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Conditions, settlements and Christmas closure
6 December 2017

Why we won’t do your settlement on December 27th

 

Many people are signing contracts to buy and sell properties at the moment and if they’re not wary, the date for conditions to be satisfied or for settlement might fall on a date that their lawyer simply says isn’t possible.

 

But why not? If it’s not a stat day, what’s the problem? You’re on holiday so it’s a great time to move!

 

It’s not actually that we lawyers want to take an extended break – finishing up mid-December and wandering back in sometime in February. Under the standard form Agreement for Sale and Purchase, in the wee tiny fine print, there is a definition of working day (clause 1.1(32)).  This tells us that the period from 24 December to 5 January in any year, both days inclusive, are NOT working days (1.1(32)(c)).  So we can’t confirm a condition or complete a settlement on any of those days.

 

To complicate things even more, if we’re dealing with a LIM (land information memorandum) the working day period doesn’t start again until 15 January (councils like longer breaks!).

 

So let’s look at it using a realistic example -

 

Agreement is signed on 16 December 2017 (for a property in Auckland).

 

Building report condition is due in 10 working days (standard clause) –

Day 1 – 18 December

Day 2 – 19 December

Day 3 – 20 December

Day 4 – 21 December

Day 5 – 22 December

Day 6 – 8 January

Day 7 – 9 January

Day 8 – 10 January

Day 9 – 11 January

Day 10 – 12 January 2018 – condition due

 

LIM condition is due in 15 working days (standard clause)

Day 1 – 18 December

Day 2 – 19 December

Day 3 – 20 December

Day 4 – 21 December

Day 5 – 22 December

Day 6 – 15 January

Day 7 – 16 January

Day 8 – 17 January

Day 9 – 18 January

Day 10 – 19 January

Day 11 – 22 January

Day 12 – 23 January

Day 13 – 24 January

Day 14 – 25 January

Day 15 – 26 January 2018 – condition due

 

Meth test condition is due in 10 days (NOT working days) –

Day 1 – 18 December

Day 2 – 19 December

Day 3 – 20 December

Day 4 – 21 December

Day 5 – 22 December

Day 6 – 25 December

Day 7 – 26 December

Day 8 – 27 December

Day 9 – 28 December

Day 10 – 29 December – condition due BUT there’s a catch! The fine print also says that if a condition or settlement falls on a day that is NOT a working day, the act must be done on the working day BEFORE (1.2(1)).  So in this case, the meth test is due on 22 December 2017.

 

Settlement is 10 working days after the unconditional date –

Day 1 – 30 January (the 29th is a stat day in Auckland and Nelson (1.1(32)(d)))

Day 2 – 31 January

Day 3 – 1 February

Day 4 – 2 February

Day 5 – 5 February

Day 6 – 7 February (the 6th is Waitangi Day (1.1(32)(a)))

Day 7 – 8 February

Day 8 – 9 February

Day 9 – 12 February

Day 10 – 13 February - settlement

 

It can be fairly tricky working out dates at this time of year so its important to have your lawyer check the Agreement before you sign it to make sure its going to work. Of course lawyers offices are also closed for different periods of the Christmas break so your lawyer may still not be able to confirm conditions or settle on the day that you’ve worked out. We make a commitment to our clients that we WILL be available – even if its only a few people working that day – to do all that is required!

 

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