Sale and Purchase Agreement
The legally binding contract between buyer and seller that sets out all the terms and conditions for a property transaction in New Zealand.
What is a Sale and Purchase Agreement?
The sale and purchase agreement is the core legal document in any NZ property transaction. The standard form used by most real estate agents is published by the Auckland District Law Society (ADLS) and the Real Estate Institute of New Zealand (REINZ). It covers the purchase price, settlement date, conditions, chattels included, and the rights and obligations of both parties.
The agreement typically starts as a conditional contract — the buyer includes conditions such as obtaining finance, a satisfactory building inspection, a LIM report, or a due diligence clause. Once all conditions are satisfied (or waived), the agreement becomes unconditional and both parties are legally committed.
While the standard ADLS/REINZ form is widely used, additional clauses can be added to address specific situations. It's strongly recommended that your lawyer reviews the agreement before you sign, though in practice many buyers sign at open homes and have their lawyer review it afterwards.
Why It Matters for Due Diligence
The sale and purchase agreement defines your legal rights and obligations. Getting the conditions right is critical — they are your safety net. Common conditions include finance, building inspection, LIM, toxicology (for methamphetamine testing), and due diligence.
Never sign an agreement without understanding the conditions and timeframes. If you're unsure, ask your lawyer to review it before you sign. Once the agreement goes unconditional, you are legally committed to buying the property, and pulling out can result in the seller keeping your deposit and claiming further damages.
How to Check
Your lawyer or conveyancer should review the agreement before you sign, or at minimum, as soon as possible after signing. They will check the conditions, timeframes, chattels list, title details, and any special clauses. The ADLS/REINZ standard form is available from real estate agents and lawyers.
Frequently Asked Questions
Can I back out of a sale and purchase agreement?
While the agreement is conditional, you can withdraw if a condition is not satisfied (e.g. you can't get finance). Once unconditional, you are legally bound. Withdrawing after going unconditional can mean losing your deposit and facing a damages claim.
Do I need a lawyer before signing?
Ideally yes. While many buyers sign agreements at open homes, it's best practice to have your lawyer review the agreement first. At minimum, have your lawyer review it immediately after signing — they can advise on the conditions and timeframes.
Related Terms
Due Diligence Clause
GlossaryA condition in the sale and purchase agreement that gives the buyer a set period to investigate the property and withdraw for any reason.
Unconditional
GlossaryThe status of a sale and purchase agreement once all conditions have been satisfied or waived, making both parties legally committed to the transaction.
Conditional Offer
GlossaryAn offer to buy a property that includes one or more conditions that must be met before the buyer is legally committed to the purchase.
Settlement
GlossaryThe day ownership of a property officially transfers from the seller to the buyer and the purchase price is paid in full.
Deposit
GlossaryAn upfront payment made by the buyer when purchasing a property, typically 20% of the purchase price, held in trust until settlement.
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