When buying a new build it could take months (or even years) before the title issues and the property is built. In such a case, the sale and purchase agreement should include what is known as a "Sunset Clause". A well drafted Sunset Clause would allow the purchaser to cancel the agreement and have their deposit refunded if the title has not issued or the property has not been completed by a certain date. This is to prevent you as purchaser being locked into a purchase that takes an unreasonable amount of time. It then allows you the freedom to purchase another property.
Some Sunset Clauses allow the vendor to also cancel the agreement. This can be risky for a purchaser who buys a property in a rising market. This is because it may become attractive to a vendor to intentionally delay so that they can cancel the agreement and sell the same property to another purchaser at a higher price. This is one of the reasons why it is important to obtain proper legal advice before signing an agreement to purchase a new build.
For more information on this or any other legal issues you can contact Kemp Barristers & Solicitors at info@kempsolicitors.co.nz or 412-6000.