Your lawyer’s job is to protect you by checking contracts, explaining your rights, and making sure the property’s title is in order. They also do the legal work to transfer the property to you (the conveyancing) and register your mortgage on the property title.
They’ll provide advice on things like different ways to own the property (for example as joint tenants), negotiating the price and things you need in your sale and purchase agreement.
They may also help with arrangements for your loan and insurance. And they’ll probably suggest you make a new Will and Enduring ower of Attorney, so your affairs are in good order if something happens to you.
Before you make an offer
You should always seek a lawyer’s advice before you make an offer to buy a home.
They can help you by
- checking the sale and purchase agreement, auction or tender documents
- making sure you have the right conditions in your offer to protect you
- arranging valuations and reports
- advising you on ownership matters and any legal issues
- providing advice on negotiating the price.
If you’re buying at auction or wanting to make an unconditional tender, your lawyer will need to do all the legal checks first, such as checking the title and LIM report.
When your offer is accepted
Once your offer is accepted your lawyer makes sure the conditions in your agreement are met and starts doing the legal work to transfer the property to your name.
The transfer is done electronically using Landonline (the electronic dealing system of LINZ, Land Information New Zealand). Your lawyer signs online on your behalf, so they will ask you to sign a form giving them authority to act for you.
At this stage their job usually includes
- checking the title for any ownership restrictions
- checking the LIM for things like consents, and potential problems
- checking local authority plans to see if any major changes are likely
- checking all the conditions in your agreement are met
- preparing the authority form for you to sign and confirming your identity so they can act on your behalf
- setting things up in Landonline – a lot of the legal work is done in advance
- explaining your loan agreement to you and arranging the mortgage
- checking rates and other costs are paid up to date
- making arrangements with you and the bank for payment of your loan and your share of the purchase price.
Your lawyer will also check the property is insured – this is a condition of your home loan. We can arrange all your insurances when you apply for your loan.
You should never sign an offer or any legal document without asking your lawyer to check it first.
Do a final check
Before settlement day it’s a good idea to do a final check to make sure
- the property is still in the same order
- any agreed repairs have been done
- everything you’ve bought is still there.
If there’s a problem, talk to your lawyer before everything becomes final.
On settlement day
On settlement day your lawyer works to settle the deal and does the transfer of ownership.
This work includes
- doing a guaranteed title search
- liaising with the seller’s lawyer to make sure you receive a clear title
- paying the money to the seller’s lawyer
- ensuring the seller’s lawyer does their side of the electronic dealing
- completing the transfer using Landonline
- final details such as where you get the keys and when you can move in!
The money paid on settlement day takes into account the deposit you’ve already paid on the home to the real estate agent.
After settlement the lawyer will
- register the new mortgage and the transfer of the title
- provide you with a statement showing all the purchase details
- send a copy of the title, mortgage and certificate of insurance to your lender
- give you a copy of the title showing you registered as the new owner.
Are you buying with someone else?
There are two main ways of sharing the ownership of a home. You can have a joint tenancy where you own the home together and if one person dies the others take over the ownership – this is the way most couples own a home together. Or you can have a tenancy in common, where you each own a share and can leave your share to anyone you wish in your Will – this is more common when there are several owners. Another option is a property sharing agreement. Your lawyer will advise you on the best way to set things up for your situation.
What types of ownership are there?
Most people buy a freehold home, but there are quite a few different ways to own a home.
Freehold – this is the most common type of ownership. It means you own the land and house with virtually no restrictions on your ownership rights. The term freehold is also commonly used to mean that you don’t owe any money on the home.
Leasehold – with this type of ownership you lease the land and pay rent to the landowner. You own the house but your use of the land may be restricted, and the rent can go up. You can sell the lease if you want to move, but you may need to tell the landowner first.
Cross-lease – this is where there are several homes on a piece of land and all the owners own the land together. Each owner leases the land their home is on from the others for a small cost.
Unit title – you own or lease your unit but common areas (like stairways and parking) are managed by the body corporate.
Company title – if you buy a flat with company title, you buy ‘shares’ that give you the right to live there. The company administers and maintains the block of flats.
Licence to occupy – with this type of ownership you don’t actually own the land or buildings, but you have a right to live there for life. This is the most common type of ownership for retirement villages.