Real estate agents have been caught adding additional clauses into standard sale-and-purchase agreements, which lawyers say could have dire consequences for homeowners.
The Real Estate Institute says it has been made aware of some real estate agencies inserting clauses into the Agreement for Sale and Purchase of Real Estate, forcing buyers to waive their title requisition rights and authorise early release of their deposits.
Title requisition rights allow a purchaser to request the vendor to rectify defects or issues on the property title before settlement, and if a sale falls through after an early release, the buyer may have no way to recover the funds.
This risk is heightened for buyers using KiwiSaver, as the terms for using KiwiSaver funds require the deposit to remain in trust until settlement.
The Law Association's Property Law Committee alerted the Real Estate Institute to the clauses that were being covertly added. The REINZ declined to comment. The president of the Law Association is Tony Herring.
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