One of the clearly defined and longstanding requirements regarding the sale and purchase of land in New Zealand is that the agreement must be in writing and signed by both the accurate seller and purchaser.
When the seller of the land uses a real estate agent to assist with the sale, that agent is the seller’s agent. Under the law of agency, any representation made by the agent is deemed to be on behalf of their seller principal. However, within the parameters of the selling of land process outlined above there are opportunities for slip-ups to occur.
If a misrepresentation, made by the seller or their agent, occurs between the commencement of the marketing program and the signing of an agreement for sale and purchase document, then an issue may arise where what is purported to be on sale, is not totally reflected in the written agreement.
The facts are very important here. The misrepresentation made must directly affect the purchaser’s decision to buy the land. If the chain of causation is broken between the making of any misrepresentation (either verbally or in writing) and the signing of the written agreement, then the claim would fail. The test is that the purchaser made the decision to buy, with the misrepresented facts being part of the marketing facts presented – which were not amended, clarified or rectified along the way.
If any issues arise in this area, it is advised to obtain legal advice as soon as possible; whether you are a seller or a buyer. Time frames apply and everyone involved needs to be put on notice.
