Timing of special conditions when purchasing a property

Property

We recently assisted a purchaser who was interested in buying an investment property in Auckland if it was asbestos free; unfortunately their agent didn't pay enough attention to the timeframes associated with the conditions on their agreement.

The vendor had disclosed that the property may have asbestos in the textured ceilings. The purchaser was clear that they only wanted to proceed if the property was asbestos free.

The vendor agreed to obtain a report on the presence of asbestos within 15 working days of the date of the agreement. If the report confirmed asbestos, the purchaser had three working days after receiving the report to cancel the agreement.

The purchaser also wanted the agreement to be subject to the standard due diligence, building report, finance and LIM report conditions. Unfortunately, the agent who prepared the agreement didn’t amend the standard timeframes for these conditions, giving the purchaser 15 working days from the date of the agreement to satisfy these conditions.

The purchasers did not want to incur the cost to undertake this work until they had confirmation that the property was asbestos free.

After negotiations, we amended the agreement so that the timeframes for satisfying the purchaser’s conditions ran from the date on which they received the asbestos report. As it happened, the property did contain asbestos and our purchaser client cancelled the agreement.

If you would like any advice surrounding property agreements, please contact our friendly Property team.

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