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  • Dino Montepara

Getting out of an ‘off the plan’ agreement


It is common for the developer in a property agreement to get the code compliance certificate and having the title issue by a certain date. Sometimes the satisfaction date for those conditions can be 1 or 2 years. If so, a purchaser should include a sunset clause in the contract allowing them to cancel the contract if the developer has not satisfied its conditions by a certain time. Getting out of the agreement may be important if the value of the property is less than the price you have contracted to pay.


Section 225 of the Resource Management Act also gives a purchaser another way out of the agreement even if there is no sunset clause in the agreement. It allows the purchaser to either:


  • Get out of the contract within the first two weeks of signing; or

  • Cancel the agreement if the developer has not made reasonable progress in getting a title for the property within two years after the date of granting of the resource consent or 1 year after the date of the agreement, whichever is later.


In the property climate we currently find ourselves, both sunset clauses and section 225 are conditions that both developers and purchasers must not overlook. For more information on this or any other legal issues you can contact Kemp Barristers & Solicitors at info@kempsolicitors.co.nz or 412-6000.

 


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