Changes to ADLS Agreement for Sale and Purchase: What you need to know
The ADLS Agreement for Sale and Purchase has been a standard document used in New Zealand`s real estate industry for many years. However, recent changes to this agreement have significant implications for both buyers and sellers. In this article, we will discuss the key changes and what they mean for you.
1. Amendments to the GST clause:
The revised agreement includes a revised GST clause that provides greater clarity and certainty around the payment of GST. The existing clause had caused confusion in some situations, particularly where the sale of the property involved both a residential and commercial component.
The new clause requires the seller to provide a GST statement at settlement, outlining the GST treatment of the sale. This will help to avoid disputes between the parties and ensure that GST is paid correctly.
2. Changes to the deposit clause:
The deposit clause has also been amended in the revised agreement. The new clause allows for the payment of the deposit to be made electronically, in addition to the traditional method of payment by cheque.
This change reflects the growing use of electronic payment methods and will make the process more convenient for both parties. It is important to note that the new clause also allows for the parties to agree to an alternative method of payment, such as a bank guarantee.
3. Obligations of the parties:
The revised agreement now includes a new clause that sets out the obligations of the parties in relation to compliance with the Overseas Investment Act 2005 (OIA). This is particularly relevant for overseas buyers, who must comply with the OIA when purchasing certain types of property in New Zealand.
The new clause requires the parties to comply with the OIA and provides for the cancellation of the agreement if the buyer fails to obtain consent under the Act. This is an important change that helps to ensure compliance with New Zealand`s foreign investment rules.
4. Changes to the settlement date:
The settlement date is a critical component of any property transaction, and the revised agreement includes some changes to this clause. The new clause provides greater flexibility in relation to the settlement date, allowing the parties to agree on a specific date or range of dates.
This change reflects the fact that property transactions can be complex and may involve multiple parties and factors that can impact the timing of settlement. The new clause allows for greater clarity and certainty around the settlement process.
In conclusion, the revised ADLS Agreement for Sale and Purchase includes several important changes that will impact both buyers and sellers. These changes provide greater clarity and certainty around key aspects of the property transaction process and reflect the changing nature of the real estate industry in New Zealand. If you are planning to buy or sell a property, it is important to work with an experienced real estate professional who understands these changes and can guide you through the process.