Today the NZLS Property Law Section released the below information about red zone agreements and settlements.
Bulletin at a glance – updates from CERA:·
- An Update on Settlement Data
- Settlement Date Extension
- Vacant Possession
- GST Treatment for Insured Commercial Property
An Update on Settlement Data
We take this opportunity to thank you for the role you have played in the settlement process to date.
We are pleased to advise that as at 21 January 2013:
- 6495 property owners have signed a sale and purchase agreement (5411 of which have settled) out of 7190 property owners have received an offer letter.
- Of the 6495 property owners to sign a sale and purchase agreement to date:
o 1564 have chosen Option 1; and
o 4931 have chosen Option 2.
Settlement Date Extension
As previously advised, on 17 December 2012 an announcement was made confirming a one-off extension of up to 31 July 2013 for property owners who originally had until 30 April 2013 to settle with the Crown.
We take this opportunity to remind practitioners that if a client has already signed an agreement for sale and purchase and wishes to select a different settlement date (no later than 31 July 2013) they must actively seek an extension. You, as their solicitor, must submit a request for an extension to the Crown Settlement Agent.
For property owners who have not yet signed an agreement for sale and purchase the latest settlement date is now able to be selected is 31 July 2013.
Please note that the availability of this settlement date will be dependent on the level of demand from owners.
There is no change to the date by which property owners can accept the Crown offer. This remains at 12 months from the date of the offer letter, or until 31 March 2013 (whichever comes first). There is also no change to the timeframes for Southshore and the Port Hills.
Again, we wish to remind practitioners that the Crown offer requires vacant possession and this is non-negotiable.
As advised in our upgrade of 23 August 2012, settlement will be delayed if, prior to settlement, CERA becomes aware that vacant possession is unable to be provided by the vendor on the due date.
Please ensure that prior to accepting the Crown offer, your clients are aware of the implications of vacant possession including that, prior to settlement, the vendor must have removed all belongings from the property and has no further right of access once settlement has taken place.
We reiterate the importance of vacant possession for tenanted properties. Tenants must receive legally correct notice of termination under any tenancy agreement affecting the property. Whether a tenancy is periodic or fixed term, the settlement date must not be prior to either the expiry of the tenancy or the date of correct legal termination. We would be grateful if practitioners could be as involved as possible in the issuing of any termination notice to avoid situation where an incorrect notice has been given.
In addition, once notice has been given it is the Vendor’s responsibility to ensure that any Tenant has actually vacated the property prior to settlement.
GST Treatment for Insured Commercial Property
An amendment has been made to the Crown offer to purchase insured commercial properties located in the residential red zone.
The purchase price is now “plus GST (if any)”.
For further information, please contact firstname.lastname@example.org or 0800 7464 2372.