Sale and Purchase

The two principal types of sale and purchase with which you may become involved are:

  • sale and purchase of residential or commercial real estate; and
  • sale and purchase of a business.

Real Estate

In New Zealand, a real estate agent (realtor) acts for the vendor. It is the vendor's best interests which the real estate agent must keep at the forefront of their mind when interacting with a purchaser. Consequently, if you are moving to Aotearoa, and are considering purchasing property, it is especially important for you to engage a solicitor to act for you.

Rennie Cox can advise you on various matter before you sign any contract. Remember, a Sale and Purchase Agreement is binding upon you (sometimes, even when you think that you have inserted 'pull out' clauses relating to building inspection and finance). Obtain advice before you commit to anything.

Remember also that where no time is set down in your offer for acceptance of your offer, your offer usually stays open until it is accepted by the vendor, the vendor makes a counter-offer, or it is revoked by you (and you communicate that revocation to the vendor) - whichever comes first. On no account make another offer to a second vendor until you have terminated your first offer. Otherwise, you could be in the invidious position of being potentially compelled to purchase both properties!

There are many issues to take into consideration when purchasing a residential (or commercial) property. However, we advise that you always obtain a Land Information Memorandum (LIM) from the local authority. A LIM can provide you with a wealth of information (depending upon the particular local authority involved, and how comprehensive their LIM documentation is), but at the very least it should identify any hazards affecting your proposed purchase. Consider paying a little more, and requesting an urgent LIM. If the LIM shows up an unacceptable hazard, you can save money on having a building (and perhaps electrical) inspection performed.

Talk to Rennie Cox well before you start your search for a property. We can orientate you to the New Zealand purchasing environment, and identify legal issues for you so that you are better-armed for negotiation.

Business

You may need to consider the Overseas Investment Act 2005. The Overseas Investment Office (OIO) assesses applications from overseas persons who intend investing in sensitive New Zealand assets.

You may need to consider the Overseas Investment Act 2005. The Overseas Investment Office (OIO) assesses applications from overseas persons who intend investing in sensitive New Zealand assets.

  • sensitive land or an interest in sensitive land (e.g. by buying shares in a company that owns sensitive land), or
  • business assets worth more than $100 million, or
  • fishing quota or an interest in fishing quota.

You are an overseas person if you are neither a New Zealand citizen, nor ordinarily resident in New Zealand. A company, a partnership, a joint venture or a trust can also be an overseas person. You will also require consent if you are an associate of an overseas person. You will require expert legal advice to know whether you or the entity that is going to acquire the sensitive assets is an overseas person or an associate of an overseas person.

Even if you do not require advice in relation to the OIO, the purchase (and sale) requires careful legal scrutiny and advice. If you are purchasing a New Zealand business, you must establish whether you will inherit staff pursuant to Part 6A Employment Relations Act 2000 and liability for payment of holiday pay or redundancy (note any inherited liability pursuant to section 69J(2)(iii)Employment Relations Act 2000).

Additionally, Middle Earth has an unusual legal framework surrounding workplace accidents and compensation. New Zealand has been a leader in intervening, legislatively, to recognise, and mitigate the impact on society and individuals of, the social and financial consequences of accidents.

Purpose of the Accident Compensation Act 2001

The purpose of this Act is to enhance the public good and reinforce the social contract represented by the first accident compensation scheme by providing for a fair and sustainable scheme for managing personal injury that has, as its overriding goals, minimising both the overall incidence of injury in the community, and the impact of injury on the community (including economic, social, and personal costs), through:

  1. establishing as a primary function of the Corporation the promotion of measures to reduce the incidence and severity of personal injury:
  2. providing for a framework for the collection, co-ordination, and analysis of injury-related information:
  3. ensuring that, where injuries occur, the Corporation's primary focus should be on rehabilitation with the goal of achieving an appropriate quality of life through the provision of entitlements that restores to the maximum practicable extent a claimant's health, independence, and participation:
  4. ensuring that, during their rehabilitation, claimants receive fair compensation for loss from injury, including fair determination of weekly compensation and, where appropriate, lump sums for permanent impairment:
  5. ensuring positive claimant interactions with the Corporation through the development and operation of a Code of ACC Claimants' Rights:
  6. ensuring that persons who suffered personal injuries before the commencement of this Act continue to receive entitlements where appropriate.

Note that you will be liable for payment of ACC levies for staff employed by you. ACC WorkPlace Cover levies pay for the current and future costs of work-related injury claims that occur in the levy year – 1 April to 31 March. Not everyone pays the same rate for their levies, and the rates may change from year to year.

These and many other elements of the New Zealand legal framework surrounding business operation mean that the sooner you talk to Rennie Cox, the sooner you can come to grips with what you need to do to operate a business both successfully and legally within New Zealand.