House & Land packages are becoming increasingly popular amongst first home buyers due to the many advantages of buying a brand-new home and the price-point at which many are being sold. New builds mean no renovations or repairs required, less ongoing maintenance costs, and reduced power bills as compared to an existing home. Although there are many advantages, there are also limitations, as well as things to look out for when purchasing a House & Land package, so we’ve put together a list of common questions we get about House & Land Packages. Do I need a LIM for a new build? Generally, our clients opt to not obtain a LIM for a new home as the LIM will only show recorded details for the entire block of land before it was subdivided. However, if you want to obtain one from the local Council, it will tell you things such as the general state of the overall land, whether the property is in a tsunami zone, the resource consents in the area, among other things. Can I request changes to the plans? This will entirely depend on the developer. Some developers will allow you to make changes, or pick out your own paint colours, while others will not allow any changes at all (you may not even be able to change the door handles!). You should also be aware that often there are terms inserted into the Agreement saying that the vendor can make minor changes without letting you know, but they will need to request your approval if it is a major change. How is the Sale & Purchase Agreement for a House & Land Package different to an existing house? You will find that normally the contracts for House & Land Packages are the same as a regular S&P agreement – with a string of further terms and other attachments making the Agreement slightly longer. Normally these properties do not yet have Titles issued, and the build has either not started or is not complete. As a result of this, settlement is often protracted to allow time for titles to issue, for the build to be completed and to have Council sign off (in the form of a Code Compliance Certificate). In the attachments to the Agreement, you will usually find the plans of specifications of the house, as well as any specific rules that you must follow. You generally cannot check the title beforehand as they have often not issued, but the developer will often give you a draft copy of any covenants that are planning to be registered, which your lawyer can read through and advise you on. These covenants will often include restrictions as to what the property looks like, for example there may be rules such as washing lines may not be visible from the road, grass cannot exceed a certain length, or that you may not own certain dog breeds in the development. What is a sunset clause? A sunset clause is something that is set out in the Sale & Purchase Agreement that allows the vendor and/or purchaser to exit the contract if the Title hasn’t been issued by a set date. This protects the buyer to a certain extent so that they can back out if the build is going to take longer than expected. The developer can also give you an estimate date for completion, but these will generally come with caveats that allow them some room for delays. Do I need a building report for a new build? Most people would assume that as the property is brand new, that they do not need to obtain a building report. However, we always recommend that clients obtain a building report for new builds, as even though it’s new, we want to ensure the property has been built to the appropriate standards, and that there are no major issues prior to you moving in. Some examples of issues we have raised as a result of building reports for new builds: Joinery not installed correctly leaving gaps between the cabinets and the wall/floor Insulation not installed properly in roof spaces Wiring in roof spaces not fixed in place Paint or plaster defects Joinery missing screws (e.g. in sliding doors) Landscaping levels too close to exterior cladding Shower not draining correctly Incorrect windows installed not allowing sufficient ventilation to meet healthy home standards Once you obtain a building report and if there are any issues that you are not happy with, your lawyer can write to the vendors lawyer to request these are fixed prior to settlement. Looking to purchase a House & Land Package? Our team will make sure to read all the fine print so that you don’t have to! Get in touch with us today.
