The old adage “more is less” can be quite true when putting together an offer on a property. The “more” conditions you have the “less” likely your offer may be accepted. However, with some clever drafting you can fit “more” conditions into “less” clauses.
Most agreements will have the usual finance, LIM Report, builders report and, the popular, methamphetamine test conditions included. These are the conditions which give a Purchaser most of the information about their chosen property to ensure they know what they are buying.
The standard Auckland District Law Society Agreement for Sale and Purchase has built in conditions and timeframes covering the requirement for a LIM Report and a builders report and the front page of the Agreement has space to add in the details of your finance condition.
When it comes to the requirement for specialist reports to be completed i.e. methamphetamine, then a condition has to be especially drafted and put into the Further Terms of Sale part of the agreement. In most cases this part of the agreement has already had various clauses regarding the receipt of copies of agents’ authorities and information about their complaints process etc added into it.
When you then start adding clauses for conditions the Agreement starts to look a bit “wordy” and, to the inexperienced eye of a Vendor, a bit scary.
A “due diligence” condition is a good way to bring all the conditions together into one clause and allows the Purchaser to complete all its investigations under one condition.
This kind of condition allows a Purchaser to obtain:
• A finance approval;
• LIM Report;
• Builders report;
• Methamphetamine testing;
• Other specialist reports, such as plumbing, electrical, pests i.e. borer;
• Valuation;
• Make enquiries of Council and other relevant authorities regarding further development of the property;
• Assess suitability of the property for potential business purposes;
• Schools and other learning facilities – daycare etc;
• Insurability of the property;
• Cladding investigations;
Any number of other enquiries can be made using a broad due diligence condition and its use is becoming popular as buyers become increasingly “more” aware of post settlement issues arising from “less” knowledge about what they are purchasing.
If you would like assistance in drafting a suitable due diligence condition for your purchase then feel free to give us a call at either our Waiuku or Pukekohe offices and we will be glad to help.
