Selling your house is exciting – but it can also be stressful if you're not prepared. Getting the legal side of things right from the start will save you time, money, and potential headaches down the track. Here's what you need to check before you put up that "For Sale" sign.
1. Do you have a clear title?
This might sound obvious, but you need to make sure you actually own the property free and clear, or at least understand what encumbrances exist. Check your property title at Land Information New Zealand (LINZ) to confirm there are no unexpected surprises like caveats, mortgages that should have been discharged, or other interests registered against your property.
If there are issues with your title, you'll need to sort them out before settlement. Buyers won't settle if the title isn't clear, and discovering problems at the last minute can delay or even kill a sale.
2. Are there existing tenancies?
If you're selling a rental property with tenants in place, you need to be upfront about this. The Residential Tenancies Act 1986 provides tenants with significant protections, and their tenancy generally continues even after the property is sold – unless you've given proper notice.
If you want to sell with vacant possession, you'll need to give your tenants the required notice period (usually 90 days) and have a valid reason for ending the tenancy. Getting this wrong can lead to disputes at the Tenancy Tribunal and potentially derail your sale.
3. What about building consents and code compliance certificates?
This is a big one. If you've done any building work on your property – extensions, renovations, even decks or sleepouts – you need to make sure the proper building consents were obtained and that you have code compliance certificates (CCCs).
Buyers will ask about this, and their lawyers definitely will. Missing consents or CCCs can significantly reduce your property's value and sometimes even make it unsellable. If you've done work without consent, you may need to apply for retrospective consent or provide an engineer's report. Either way, it's better to sort this out before you list the property rather than during negotiations.
4. Have you obtained a LIM report?
A Land Information Memorandum (LIM) report from your local council provides important information about your property, including:
- Building consents and inspections
- Rates and charges
- Resource consents
- Flooding or erosion risks
- Contaminated land records
- Property files and correspondence with the council
While buyers usually obtain their own LIM, getting one yourself before listing helps you identify and address any issues upfront. It's much better to know about problems early than to be blindsided during the due diligence period.
5. Are there any resource consent issues?
Have you made changes to your property that might have required resource consent? Perhaps you've subdivided, changed the use of the land, or built something that affects the environment. Like building consents, resource consent issues need to be disclosed and resolved.
Check with your council if you're unsure whether your activities require resource consent. Undisclosed resource consent breaches can give buyers grounds to cancel the contract or seek compensation.
6. Do you need to disclose defects?
Under New Zealand law, you must disclose any defects you're aware of that could materially affect the buyer's decision to purchase or the price they're willing to pay. This isn't just about being honest – it's a legal requirement.
"Material defects" can include things like:
- Leaks or water damage
- Structural issues
- Pest infestations
- Flooding history
- Boundary disputes
- Problem neighbours
If in doubt, disclose it.
7. Are there any chattels to clarify?
Make a clear list of what's included in the sale and what's not. That fancy light fitting you're planning to take with you? Better specify it's excluded. The buyer assumes that fixed items stay with the property unless you say otherwise.
Common items that cause disputes include:
- Light fittings and ceiling fans
- Window treatments (blinds and curtains)
- Garden sheds and outdoor furniture
- Heat pumps and fire surrounds
- Dishwashers and rangehoods
Being specific in the sale and purchase agreement prevents arguments at settlement.
8. Have you checked your mortgage situation?
Contact your bank to find out:
- Your exact mortgage balance
- Any break fees if you have a fixed-term loan
- The process for discharging your mortgage at settlement
Some fixed-term mortgages come with significant break fees, which can eat into your sale proceeds. Knowing these costs upfront helps you plan and price your property appropriately.
Selling property involves significant legal and financial consequences. Our experienced property team can guide you through the process, identify potential issues early, and ensure your sale goes smoothly.
Don't wait until problems arise – get in touch with us today to discuss your property sale and make sure everything is in order before you list.