News and views

A recent High Court case shows that, in some circumstances, buyers of a property cannot rely totally on a code compliance certificate, but may have to undertake further investigations themselves. This will have implications for agents in circumstances where buyers ask them whether the purchase should be conditional on a builders report.

The High Court, in a recent case (Quin v the Real Estate Agents Authority [2012] NZHC), has discussed what obligations an agent has to explain defects to a potential purchaser. It has also clarified whether a Complaints Assessment Committee (“CAC”) can order an agent to pay damages if there is a breach of those obligations.

About two years ago, the Queenstown Lakes District Council started trying to track down the descendants of 17 sections in the Cardrona Valley which had been abandoned. This was triggered by an incident in 2008, when a couple of people tried to claim ownership of two sections opposite the Cardrona Hotel by fencing them off and putting signs on the fences claiming the land was private property.

Most developers in recent years have placed land covenants (also called restrictive covenants) on the titles to the lots in new subdivisions. These are intended to restrict what can be built on the property, and in some cases what the property can be used for. The recent High Court case of Whittiker v Jericevich looked at the extent of a restrictive covenant.

A recent High Court case looked at the question of whether buyers under a purchase agreement can sue for damages for a breach of warranty by the sellers when the buyers had not carried out a proper due diligence under a due diligence condition, and where proper due diligence would have exposed the error in the warranty.

Buyers are generally required to use reasonable efforts to satisfy any condition in a sale and purchase agreement which is included for the benefit of the buyer. Some buyers include a ‘due diligence’ condition in an agreement in the belief that this will give them a right to cancel the agreement for any reason whatsoever.

In a recent decision, the Supreme Court has confirmed that if a Council negligently includes incorrect information in a Land Information Memorandum, and the person who ordered the LIM relies on that incorrect information, the Council will be liable for any loss that person suffers as a result.