The New ADLS Agreement: A Guide for Homeowners and Buyers
The purchase or sale of a property is a significant event in anyone`s life. It`s an exciting and stressful time that comes with a lot of paperwork and legal jargon. One of the essential documents in this process is the Agreement for Sale and Purchase of Real Estate, which outlines the terms and conditions of the transaction. Previously, most lawyers and real estate agents used the Auckland District Law Society (ADLS) Agreement, which has been in use for over 100 years. However, in September 2019, ADLS released a new version of the agreement, which includes some essential changes that buyers and sellers should be aware of.
One of the main changes in the new ADLS agreement is the inclusion of the KiwiSaver clause. This clause outlines the process by which a buyer can withdraw their KiwiSaver funds to purchase a property. It also provides information on the eligibility criteria and the terms and conditions of using KiwiSaver for the purchase. This clause is particularly relevant to first-time homebuyers, who can use their KiwiSaver funds to help them enter the housing market.
Another significant change in the new ADLS agreement is the inclusion of the Insurance Clause. This clause requires the seller to maintain insurance on the property until settlement. It also requires the buyer to obtain insurance on the property from the date of possession. This clause reinforces the importance of property insurance and protects both parties in the event of any unforeseen incidents.
The new ADLS agreement also includes a new clause on the Overseas Investment Act. This clause outlines the process by which a buyer can obtain Overseas Investment Office (OIO) approval to purchase a property. This approval is required if the property is considered “sensitive land” under the Overseas Investment Act. This clause is particularly relevant to overseas buyers or New Zealand buyers who have been living overseas for an extended period.
Finally, the new ADLS agreement includes changes to the GST clause. This clause outlines the GST implications of the transaction, particularly for commercial properties. It provides valuable information on when GST is payable and how it can be claimed back, ensuring that both parties are aware of their tax obligations.
In conclusion, the new ADLS agreement includes some essential changes that buyers and sellers should be aware of. The KiwiSaver clause, Insurance Clause, Overseas Investment Act clause, and GST clause all provide valuable information and protection for both parties involved in the transaction. It`s essential to work with a lawyer or real estate agent who is familiar with the new ADLS agreement and can provide guidance and advice throughout the process.