Core Practice Area

Selling a Property: The Legal Process

Selling a home involves significant legal obligations and financial coordination. From verifying vendor warranty compliance to coordinating the discharge of existing mortgages and executing electronic LINZ title transfers, we ensure your sale settles smoothly and securely.

Get a Quote for Your Sale

Seller Checklist

✔ **Agreement Vetting**: Reviewing warranties prior to signature.

✔ **Mortgage Discharge**: Coordinating bank loan releases.

✔ **Bright-Line Check**: Checking tax exposure and main home rules.

✔ **Rates Apportionment**: Calculating utility splits for settlement.

The Step-by-Step Sale Conveyancing Process

1. Pre-Contract Review

Before signing the agency listing or the Sale and Purchase Agreement, we review all vendor warranties. We check that you are not committing to repair unconsented changes or guaranteeing fixtures that do not work.

2. Monitoring Conditions

Once the offer is signed, the contract is "conditional." We monitor the buyer's progress as they satisfy their finance, building, or LIM conditions. The contract becomes "unconditional" once all conditions are satisfied.

3. Pre-Settlement Preparation

We coordinate with your bank to prepare a mortgage discharge. We draft the Land Transfer Authority and Instruction (A&I) forms, which we execute with you electronically to authorize the title transfer.

4. Pre-Settlement Inspection Access

The buyer is entitled to conduct a pre-settlement inspection (usually 2 to 3 working days before settlement). You must ensure the property is in the same condition as when you signed the contract, and that all chattels are functional.

5. Settlement Day Execution

We receive the purchase funds from the buyer's lawyer. We immediately pay off your outstanding bank loans (discharging the mortgage), deduct the real estate agent's commission, adjust council rates, and pay the balance to your designated account.

Important Compliance Areas for Property Sellers

1. Discharging Your Mortgage (LINZ e-Dealing)

If you have an active bank loan against your property, the bank holds a registered mortgage over the title. Even if you have repaid the balance, the mortgage remains on title until it is officially discharged.

We coordinate with your lender's mortgage operations department to request a payout figure. On settlement day, we transfer the payout balance to release the bank's security, allowing us to register the ownership transfer on the LINZ e-Dealing platform.

2. Bright-Line Property Tax Exposure

Under New Zealand's bright-line test rules, selling a residential property (other than your main home) within a specific holding period can trigger income tax obligations on capital gains. Under the tax law expertise of principal solicitor Ian Mellett, Quay Law reviews your transaction history to confirm your eligibility for main home exemptions before you sign.

3. Rates & Utility Apportionment Formula

Council rates are charged in advance, whereas water meters are billed in arrears. On settlement day, we calculate a **settlement statement** to divide these expenses proportionately between you and the buyer:

Rates Split Formula: If you have paid the council rates bill past the settlement day, the buyer refunds you the portion for the days they will own the property. If rates are in arrears, we deduct your unpaid share from the sale proceeds and pay the council directly.

4. Unconsented Alterations & Vendor Warranties

The standard ADLS contract contains a warranty where the seller certifies that any building works completed during their ownership were built with council consents. If you built a deck, renovated a bathroom, or altered a wall without consent, you are in breach of contract.

Review our guide on unconsented building works risks to learn how to disclose these issues and insert protective clauses to prevent buyer claims.

Vendor Chattels Warranties

In the ADLS/REINZ agreement, you warrant that all chattels listed (e.g. stove, dishwasher, rangehood, light fittings, keys) are in **reasonable working order** on settlement day. If a chattel is broken, you must disclose it in the contract before signing, otherwise the buyer can claim compensation.

Risk Tip: If the oven heating element or the garage door remote is faulty, let us know so we can insert a clause stating it is sold 'as is'. This prevents post-settlement claims.

Avoid Post-Settlement Claims

A buyer conducts their pre-settlement inspection to verify that all systems and appliances are functioning. If the heating or built-in chattels are broken, they can request their lawyer to withhold funds on settlement day to pay for repairs.

We review your chattels schedule and prepare custom disclosures to make sure you are fully protected from unexpected repair bills on settlement day.

Instruct Quay Law for Your Sale

Ensure your vendor warranties are managed correctly. We offer fast draft Sale and Purchase Agreement audits. Request a transparent fee quote online before you list your property.

Get a Conveyancing Quote

Selling Process FAQs

Under the standard ADLS agreement, if the property is sold with vacant possession, you must move out and remove all rubbish and belongings before **2:00 PM** on the day of settlement. Keys must be handed to the real estate agent for release once we confirm receipt of the settlement funds.

The real estate agency holds the buyer's 10% deposit in their trust account for 10 working days. Once the contract is unconditional and the 10 days lapse, they deduct their sales commission from this deposit and release the remaining balance to our trust account, which we apply toward your settlement balance.

No. You are only liable for council rates and water charges up to the day of settlement. We calculate a precise apportionment on the settlement statement. Any portion of rates you have prepaid past the settlement date is refunded to you by the buyer as part of the purchase proceeds.

Discuss Your Residential Transaction

Get in touch with Quay Law to review a Sale and Purchase Agreement, audit a land title, or arrange legal settlement.