Some of the words used when you are buying or selling a property may be unknown to you.
Cutting through the legalese and terminology
“A & I form”. This is an on-line form which authorises your lawyer to complete the sale or purchase transaction on your behalf in the Landonline on-line environment.
“Body Corporate”. Unit titled properties (e.g. apartments) have an administrative body which looks after the day to day management of common expenses such as insurance and maintenance.
“Bridging Finance”. A short term loan usually at a higher interest rate to cover a short period until alternative financing arrangements are put into place, often used in the period between buys one property and selling another.
“Caveat”. A document lodged in the land registry against a title to land which gives warning of a claim to an interest in a piece of land. A means of protecting a person’s interest in someone else’s land.
“Chattels”. Items not forming part of the property but intended to be included in the sale (e.g. stove, light fittings).
“Closed Tender”. A tender process when all tenders received are opened at the same time. The property cannot be sold prior to the time the tenders are opened.
“Conditions”. These are listed in your Agreement for Sale and Purchase and are matters which need to be satisfied before the parties are bound to complete the transaction.
“Conditional contract”. A contract with one or more conditions to be satisfied by the parties.
“Confirmation date”. The date on which all conditions in the contract must be satisfied.
“Cross-leases”. A type of ownership involving a combination of fee simple and leasehold interests. Typically small residential properties sharing driveways etc.
“Easement”. These are restrictions or entitlements attaching to the title to the property (e.g. right-of-way).
“Fee simple”. A freehold ownership of land, giving the owner the greatest rights to freely own and use the land.
“Leasehold estate”. A right to lease the land, not own it.
“LIM report”. A Council report covering the information they hold on the property.
“Listing Agreement”. An agreement signed between a vendor and a real estate agent which provides the contractual basis on which the agent will sell the property. The listing agreement will specify the commission which is to be paid.
“Memorandum of Encumbrance”. A restriction on the title similar to a mortgage often used as a means of recording covenants affecting use of the land.
“Mortgage”. The security you give the bank in return for the bank lending you money.
“OIA”. Overseas Investment Act, administered by Land Information New Zealand controlling investment in New Zealand assets by overseas persons. The rules need to be considered whenever an investment in property by an overseas person is proposed.
“Party Wall”. A wall shared by neighbours There will usually be a party wall easement covering the terms of the party wall arrangement such as obligations to maintain the wall.
“Possession date”. The day that you actually get the keys and can move in.
“Pre Settlement Inspection”. The purchaser is entitled to complete an inspection of the property prior to settlement. This inspection however must not take place on the day of settlement
“REINZ”. Real Estate Institute of New Zealand.
“RV”. Rateable value.
“Reserve”. The minimum price that a vendor will accept when selling a property by way of auction.
“Settlement date”. The day that you actually hand over all the money and get legal ownership of the land/property.
“Settlement Statement”. The statement prepared by the vendor’s solicitor and forwarded to the purchaser’s solicitor stipulating the amount to be paid by the purchaser on the day of settlement. This statement takes into account any deposit paid by the purchaser and also apportions the rates.
“Trust Account Statement”. The statement prepared by us and forwarded to you following completion of your transaction setting out all funds received into our trust account and paid out on your behalf.
“Unconditional contract”. A contract with no conditions to be satisfied by the parties – therefore it is immediately binding on the parties upon acceptance.
“Unit Title”. A type of property ownership (also known as a stratum estate). They are commonly used with apartments.