Vendor Warranties

Looking at selling your home and wondering about the renovations you had completed, or the information the neighbour gave you last week to get your consent to open a cattery, does it matter that the dishwasher is playing up and you just remembered the heat pump is still being paid off on your Q card….Do these situations even matter?

Within the Agreement for the Sale and Purchase of Real Estate Tenth Edition 2019(2) there are vendor warranties which are included to provide some security to purchasers regarding the property they are purchasing.  If the situation turns out to be different to that warranted by the vendor, the purchaser will be able to claim damages (and cancel if the breach is serious enough).  

As the vendor at the date of the agreement you warrant you have not received any notices, demands, consents and waivers.

💡The consent for the cattery will need to be disclosed to potential purchasers.

Additionally, as the vendor that you have no knowledge of proceedings by or against you or that could be against the proposed purchaser in relation to the property.

At the date of settlement, as the vendor you warrant and promise the chattels included in the agreement and all plant, equipment, systems or devices which provide any services or amenities to the property are delivered to the purchaser in reasonable working order. 

💡The dishwasher is broken, and I am not intending to purchase a new one to give to the new owners.

The agreement also states vendors warrant all electrical and other installations free of charges as are the chattels within the chattels list.

💡The Q Card! I will need to organise paying the heat pump off.

Part of the settlement agreement is all rates, water rates and other targeted rate charges, for example a retro fit scheme are paid in full to settlement date.

As the vendor, if you have done work or have permitted work to be done (by your contractors) you need to confirm these works are consented and completed in compliance with the consent and appropriate certificates issued for the works. 

💡I had better check with my friend Tom the builder, that the building works we had done were all compliant.

Where the property has a ‘specified system’ for example a lift, or if the property is a unit title, there are further warrantees the vendor must give.

Another warranty is since the signing of the agreement you have not given any consent or waiver or received any notice or demand that directly or indirectly affects the property.

There are additional warranties to GST (if applicable) and promises as to actions you will take after settlement.

This is why it is so important before putting your property on the market or signing an agreement to sell your property, that you have read and understood the warranties and undertakings you are making to potential purchasers, as getting it wrong can be costly.

We have included clause 7.0 of the latest Agreement for the Sale and Purchase of Real Estate Tenth Edition 2019(2) for you to peruse.

Additionally, we would be happy to discuss your particular property and any further disclosure you may need to add to any agreement to sell.

Jo Shannon is the founder of Nest legal & conveyancing. A Conveyancing Practitioner Jo lives with her family in the beautiful Bay of Plenty. Apart from all things property, Jo also loves perma-culture gardening, walking round the Mount and nice wine.