When selling a property, and before signing an agreement
for sale and purchase, how many vendors (or purchasers) give
thought to clause 6 of the agreement for sale and purchase?
(When I refer to the “agreement” I am referring to the Auckland
District Law Society ninth edition which is the most commonly
used form of agreement in property transactions).
Although there are a number of warranties, this article will focus on
the warranty regarding the chattels to a property. Broadly speaking,
chattels are items that are not affixed to the property.
The vendor warrants at settlement that “the chattels are delivered
to the purchaser in reasonable working order, where applicable,
but in all other respects in their state of repair as at the date of this
agreement (fair wear and tear excepted) but failure so to deliver the
chattels shall only create a right of compensation” .
Vendors: Note the timing of the warranty – you are giving a
warranty that relates to a future period (ie settlement) as to the state
of the chattels at the time you are signing the agreement.
Purchasers: The onus is on the purchaser to make sure that the
chattels are in “reasonable working order” at the time of signing
the agreement. It would be prudent prior to signing the agreement
to establish this. In order to avoid any problems on settlement
date, a pre-purchase inspection should be carried out and the
chattels checked to help avoid any potential issues on settlement
day. As noted above, a purchaser’s remedy is compensation only
and settlement cannot be delayed by any failure on the part of the
Next months’ article will deal with the warranty regarding vendor
works completed on a property.
Clause 6.2(1).
Clause 3.2 allows one inspection prior to settlement

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