyers visit your property. You could explore other options, like virtual open homes.

If you don’t want to continue marketing your property at the moment, talk to your agent. You might agree to withdraw your property from the market or put your marketing campaign on hold. Usually, sellers pay the marketing costs upfront, and it may be that most of those costs have been spent (for example, TradeMe advertising may have been placed and paid for). Talk to your agent about what will happen to any un-spent funds if you put your campaign on hold.

Sellers who have a conditional offer

While New Zealand is at alert level 4, it’s likely your buyer won’t be able to access the services they need to fulfil their conditions. For example, local councils may not be able to provide a LIM, and building inspectors will not be able to visit the property to inspect it.

Some law firms and agents may still be working remotely, but it’s likely there will be delays in service. Talk to your lawyer or conveyancer and your agent about whether you and the buyer want to extend the conditional period until the alert level is lowered.

Sellers who have an unconditional offer

It may still be possible for settlement to go ahead because all banks and many lawyers and conveyancers are still working, although it’s likely there will be delays in service. Be aware that the buyer’s situation may be uncertain. At alert level 4, moving companies will not be available. If the buyer’s purchase was conditional on selling their own house, they may not be able to settle on their own transaction if they can’t physically move out of their house.

During alert level 4, people cannot move into new properties. Moving companies are not an ‘essential service’ so are not operating and you cannot use your own transport (because you can only use your vehicles to access essential services). You can find more information about what you can and can’t do during lockdown on the Government’s COVID-19 website here.

Talk to your lawyer or conveyancer about the best approach for your transaction. One option is for you and the buyer to agree to defer settlement until after the lockdown period. If you have bought another house, it’s likely you’ll need to have the same discussion about deferring settlement on your new house.

Pre-settlement inspections cannot take place until the alert level is reduced.

Buyers who have a conditional offer

If a seller has accepted a conditional offer from you, it is likely you won’t be able to fulfil your conditions during the lockdown. At alert level 4, non-essential services are closed. This includes, for example, building inspectors.

Talk to the real estate agent and your lawyer or conveyancer about the options available. Some lawyers and conveyancers may still be working remotely, although it’s likely there will be delays in service. You and the seller may agree to extend the period for you to fulfil your conditions until after the lockdown period.

Buyers who have an unconditional offer

If you have fulfilled your conditions and are waiting for settlement day, it’s possible settlement could still go ahead. This will depend on your situation. Some lawyers and conveyancers are still working, so if it’s simply a case of paying the money, settlement can possible proceed.

During alert level 4, people cannot move into new properties. Moving companies are not an ‘essential service’ so are not operating and you cannot use your own transport (because you can only use your vehicles to access essential services). You can find more information about what you can and can’t do during lockdown on the Government’s COVID-19 website here.

If you have sold your own home to be able to move into your new home, talk to your lawyer about your options. One option is to ask the seller if you can delay settlement until the alert level is lowered, and likewise ask the person who is buying your house to delay settlement.

Pre-settlement inspections cannot take place until the alert level is reduced.

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