• Cavell Leitch

COVID -19 – buying and selling property during Alert Level 3

David Fitchett and Courtney McHugh - Property


New Zealand moves to Alert Level 3 on April 28 and this will relax a few of the previous limitations on how properties can be bought and sold. In this article we answer several common questions as to how buying and selling properties works during Alert Level 3.


Can a property be marketed for sale during Alert Level 3?


Yes, real estate agents are allowed to start operating again under Alert Level 3. Agents will not be able to open their offices to clients or the public, however in many cases much of the sale and purchase process can be carried out remotely as we will discuss below.


Trademe Property also intends to allow new private listings to be advertised under Level 3. However, it is currently unclear how properties could be physically inspected during Level 3 (please refer to our section on open homes below).


Are open homes allowed under Alert Level 3?


Agents are not allowed to run open homes under Alert Level 3, however the Government announced on 22 April 2020 that private viewings by appointment will be allowed.


At the time of this article’s publication the actual detail of how private viewings will operate is still being worked through. We suspect that it will involve any prospective purchaser being required to follow strict hygiene and social distancing rules when viewing a home e.g. only one person may be allowed to view the home at any time, and that person will be directed to wash their hands before and afterwards and refrain from touching surfaces.


Will auctions be running under Alert Level 3?


Prospective buyers will not be allowed to attend auctions in person, however real estate agents have signalled their intention to run auctions virtually via online video or phone.

Sellers will also have other options instead of auctions such as deadline sales, price by negotiation and offer and acceptance via pricing a property.


How can sale and purchase agreements be signed under Alert Level 3?


Face to face meetings are not allowed under Alert Level 3, and so any contracts will need to be signed remotely. The real estate agent or your lawyer at Cavell Leitch will be able to present you with a number of options which allow you to sign the necessary documents from the comfort of your own home.


For example, the ability of couriers to take on ‘non-essential’ business under Level 3 presents another option for clients who don’t have access to a printer or scanner at home.


Can contracts go unconditional under Alert Level 3?


Cavell Leitch will still be able to order copies of the title documents and the Council’s LIM report during all Alert Level stages and then review these for you. We won’t be able to meet with you face to face, but we can email our reports to you and also discuss our findings by phone or video calls.


Banks and insurers also remain operating during all Alert Levels and are able to process finance and insurance applications. Due to the current circumstances it may be that applications take a little longer to process than they would normally, so please talk to the agent and your lawyer about making sure you allow yourself enough time.


It is important to note however, that purchasers who are new customers of a bank may not be able to obtain loan documents until they are able to have a face to face meeting with their bank. They can still progress their finance application, however banks have advised that they will not send loan documents to lawyers until that face to face meeting has happened. Builders, valuers and other experts are also allowed to attend properties to undertake building and contamination inspections under Alert Level 3 if they follow strict hygiene and social distancing requirements.


Builders, electricians, plumbers and the like will also be able to undertake work provided they comply with the same requirements.


Can I move homes under Alert Level 3?


While moving homes was not permitted under Alert Level 4, shifting houses is now allowed under Alert Level 3, provided you are undertaking a ‘permanent’ move (i.e. going to stay with some friends for a few weeks is still not allowed). You are also allowed to move between regions as required.


Moving companies will also be allowed to start operating under Alert Level 3.


Can property settlements be completed under Alert Level 3?


Settlements can be completed under Alert Level 3. Pre-settlement inspections will also be able to occur, although the actual detail as to how inspections will take place is still being clarified as discussed above.


Any documents necessary for settlement will need to be signed remotely as physical meetings with your lawyer and bank are still not allowed under Level 3. Cavell Leitch has established several workarounds during the lockdown, and we can discuss which options will suit you best. For example, the ability of couriers to take on ‘non-essential’ business under Level 3 present another option for clients who don’t have access to a printer or scanner at home.


We are aware that the timeframes for settlement may have been delayed under some current contracts until New Zealand reverts to Alert Level 2. If your contract is affected in this way, then please get in touch with your contact in Cavell Leitch’s property team. Now that we all know that moving house is permitted under Level 3 there may be some scope to bring settlements forward.


Can I cancel my contract if my circumstances have changed?


We appreciate that people’s circumstances may have changed. Perhaps your budget has tightened and a move to a new home is no longer practical. Whether or not you are able to cancel your contract will depend on the specific circumstances. We would need to review your situation and provide you with specific advice so please contact us.


Generally speaking, if an agreement is unconditional then you will not have a legal right to cancel the contract. In fact, the vendor may have rights to retain your deposit, and sue you for the remainder of the purchase price as well as their costs.

It is possible that a practical agreement could be reached nonetheless. We can assist you in having these discussions.

Our advice for now:


Over the past weeks Cavell Leitch experts have assisted both vendors and purchasers (as well as agents) with their queries about buying and selling. New Zealand’s property market is moving into an interesting period where there will be opportunities but also complexities for buyers and sellers to overcome.


We have also amassed a detailed knowledge of the trends that have developed in the marketplace, and are ready to assist you with your specific situation. Please contact the writers or a member of Cavell Leitch’s property team for assistance.


Disclaimer: as this is an ever-evolving situation, our summary of the legal position is subject to change. For updates please contact the writers or a member of Cavell Leitch’s property team.

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