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Home / New Zealand

Covid-19 Delta outbreak: Lockdown 'wreaked havoc' on house settlements

Jacob McSweeny
By Jacob McSweeny
Assistant news director·Whanganui Chronicle·
27 Sep, 2021 04:00 PM4 mins to read

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Completing the final stages of house sales was a bit of a nightmare during the August lockdown, lawyer Rob Moore said. Photo / Bevan Conley

Completing the final stages of house sales was a bit of a nightmare during the August lockdown, lawyer Rob Moore said. Photo / Bevan Conley

The August lockdown caused havoc and stressed out house buyers and sellers in the middle of negotiations, a Whanganui lawyer says.

On August 17, the whole country moved to alert level 4 after community cases of Covid-19 with the Delta variant were found in Auckland that same day.

When the first lockdown was announced last year, there was a three-day warning.

"All the local solicitors straight away kind of basically got on the same page," lawyer Rob Moore, who does a lot of property law work, said.

"If you had two willing parties you just pushed ahead, and if you didn't you just waited until the lockdown was over."

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But, in August Moore had several complicated settlements that were threatened.

The most difficult cases involved people moving from Auckland to Whanganui or vice versa, and there was one instance of someone leaving here to move to Australia.

"That was an absolute disaster," Moore said.

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"They had an unconditional agreement overseas that was based on [their house sale] going ahead."

But as the Australian agreement did not have a Covid clause, Moore's client ended up being threatened with having the settlement contracts cancelled and being sued for damages from the Australian sellers' lawyers.

It was eventually settled once lockdown lifted and the person successfully moved to Australia, but not without going through a lot of stress, Moore said.

"When you know that your client's potentially going to be losing a massive amount of money and you're kind of begging the other lawyer - it's really hard for us as well," Moore said.

"I would say for 70 or 80 per cent affected by it, it was a really highly stressful situation for them. They just had no idea what was going on and needed information and updating all the time."

Most parties were willing to have a Covid clause in agreements that extended settlements to a period after a lockdown was lifted.

"But people got lazy on it and stopped putting the conditions in," Moore said.

There were also people selling their house in locked-down Auckland and buying in Whanganui, which was out of level 4 earlier.

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"All of these clauses had in them that settlement would be like 10 working days from the date you return to level 3.

"We had clients that were selling in Auckland to buy in Whanganui and they couldn't sell, but they were obliged to buy because the agreement started ticking again."

He said there was the potential for some people to lose their deposit and getting sued for damages "through no fault of their own but just because of the structure of the lockdown".

"There's no consistent approach in the industry to what happens," he said.

Whanganui lawyer Rob Moore. Photo / Supplied
Whanganui lawyer Rob Moore. Photo / Supplied

Completing the final stages of house sales was a bit of a nightmare during the August lockdown.

"It's very bespoke depending on what's in each individual agreement and that's where the problem is."

Moore said the best thing would be for sale and purchase agreements to say that if any party is under lockdown, they should have settlement extended until 10 days after level 3.

Property Brokers agent Tess Hunt said settlements during lockdown were slowed.

"No one knew when we were going to be out of lockdown.

"Just taking everything step by step and taking a lot of time with [clients]."

Moving house is one of the most stressful things a person can do, especially during a lockdown, she said.

"Things with people moving out of town - we had a couple of deceased estate properties [for sale] with family living out of town."

She said the restrictions on travelling to other cities stopped those relatives from being able to clean out houses they might have sold.

"It's definitely been a different lockdown to last time with how everything's gone," Hunt said, adding that Property Brokers "boiler plate" contracts maintained the Covid clause.

"Even if we were super-organised about everything, sometimes there's nothing we can do ... you can't prepare everything for it."

Bayleys agent Lyn Wickham said all the settlements she was involved in during the lockdown went through without a glitch.

"Mine were all local people so they all settled," she said.

"We didn't have a lot of stress."

Wickham said the biggest problem she had come across was people not being able to move into the houses they had bought.

"Unless under special circumstances, nobody could shift until level 2."

Mortgage adviser Aaron Stampa said he had not faced stressful situations like ones lawyer Rob Moore had seen.

Stampa had delayed settlements, but they went through eventually.

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