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Acceptance: Consent by the person receiving the offer to be bound by the terms and conditions of the person making the offer. Acceptance of an offer constitutes an agreement.
Agreement: The written contract for the sale and purchase of property between the seller (vendor) and the buyer (purchaser).
Appraisal: A written analysis of the estimated value of a property prepared by a qualified appraiser.
Appraiser/Valuer: A person qualified by education, training and experience to estimate the value of real property and personal property. You can tell someone is accredited in NZ with the “B Prop” or “Dip Valuation” after their name.
Auction: A public sale of a property or real estate that is sold to the highest bidder when the owner’s reserve is reached.
Caveat: A warning on a title to a purchaser that a third party might have some interest or right in the property.
Certificate of Title: A description of a property with the name of the registered owner, encumbrance i.e. mortgages and/or easements on the property. It must be produced by the vendor before the sale of the property.
Chattels: Moveable and removable items of personal property. In real estate transactions for the sale of homes this usually includes the stove, television aerials, carpets, blinds, curtains, drapes and light fittings. Unless chattels are specified in the agreement, they are not sold as part of the property.
Conditions: (Special Conditions in a Sale And Purchase Agreement):
Conditional upon a Specialist Report
Conditional upon the sale of the purchaser’s property
Conditional upon an existing agreement
Conditional upon a LIM report
Condititonal upon Finance
Conditional Agreement: This is a legally binding contract, but it is subject to conditions being satisfied, usually by the purchaser. The conditions will be detailed in the agreement and may, for example, require that you are able to sell your existing home by a set date or to arrange finance by a certain date. Conditions can also be included by the purchaser that require the seller to do something by a specified date – for example, that settlement will take place only on the conditions that the house is painted, the windows repaired or that rubbish around the section is removed. Note: Purchasers’ conditions usually do not prevent the sale taking place, but may allow the purchaser to delay settlement without penalty or claim damages if the conditions are not met in time.
Covenant: Terms, conditions and restrictions noted on the title. A covenant may affect future plans or resale of the property.
Deposit: A percentage of the purchase price given to bind the sale of real estate.
Easement: A right that someone has to use the land belonging to another eg: a water or sewerage easement across part of your property.
Freehold: An estate in fee simple, which continues for an indefinite period of time.
Lessee: A person leasing a property.
Lessor: The owner of a property that is leased to another person.
LIM Report: (Land Information Memorandum). A LIM is a report prepared by the local Council at your request. It provides a summary of property information held by the Council as at the day the LIM was produced.
A LIM provides some or all of the following:
- Information on special land features or characteristics including potential erosion, avulsion (removal of land by water action), falling debris, subsidence, slippage, alluvium (the deposit of silt from flooding),inundation (flooding), presence of hazardous contaminants which are likely to be relevant to land and is known to the Local Council.
- Information on private and public stormwater and sewerage drains as shown in the Local Council records.
- Information relating to any rates owing in relation to the land.
- Details of approved building, plumbing/drainage and resource planning permits and consents indicating where further action is required.
- As required by the Building Act 1991 details are included of:
- Code Compliance Certificates: a final certificate of approval for building consents.
- Compliance Schedule: required for certain systems or features of commercial and multi-residential properties.
- Warrant/Statement of Fitness: in conjunction with compliance schedule – issued annually to maintain compliance standards.
- Details of Dangerous Goods, Liquor, hairdressing and Health Licences (mainly refers to commercial properties).
- Details of Operative and proposed zoning, road widening, height restrictions, view and tree protection, and any Historic Places Trust listing.
- Any outstanding requisitions or notifications from the Local Council regarding any matters on that property that do not meet the Local Council specifications and which require action within a certain time frame. Satisfying requisitions is the responsibility of the owner of the property.
- The Memorandum may also include: Such other information concerning the land which the Local Council considers, at its discretion, to be relevant.
Listing: A written contract between an owner and a real estate company, authorizing the salesperson to perform services for the principal involving the owner’s property. The property so listed.
Market value: The price at which a seller is happy to sell and a buyer is willing to buy. This assumes that there is sufficient activity in the market place to generate enough buyers and sellers so that neither party controls the price. Establishing the market value is the objective of an appraisal.
Nominee: A person who, in a limited sense, acts for or represents another.
Offer: Conveyed intent by one party to form a contract, which may have conditions and stipulations, with another party.
PIM (Project Information Memorandum): A report giving information on items such as potential erosion, subsidence, hazardous contaminants, stormwater. It may also include classifications under organisations such as the Dept. of Conservation or Historic Places Trust, as well as authorizations required by the Resource Management Act.
POA: A pricing method used by some Real Estate companies, meaning Price On Application.
Real Estate Agent: A person or Company licensed to negotiate and transact the sale or lease of real estate on behalf of the property owner.
REINZ: Real Estate Institute of New Zealand. National representation body of real estate agents.
Resource Consents: Resource consents are necessary when a group or individual wishes to carry out an activity or development that may have some effect on the environment. Resource consents relate directly to the rules set out in the District or Regional Plans and the Resource Management Act and are different to Building Consents.
Right of Way: A right of one property or the general public for access to or across another property.
Settlement date: The day the sale of a property is finalised by the legal representatives of the vendor and buyer and mortgage documents come into effect, costs are paid and the new owner takes possession of the property.
Special condition: A condition that must be met before the contract is legally binding. For example, if buying a home the purchaser may specify that the contract is not legally binding until the purchaser has obtained a building inspection and been satisfied by the report.
Survey: A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.
Tenants in Common: A type of joint tenancy in a property where two or more purchasers own a property in unequal shares. If one dies, his or her shares pass to his or her beneficiaries under the terms of the will. The shares can be sold without consultation of the other owners.
Title: A legal document evidencing a person’s right to or ownership of a property.
Title search: A check of the title records to ensure that the seller is the legal owner of the property and there are no other claims or outstanding permits.
Transfer: A document registered at the Land Titles Office and noted on the Certificate of Title which verifies the change of ownership of a property.
Trustee: A person who holds or controls property for the benefit of another.
Unconditional agreement: The legal contract that binds both the purchaser and the seller to settle on the specified date and for the specified price. It is either not subject to any conditions or those conditions have been satisfied.
Valuation: A written analysis of the estimated value of a property prepared by a qualified and registered valuer. The bank often requires a Registered Valuation as a condition of granting a loan to a buyer.
Zoning: Local authority guidelines for the permitted use of land.