The Law Association has issued a serious warning to New Zealand property buyers. Photo by Andrea Piacquadio
🏠 Shocking Warning from Law Association
The Law Association has issued a serious warning to New Zealand property buyers — especially first-home buyers using KiwiSaver — after reports emerged that some real estate agents have been altering Sale and Purchase Agreements in ways that could strip away key legal protections.
📜 The Alleged Changes
Lawyers have identified cases where agents:
-
✂ Removed buyers’ title requisition rights — the right to check that a property’s title is acceptable, even on an unconditional offer.
-
💰 Added clauses allowing early release of deposits to vendors — before the standard 10 working day period.
The Most Comprehensive NZ Real Estate Agent Database Ever Compiled | Order Now
⚖️ Why This Matters for Buyers
Tony Herring, President of the Law Association, said while the issue isn’t yet widespread, the implications for affected buyers are huge.
If title requisition rights are removed and a defect is later discovered, buyers could be trapped in a nightmare scenario:
“You might be days away from settlement, your bank refuses to release the mortgage funds because of a title problem, and you have no legal way to delay or exit the deal. It’s a catch-22,” Herring explained.
🏦 KiwiSaver Buyers in the Firing Line
For first-home buyers using KiwiSaver to pay their deposit, the risks are even higher.
Lawyers must give a legal undertaking to KiwiSaver providers that funds will be returned if a settlement falls through — but if a deposit has already been released and spent by the vendor, recovering it can be slow, difficult, or even impossible.
⏳ Why the 10-Day Rule Exists
Under the standard Sale and Purchase Agreement, deposits are held for 10 working days — giving time for title checks, finance approvals, and any final conditions to be met.
If a deposit is released early and something goes wrong — such as the vendor failing to settle — buyers could lose their money entirely.
Unlock 1.2 Million+ Aussie Business Contacts — No Subscriptions, No Limits
🛑 Real Estate Authority Responds
Belinda Moffat, CEO of the Real Estate Authority (REA), confirmed her organisation has already issued advice to the sector.
“The 10-day rule is there to protect consumers. Early release clauses written into Sale and Purchase Agreements risk undermining that protection,” she said.
Moffat stressed that early deposit release should only occur:
-
By court order, or
-
When both parties sign a formal authority agreeing to it
The REA warns that inserting an “early release” clause directly into the contract does not meet the intent of the law and may lead to breaches of conduct rules.
📌 What Buyers Should Do Now
✅ Check every clause in your Sale and Purchase Agreement before signing
✅ Seek immediate legal advice if you notice changes you didn’t agree to
✅ Remember — your lawyer works for you, not the agent or the vendor
💬 The Bottom Line
With the property market heating up and competition for homes fierce, some agents may be pushing boundaries — but buyers cannot afford to sign away their rights.
If you’re using KiwiSaver or buying unconditionally, one altered clause could cost you your deposit, your finance, or even your dream home.
SOURCE: RNZ
