GCP Limited Property Sale: Legal Implications of Sale Agreement

This memo provides a legal analysis of the potential sale of property at 84 Creesey Road, Auckland, by GCP Limited. It addresses key aspects of the draft Agreement for Sale and Purchase, including the date of the agreement, conditions (finance, LIM, building report), deposit requirements, GST implications, chattels and fixtures, and tenancies. The analysis covers specific clauses within the agreement, such as Clause 10 regarding time periods for dealing with conditions, and discusses the obligations of both the buyer and seller. Furthermore, it addresses issues related to existing tenancies and the need for compliance with the Residential Tenancies Act 1986. The memo advises on the steps required to ensure the agreement becomes unconditional and highlights potential pitfalls, such as failure to pay the deposit or comply with notice requirements.

Property Law

To: Harold Hoover, Partner
From: Name of the student
Date: 5th of March 2019
Subject: GCP Limited – sale of 84 Creesey Road, Auckland
Background
1) This memo is about the potential sale of Creesey Property by GCP Limited. It is a private company
and the property is located at 84 Creesey Road, Auckland. The property is owned by Greg and Tara
Grayson and this is for residence purpose.
2) The property includes an unsigned and undated agreement for sale and my advice based on the draft.
3) GCP Limited has also owned some other properties in the town as it is essential for the business. The
PDD includes the copy of the agreement for the property which is for sale.
4) This memo will be focusing on the additional information of the property, easements of the property,
JFL lease and residential dwelling at the property.
Date of the agreement
5) The agreement refers to the date of this agreement or the date when the agreement was signed by both
the parties. It means the actual date of the agreement when it was concluded. In case the agreement
reaching the practitioner's office without any date then the practitioners of both the parties have the
responsibility to clarify the date as early as possible.
Conditions
Clause 10: Time period for dealing with conditions
6) The buyer must satisfy the LIM condition and the owner’s repost conditions under the timeframe
which is being finalized under this clause.
7) All conditions must be met and the conditions which have been included will be for the whose benefit
either for one party or parties.

Clause 10.1: Finance condition
8) Purchaser required providing details of any loan offers submitted by the bank and it must be
discussed with the client to satisfy the preconditions before the loan can be advanced.
9) There are some common conditions which might cause difficulty in providing registered valuation,
obtaining life insurance and providing proof of income.
10) Whereabouts of any cash contribution will be discussed first before confirming a finance condition.
Clause 10.2: LIM condition
11) LIM report needs to be requested by the purchaser within five working days from the date of the
agreement.
12) The LIM needs to approve or disapproved by the purchaser within fifteen working days from the date
of the agreement. If Purchaser fails to do so in that condition purchaser requires to give notice vendor
with the reason for a delay.
13) Vendor needs to give notice to the purchaser within five working days after receiving the notice from
the purchaser whether the vendor is able and willing to comply with the notice.
14) If the vendor is not able to comply with the notice of the purchaser, the purchaser will have 10
working days from the date of the purchaser’s original notice to waive the LIM condition. If the
purchaser is not getting waived then both the party will have the right to cancel the agreement.
Clause 10.3: Building report condition
15) If yes is being selected on the first page then the agreement will become conditional on the purchaser
obtaining a building report in good faith from a well-qualified building inspector within ten working
days from the date of the agreement.
16) Invasive testing will not be allowed without consent.
17) If the purchaser is not satisfied with the building report and chooses to cancel the agreement, in this
case, the copy of the building report must be provided to the vendor.

Deposit
18) The buyer requires paying an amount as a deposit after execution of the agreement. If the buyer will
not be able to submit the deposit amount before the third working day after the execution of the
agreement Greg and Tara Grayson will have the right to cancel the agreement.
19) The deposit will be the part payment of the purchase price. The party must pay the deposit before the
owner cancels the agreement, according to clause 6.0 of requisition procedures (Int'L Business
Publications, 2015).
Goods and service tax
20) The buyer requires to pay GST as per the agreement and it is payable in one sum on the GST date.
The GST date will not be mentioned on the front page of the agreement; it will be the date of the
settlement.
21) GST is not so paid to the owner but the purchase must be paid to the owner.
22) Interest will be calculated on a late settlement on the amount of the GST unpaid from the GST date
till payment.
23) If the GST is not paid to the owner within one month of the GST owner has the right to give notice to
the purchaser under the subclause 14.1.
Other steps
Chattels and fixtures
24) Fixtures forms are part of the land and will be transferred to the purchaser on the date of the
possession.
25) According to Clause 7.2 all the chattels which are included in the sale, are the unencumbered property
of the vendor.
26) Chattels and equipment to the property need to be delivered on reasonable working order.
27) All other aspects related to repair must be at the date of the agreement and failure that will create a
right of compensation.

28) The vendor will hand over the equipment and chattels to the purchaser in the same condition as they
were in the purchase contract.
29) The purchaser will have the right to complete a pre-settlement inspection.
Tenancies
30) As the property is being sold for tenancy, the provisions of the Residential Tenancies Act 1986 will
apply.
31) Vendor needs to give 42 days’ notice to the tenant.
32) If the notice has not been given yet to the tenant then there must be 42 days between the dates that the
agreement becomes unconditional.
33) If the vendor forces the tenant to leave early then the vendor will be in breach.
Conditions generally
34) All conditions need to be satisfied before the agreement becomes unconditional
35) The terms of the agreement must happen before the settlement or on the settlement.
If anything else required just feel free to get in touch with me.