LEVEL 8, 203 QUEEN ST

AUCKLAND, NEW ZEALAND

P O BOX 6908, WELLESLEY ST

DX CP24080

TELEPHONE 0-9-970 8810

FACSIMILE 0-9-970 8820

A SAMPLING OF SPECIAL CONDITIONS FOR

RESIDENTIAL REAL ESTATE CONTRACTS

Marcus N Beveridge / Yee Lin Leong

Principal Senior Associate

QUEEN CITY LAW

Level 8, 203 Queen Street Auckland, New Zealand P O Box 6908, Wellesley Street Dx Cp24080 Telephone 0-9-970 8810 Facsimile 0-9-970 8820 Mobile: 0274 877 332 Email: marcus@queencitylaw.co.nz Email: yeelin@queencitylaw.co.nz

ACCESS

BACK-UP CLAUSE

BUILDING INSPECTION

CASH-OUT CLAUSE

COLLATERAL CONTRACT

FAX EXECUTION

IRREVOCABLE OFFER

LAND INFORMATION MEMORANDUM AND RESOURCE MANAGEMENT ACT 1991

LOWEST PRICE

SALE SUBJECT TO VENDOR’S PURCHASE

RESOURCE MANAGEMENT ACT 1991

PURCHASER TO ARRANGE UNCONDITIONAL SALE

PURCHASER’S SALE AGREEMENT BECOMING UNCONDITIONAL

PURCHASER’S SALE AGREEMENT SETTLING

EARLY SETTLEMENT

PURCHASER’S SOLICITOR’S APPROVAL

TRUSTEE LIMITATION OF LIABILITY

SUBJECT TO VALUATION

VENDOR MORTGAGE

1. ACCESS

1.1 The purchaser (and the purchaser’s consultants, agents and workmen) may enter on to the property before the settlement date and remain there for any reasonable time to carry out all assessments and investigations which the purchaser needs to be able to satisfy the condition contained in clause [1=no. of clause containing condition referred to].

1.2 In exercising the purchaser’s right of access the purchaser will:

1.2.1 give the vendor reasonable before each of the purchaser’s visits;

1.2.2 cause as little inconvenience as possible to any occupier of the property; and

1.2.3 promptly repair at the purchaser’s own expense any damage which purchaser does to the property.

1. BACK-UP CLAUSE

1.1 This agreement is conditional on the contract dated [1=date of earlier contract] between the vendor and [2=name of other purchaser] for the sale and purchase of the property (“earlier contract”):

1.1.1 not becoming unconditional; and

1.1.2 being cancelled.

1.2 If the earlier contract has not become unconditional and as not been cancelled by [3=unconditional date specified in earlier contract] the vendor will take all steps necessary to cancel the earlier contract as soon as is reasonably possible after the vendor has the right to do so.

1.3 The vendor will not agree to or otherwise give any extension of time for the satisfaction of the condition(s) in the earlier contract.

1.4 If the earlier contract becomes unconditional:

1.4.1 the vendor will immediately give written notice to the purchaser that the earlier contract has become unconditional;

1.4.2 the vendor will refund in full all money which the purchaser has paid;

1.4.3 this agreement will terminate and neither party will have any right or claim against the other, except where clause 1.4.4 applies; and

1.4.4 this agreement will remain in existence if the vendor breaches the vendor’s obligations under clauses 1.2 or 1.3, but only as is needed to preserve any right or claim the purchaser may have against the vendor arising from that breach.

1. BUILDING INSPECTION

1.1 This agreement is conditional on the purchaser being satisfied with a building report on the property.

1.2 The date for satisfaction of the condition in clause 1.1 is [2=date for satisfaction of condition].

1.3 The purchaser must:

1.3.1 employ a building inspector of the purchaser’s choice to carry out an inspection of the property at the purchaser’s own cost as soon as possible following both parties signing this agreement, and in any event before [1=date for satisfaction of condition]; and

1.3.2 give the vendor at least 24 hours’ written notice of the date and time when the purchaser’s inspector will inspect the property.

1.4 Subject to first receiving the purchaser’s notice under clause 1.3.2, the vendor must give the purchaser’s building inspector access to the property at any time on a working day between the hours of 9.00 am and 5.00 pm to enable the building inspector to inspect the property.

<[Option 1 (in or out)=short form satisfaction]

1.5 The purchaser alone can decide whether or not to satisfy the condition in clause 1.1. The vendor will not be entitled to ask the purchaser for reasons if the purchaser does not fulfil this condition.>

(If you are acting for the vendor, you should consider whether this clause is too generous in favour of the purchaser, and whether the condition should be worded in a way that places an obligation on the purchaser to satisfy the condition unless the inspection reveals some serious issues. An example of a clause which favours the vendor follows (this is modelled on clause 8.2 of the general terms of sale regarding LIM report).)

<[Option 2 (in or out)=long form satisfaction]

1.5 If the purchaser does not approve the building report, the purchaser must give written notice to the vendor (“purchaser’s notice”) on or before [1=date for satisfaction of condition], stating:

1.5.1 the particular matters on which approval is withheld; and

1.5.2 (if those matters are capable of remedy) what the purchaser requires to be done to remedy those matters.

If the purchaser does not give a purchaser’s notice by that date, the purchaser will be deemed to have approved the building report. The vendor must give written notice to the purchaser (“vendor’s notice”) on or before the fifth working day after and excluding the date of receipt of the purchaser’s notice, advising whether or not the vendor is able and willing to comply with the purchaser’s notice by the settlement date. If:

1.5.3 the vendor does not give a vendor’s notice by that date; or

1.5.4 the vendor’s notice advises that the vendor is unable or unwilling to comply with the purchaser’s notice;

this condition will not be fulfilled and the terms of subclause 8.7.5 of the general terms of sale of this agreement will apply. If the vendor gives a vendor’s notice stating that the vendor is able and willing to comply with the purchaser’s notice, this condition will be deemed to have been fulfilled. It will be a requirement of settlement that:

1.5.5 the vendor complies with the purchaser’s notice; and

1.5.6 (if the vendor must carry out work on the property) the vendor:

(a) obtains the approval of the territorial authority to the work done;

(b) obtains any building consents and/or resource consents required by law for the lawful carrying out of that work;

(c) carries out that work in accordance with those consents and in a proper and tradesmanlike manner; and

(d) gives the purchaser a code compliance certificate for that work (if applicable);

all before settlement. >

1.6 In consideration of the vendor agreeing to the insertion of the condition in clause 1.1 in this agreement, the purchaser has paid $1.00 to the vendor, the receipt of which sum the vendor acknowledges.

1.7 The condition in clause 1.1 is for the sole benefit of the purchaser and the purchaser alone may waive that condition.

1. CASH-OUT CLAUSE

1.1 If, before this agreement becomes unconditional, the vendor receives an<[Option 1 (in or out)=] unconditional (being an offer that is unconditional in all respects other than a condition that this earlier agreement does not become unconditional)> offer for the purchase of the property<[Option 2 (in or out)=] on terms which in the vendor’s sole opinion are no less favourable to the vendor than the terms of this agreement> , the vendor may give the purchaser written notice requiring the purchaser to waive the conditions in this agreement.

1.2 The purchaser will have until [1=time (including am or pm)] on the date which is [2=number of working days purchaser has to declare contract unconditional] working days after receiving the notice given under clause 1.1 to waive the conditions in this agreement. If the purchaser does not do so in that time frame, the vendor may by further written notice to the purchaser cancel this agreement.

1.3 If the vendor cancels this agreement under clause 1.2, the vendor will refund in full all money which the purchaser has paid and neither party will have any right or claim against the other.

1. COLLATERAL CONTRACT

1.1 This agreement is collateral with a contract dated [1=contract date] between the purchaser (as vendor) and the vendor (as purchaser) for the sale of the purchaser’s property at [2=address of purchaser’s property] (“collateral contract”).

1.2 Settlement of this agreement and settlement of the collateral contract must take place at the same time.

1.3 Any default under the collateral contract which delays settlement of the collateral contract will be a default under this agreement by the defaulting party.

1. FAX EXECUTION

1.1 Either party may sign a facsimile copy of this agreement and send it by facsimile to the other party or that party’s respective agent(s) or solicitor(s). This method of execution will be sufficient to constitute offer and acceptance and to satisfy the requirements of section 2t of the Contracts Enforcement Act 1956.

1. IRREVOCABLE OFFER

1.1 The parties agree to treat the purchaser’s signing of this agreement as the purchaser’s offer (“offer”). The purchaser cannot withdraw the offer until after [1=time (including am or pm)] on [2=date on which offer may be withdrawn] (time being of the essence) (“acceptance period”).

1.2 The vendor may accept the offer by signing this agreement and delivering a copy to the purchaser at any time before the end of the acceptance period.

1.3 In consideration of the purchaser agreeing not to withdraw the offer before the end of the acceptance period, and the purchaser’s acknowledgement in clause 1.2, the vendor has paid the purchaser the sum of $1.00, the receipt of which sum the purchaser acknowledges.

1. LAND INFORMATION MEMORANDUM AND RESOURCE MANAGEMENT ACT 1991

1.1 This agreement is conditional on the purchaser being satisfied with:

1.1.1 the information which a land information memorandum discloses about the property; and

1.1.2 the status of the property under the Resource Management Act 1991.

1.2 The date for satisfaction of the conditions in clause 1.1 is the date which is [1=no. of working days for satisfaction of the conditions] working days after the date of this agreement.

1.3 The purchaser alone can decide whether or not to satisfy the conditions in clause 1.1. The vendor will not be entitled to ask the purchaser for reasons if the purchaser does not fulfil those conditions.

1.4 In consideration of the vendor agreeing to the insertion of the conditions in clause 1.1 in this agreement, the purchaser has paid $1.00 to the vendor, the receipt of which sum the vendor acknowledges.

1.5 The conditions in clause 1.1 are inserted for the sole benefit of the purchaser and the purchaser alone may waive those conditions.

1. LOWEST PRICE

1.1 The parties acknowledge that:

1.1.1 despite any deferred or extended date for settlement or the giving and taking of possession under this agreement, the purchase price of the property set out in this agreement is the lowest price at which the property could be purchased;

1.1.2 the purchase price of the property set out in this agreement does not include any capitalised interest; and

1.1.3 the “lowest price” for the purposes of section EH 48(3)(a) of the Income Tax Act 1994 is equal to the purchase price of the property set out in this agreement.

1. SALE SUBJECT TO VENDOR’S PURCHASE

1.1 This agreement is conditional on the vendor entering into an<[Option 1 (in or out)=] unconditional> agreement to buy #[Choice 1A=address of property unkown] a property for the vendor to live in ##[Choice 1B=address of property at known] the property at [1=address of property that vendor is to buy]# on terms acceptable to the vendor.

1.2 The date for satisfaction of the condition in clause 1.1 is [2=date by which vendor is to satisfy condition].

1.3 The parties have inserted the condition in clause 1.1 for the sole benefit of the vendor and the vendor alone may waive that condition.

1. RESOURCE MANAGEMENT ACT 1991

1.1 The vendor warrants that:

1.1.1 the property and its present uses comply with:

(a) the Resource Management Act 1991;

(b) the rules of all relevant, operative and proposed regional and district plans;

(c) all resource consents issued for the property; and

(d) all relevant environmental, health and safety legislation.

1.1.2 there are no current or threatened legal proceedings of any kind on contamination of the property or breach of the Resource Management Act 1991, or for the breach of any rule in any regional or district plan, or of any condition in any resource consent; and

1.1.3 to the best of the vendor’s knowledge:

(a) there are no contaminants (as the term is defined in the Resource Management Act 1991) present on the property;

(b) the vendor has not dealt with any contaminant except in accordance with the Resource Management Act 1991;

(c) no one has ever used any part of the property as a landfill or waste dump, except for occasional and immaterial disposal of non-toxic domestic waste; and

(d) there are not currently, nor have there been in the past, any storage tanks on the property.

1.2 The vendor will at the vendor’s cost:

1.2.1 give the purchaser a copy of all resource consents that apply to the activities carried out on the property within 10 working days of the date of signature of this agreement; and

1.2.2 transfer the resource consents to the purchaser on the settlement date.

1. PURCHASER TO ARRANGE UNCONDITIONAL SALE

1.1 This agreement is conditional on the purchaser arranging an unconditional contract for the sale of the purchaser’s property at [1=address of purchaser’s property] <[Option 1 (in or out)=sale price] at a price of $[2=sale price (in figures)]> <[Option 2 (in or out)=or any lesser sum] (or any lesser sum that the purchaser accepts)> <[Option 3 (in or out)=terms] [3=on terms acceptable to the purchaser OR and on any other terms that the purchaser accepts]> .

1.2 The date for satisfaction of the condition in clause 1.1 is [4=date by which purchaser must satisfy condition].

1.3 The parties have inserted the condition in clause 1.1 for the sole benefit of the purchaser and the purchaser alone may waive that condition.

1. PURCHASER’S SALE AGREEMENT BECOMING UNCONDITIONAL

1.1 This agreement is conditional on the purchaser’s existing contract dated [1=contract date] for the sale of the purchaser’s property at [2=address of purchaser’s property] to [3=name of other purchaser] for $[4=sale price (in figures)] becoming unconditional on or before [5=unconditional date].

1.2 The parties have inserted the condition in clause 1.1 for the sole benefit of the purchaser and the purchaser alone may waive that condition.

1. PURCHASER’S SALE AGREEMENT SETTLING

1.1 This agreement is conditional on settlement of the purchaser’s existing unconditional contract dated [1=date of purchaser’s sale contract] for the sale of the purchaser’s property at [2=address of purchaser’s property] to [3=name of other purchaser] for $[4=sale price (in figures)] taking place on or before [5=date by which purchaser’s sale contract is to settle].

1.2 The parties have inserted the condition in clause 1.1 for the sole benefit of the purchaser and the purchaser may waive that condition.

1. EARLY SETTLEMENT

1.1 Subject to clause [1=no. of clause giving general terms of sale].12 of the general terms of sale of ths agreement, the purchaser may bring the settlement and possession dates forward by giving the vendor [2=amount of written notice (in figures)] days’ written notice of the day (which must be a working day) when the purchaser wishes to settle and take possession of the property.

1. PURCHASER’S SOLICITOR’S APPROVAL

1.1 This agreement is conditional on the purchaser’s solicitor approving the agreement. The purchaser’s solicitor may take into account [1=the commercial and conveyancing aspects of this agreement and the wishes of the purchaser OR only the conveyancing aspects of this agreement] when considering whether to approve this agreement.

1.2 Although this agreement is an immediate and fully binding contract, the obligations of the purchaser will be suspended until the purchaser’s solicitor has approved this agreement.

1.3 In consideration of the vendore agreeing to the insertion of the condition in clause 1.1 in this agreement, the purchaser has paid $1.00 to the vendor, the receipt of which sum the vendor acknowledges.

1.4 The date for satisfaction of the condition in clause 1.1 is [2=date by which purchaser is to satisfy condition].

1. TRUSTEE LIMITATION OF LIABILITY

1.1 The [1=vendor OR purchaser] acknowledges that:

1.1.1 the [2=vendor OR purchaser] has entered into this agreement in [3=his OR her OR their] capacity as [4=trustee OR trustees] of the [5=name of trust] (“trust”) and not personally; and

1.1.2 the liability under this agreement of [2=vendor OR purchaser] and [3=his OR her OR their] successors as trustees of the trust is not an unlimited personal liability, but is limited to the assets of the trust in [3=his OR her OR their] hands<[Option 1 (in or out)=party retaining personal liability] ; and

1.1.3 however, nothing in this clause will relieve [6=name of party retaining personal liability] of personal liability under this agreement> .

1. SUBJECT TO VALUATION

<[Option 1 (in or out)=satisfactory valuation]

1.1 This agreement is conditional on the purchaser obtaining a satisfactory valuation of the property from an independent registered valuer.

1.2 The date for satisfaction of the condition in clause 1.1 is [1=date by which purchaser is to satisfy condition].

1.3 The purchaser alone will decide whether or not the valuation is satisfactory. The vendor will not be entitled to ask the purchaser for reasons if the purchaser decides that the valuation is not satisfactory.

1.4 In consideration of the vendor agreeing to the insertion of the condition in clause 1.1 in this agreement, the purchaser has paid $1.00 to the vendor, the receipt of which sum the vendor acknowledges.

1.5 The parties have inserted the condition in clause 1.1 for the sole benefit of the purchaser and the purchaser alone may waive that condition.

<[Option 2 (in or out)=valuation to confirm value of specified amount]

1.1 This agreement is conditional on the purchaser obtaining a valuation of the property from an independent registered valuer which states that the current market value of the property is at least $[2=lowest acceptable valuation amount (in figures)].

1.2 The date for satisfaction of the condition in clause 1.1 is [1=date by which purchaser is to satisfy condition].

1.3 The parties have inserted the condition in clause 1.1 for the sole benefit of the purchaser and the purchaser alone may waive that condition.>

1. VENDOR MORTGAGE

1.1 The purchaser will be pay or satisfy the purchase price as follows:

1.1.1 as to $[1=amount payable on possession/settlement date (in figures)], by bank cheque in one sum on the [2=possession date/settlement date]; and

1.1.2 as to $[3=amount to be secured by mortgage (in figures)], by the purchaser mortgaging the property to the vendor by a registrable [4=first OR second] mortgage (“mortgage”) on the following terms:

(a) principal sum: $[5=principal sum (in figures)]

(b) interest rate: [6=ordinary interest rate (in figures)]% pa

(c) penalty rate: [7=penalty interest rate (in figures)]% pa

(d) interest commencement date: [8=interest commencement date]

(e) payments required: $[9=number of payments and amount (in figures)]

(f) priority amount under section 80A(2) Property Law Act 1952: $[10=priority amount (in figures)]

(g) form: [11=set out form of mortgage]

(h) other terms: [12=state any other terms]

1.2 The vendor’s solicitor(s) will prepare and register the mortgage. #[Choice 1A=purchaser to pay reasonable costs] The purchaser will, on the settlement date, pay the reasonable costs of the vendor’s solicitor(s) in preparing and registering the mortgage. ##[Choice 1B=purchaser to pay set fee] The purchaser will, on the settlement date, pay $[13=amount of agreed fee (in figures)] [14=plus OR inclusive of] GST and disbursements towards the costs of preparation and registration of the mortgage.#