You all know (hopefully!) that the publication of the 10th edition of the ADLS/REINZ sales contract last year made substantial changes to the terms of the contract. REINZ says in the previous edition that if a financing condition is inserted into a sales contract and the buyer cannot receive financing, his word is usually good enough for a person to withdraw from a contract. The standard form agreement (both the previous edition and the new 10th edition) contains an explicit and general obligation for the buyer to do all things reasonably necessary to meet the buyer`s conditions (including financing conditions). However, if a seller suspected in the past that a buyer had not taken all reasonable steps to obtain financing, the seller could assert that the buyer had breached its obligations and require that the buyer have evidence to support the valid termination of the contract under the financing condition. However, if this information is not available, the seller should bring an action against the buyer for violating this general provision. The new wording provides the seller with a clear and explicit procedure to ensure that the buyer complies with its general obligations under the contract. The 10th edition introduced a standard requirement for toxicological reports. If the toxicological report was tested for methamphetamine, it had to be prepared in accordance with New Zealand Standard 8510:2017. This requirement has been removed and the report only has to be written “in good faith by a duly qualified inspector, using recognized principles and methods”.
Signed agreements are not affected by this amendment. Only the new agreements introduced in the new 10th edition of the form of the agreement. Both of these expenses will be on the market for some time. There are a number of important changes in the latest issue, which involve additional changes/requirements regarding: ReinZ says however that after the changes to the financing condition, buyers must now prove if they cannot receive financing. Proof can be a letter or email from the buyer`s bank that confirms that financing has been refused….