If you’re unsure whether a particular property fits with your financial plan, you can download the listing’s property pack and contact your enable.me coach to work through its suitability for your situation and goals.
The property packs on the website provide you with key information regarding the property and its construction. If you have additional questions about the property, please use the contact form in the property listing to ‘Request a Callback’. Your request will be time-stamped, and our team will contact interested parties in order. Please note that while we update listings regularly, we cannot guarantee the availability of all properties on the site at any moment in time.
If you’re ready to secure a particular property, please use the contact form in the property’s listing to ‘Request a hold’. Your request will be time-stamped, and we’ll work with each buyer in order. We will call you to talk you through the purchase process. We’ll send you the Sale & Purchase agreement to review and sign to secure the property so you can start your due diligence. During the due diligence period, you then engage with your lawyer and your enable.me coach.
Yes – it’s important you engage a suitably qualified lawyer with considerable experience in ‘off the plans’ property contracts. There are unique areas of expertise required when providing legal advice on properties that are yet to be built which a general conveyancing lawyer may not be experienced in. These include the timing of titles being issued, covenants, inspection challenges, timing around council consents, etc. Some lawyers offer fixed fees for these types of transactions.
Standalone properties are most often called ‘freehold’ or ‘fee simple’ properties. This is where you have absolute property rights on both the property and the land.
Duplex properties are usually ‘freehold’ or ‘fee simple’. A duplex property is one of two that share a common central wall. They can be owned together or on separate titles.
Townhouse or Terrace properties are multi-floor properties that share one or both walls with adjacent properties. These can either come with a ‘freehold’ or ‘stratum in freehold’ title. If the townhouse is freehold there will usually be a ‘residents’ society’ the owners belong to and contribute an annual fee to, to manage the common areas. If the townhouse is ‘stratum in freehold’ the owners will belong to a body corporate. With intensification becoming commonplace, freehold townhouses are increasing in popularity.
Apartment properties are usually multi-story buildings that have individual residential units. Apartments are ‘stratum in freehold’, unit title properties. Owners of apartments will belong to the body corporate. Well-located, well-appointed apartment developments are becoming more popular with investors.
As the name suggests, buying a turn-key property is supposed to be as simple as inserting the key and turning it, and is the simplest method of purchasing a new property off the plans. You start by signing the sale and purchase agreement with your purchaser’s due diligence clause inserted, before spending any time or money on investigations. This is in the reverse order to what normally happens in a property transaction on an existing property.
The sale and purchase agreement is one large document that includes the standard law society agreement, additional terms that have been added by the vendor, details on the site/section, the plans or drawings of the property, and full specifications of what is included in the property (including all building materials, fixtures and fittings, carpet, tiles, oven, rangehood, heat pump, blinds etc.).
Once you and the vendor have signed the sale and purchase agreement you typically have a 10-working day due diligence period to get everything you need in place to be comfortable to proceed with the purchase. At a minimum we recommend seeking solicitor’s approval and ensuring you have the financial means to both pay the deposit required to secure the property and the required funds to pay the balance when the property is complete and you’re due to take full ownership of the property.
With the ‘turn-key’ option, once you are happy with your due diligence investigation and want to proceed with the purchase, you advise your solicitor to notify the vendor’s solicitor that you are prepared to go ‘unconditional’.
At this point your initial deposit is due for payment to the vendor’s solicitor’s trust account, where it will remain untouched until settlement and will form part of the final balance. This amount is usually 10% of the purchase price. With turn-key contracts once that once that initial deposit has been paid, you are not required to make any further payments until the property is fully complete. You’re not required to fund the build because the vendor has factored their funding costs into the original purchase price. That can mean turn-key packages are slightly more expensive than a comparative ‘land and build’ option, but most clients are comfortable paying a little bit extra for the convenience, as it only involves two payments and little or no involvement in the building process.
Note: When seeking funding for your purchase, you need to be aware that most bank pre-approvals are valid for 60 – 90 days (depending on the bank). So, if the expected completion date of your property is longer than that, the bank may want to reassess the application, especially if their lending criteria has changed, or your personal financial situation has materially deteriorated.
These types of property packages have two separate components – the purchase of the land and the construction of the building. With this option, if you are keen to secure the proposed property you would sign a sale and purchase agreement with due diligence clause inserted for the land only and then sign a separate building contract directly with the builder. The agreement for the land might be quite sparse as it’s simply showing the size of the site etc. All building-related information, such as the plans and specifications will be included in the build contract. Your lawyer will need to review both agreements and provide you with advice on each.
With the land and build option, once you’ve done your due diligence and you’re happy to proceed with the purchase, you advise your solicitor to notify the vendor’s solicitor that you’re prepared to go ‘unconditional’.
At this point your initial deposits are due for payment – these are usually 10%. The deposit for the land portion is to be paid into the vendor’s solicitor’s trust account, where it will remain untouched until settlement and will form part of the final balance. However, the build portion is to be paid directly to the builder. These funds are required to pay some preliminary costs related to the build process such as architect fees, council fees, building consent fees, water contribution etc.
With this option you are required to take ownership of the land first before the builder can start to build your property. This might be 1 – 3 months after you have paid your initial deposits. This timeframe is usually related to the time it takes for the builder to get the required building consents from the local council if these aren’t already in place. Once you settle on the land you are required to pay the monthly mortgage payments from that point onwards, which may mean covering that mortgage for 6 – 9 months before the property is compete and you have your first rent payment from tenants.
You are also required to pay the builder for the work they do as they complete it – these are called ‘staging’ or ‘progress’ payments. These are either due at specific pre-agreed dates, or at certain milestones when work is complete. For example, the first payment might be when the foundations are laid, the second when the framing is up and so on until the build is complete. There may be up to 10 payments over the course of the construction period. The benefit of this method is that you can secure your lending approval at the beginning of the process because it’s not linked to the completion of the property, but more the settlement of the land. Also, as you are funding the build, ‘land and build’ propositions tend to be slightly cheaper than the full cost of the turn-key build. However, there is significantly more work and effort around managing the build process and the number of mortgage drawdown payments.
For many townhouse developments the property will have a ‘freehold title’, where you own the land, and anything built on it. However, as you share common areas (or walls) with your neighbours it’s best to have an agreement that protects your property long into the future. A Residents’ Agreement does just that – it sets up a professionally managed Residents’ Society that helps manage and maintain the communal facilities of the development for the benefit of all owners. It will ensure the development is adequately insured and common areas are safe, clean, and well-presented.
The main requirement of the Residents’ Society is to maintain common infrastructure, such as carparking, common area maintenance of the grounds, lighting, insurance, and management of any other services required. These services are specific to each development and the Society is tailored to the requirements of each development. A schedule of services with each Residents’ Society will provide details of the services being provided by the Society.
For apartments and some townhouses, they can be what’s called ‘stratum in freehold’ or ‘unit title’. For properties that are unit title, there is a requirement for there to be a Body Corporate.
With a unit title property, you own your apartment or unit outright and anything else listed in the record of title, such as garages, car parks and private outdoor areas. You also have an undivided share of the common property, such as lifts, lobby areas, driveways, and gardens.
Owning a unit title means there are different obligations to standard house and land ownership. Unit titles are governed by the Unit Titles Act 2010, which sets out the rights and responsibilities of a unit title owner, so that the group of units can be managed effectively.
When you buy a unit title, you automatically become a member of the Body Corporate, which is made up of all the unit owners acting as a group. Body Corporates handle the management and maintenance of the building and property. Most day-to-day decisions of the Body Corporate can be made by a Body Corporate committee or with the agreement of 50% or more of the unit owners. Some decisions will require the agreement of 75% or more of the unit owners. The Body Corporate must hold an Annual General Meeting at least once a year to discuss issues and vote on them.
You will usually pay an annual fee or levy to the Body Corporate, which will go towards budgeted Body Corporate expenses. The fee will include costs like insurance and management expenses (by an external contractor), contributing to a long-term maintenance fund and any services the body corporate arranges for its members (for example rubbish collection and cleaning communal areas).
There are also body corporate rules that each owner must adhere to. Please ask your sales agent for a copy of these and the proposed budget. As with any property purchase, it’s wise to seek legal advice. Your lawyer or conveyancer can help you understand the Body Corporate rules, your obligations and what you can and can’t do with your apartment or townhouse.
The following additional resources can help provide additional information on the property purchase process.
Reference – REAA Website: settled.govt.nz