Property Law Terms Guide
Buying or selling a home can feel like learning a new language. Here is a plain-English guide to some of the most common terms you may come across during the purchase process.
Agreement for Sale and Purchase
The standard contract used when buying or selling property in New Zealand.
Conditions
The things that must happen before the contract goes ahead, such as the purchaser obtaining finance. (Strictly speaking, all contract terms are conditions, but in practice people often use the word to mean the key matters that need to happen first.)
Conditional offer
An offer that proceeds only if certain conditions are met, such as finance approval or a satisfactory building report. You will often hear this described as being ‘subject to finance’ or ‘subject to’ whatever conditions are listed in the agreement.
Unconditional
When all conditions have been satisfied or waived, and the sale is locked in.
Deposit
The initial payment, often 10%, usually paid once the agreement goes unconditional.
The word ‘deposit’ is also commonly used to describe your own cash contribution to the purchase (as distinct from the amount you are borrowing). When lawyers or real estate agents refer to ‘the deposit’, they generally mean the initial payment set out in the agreement.
Settlement
The day the balance of the purchase price is paid and ownership is transferred. This is usually when you move in and the property becomes yours.
LIM (Land Information Memorandum)
A report from the local council showing information about the property, such as consents, zoning, and any hazards the council is aware of.
Title
The legal record of who owns the property and what type of ownership applies.
Freehold title (also known as fee simple)
The most common ownership type. You own the land and the buildings outright.
Cross lease title
Where two or more homes share a single piece of land. The owners each own a share of the land and lease their part from all of the co-owners.
Unit title
Often used for apartments and townhouses, where you own your unit and share ownership of common areas.
Purchase price
The total price agreed for the property.
Building report
An inspection report prepared by a qualified builder or inspector outlining the condition of the property.
Conveyancing
The legal process of transferring ownership of property from the seller to the buyer.
Vendor
The person selling the property.
Purchaser
The person buying the property.
Chattels
Items included in the sale, such as curtains, appliances, or light fittings.
Fixture
Anything attached to the land. For example, a garden shed may be a fixture if it is fixed to a concrete foundation, but a chattel if it is simply sitting on the ground.
Generally, fixtures are included as part of the land purchase, while chattels are included only if they are listed in the agreement.
Mortgage
The security a bank takes over your home to protect itself if the loan is not repaid.
Loan
Money borrowed (often from a bank) to help fund the purchase.
KiwiSaver
Retirement savings that eligible buyers may be able to use towards their first home purchase.
Joint tenants
Where two or more people own a property together, and ownership automatically passes to the other owner(s) if one dies.
Tenants in common
Where two or more people own a property together, but each person’s share can be left to someone else in their will.
Still have questions?
The Tim Holton Law team is here to help guide you through each step of your property journey.
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