What you need to know: Pre-settlement Inspections

What is a pre-settlement inspection?

A pre-settlement inspection gives you the opportunity to ensure that the property you are purchasing is in the same condition as it was in when you entered into the agreement. It also allows you to check that any chattels included in your purchase work as they are supposed to and that any work that the vendor promised to complete before settlement has been completed.

When should I complete my pre-settlement inspection?

Generally, pre-settlement inspections should be carried out at least two working days prior to settlement. This is to give enough time for any issues from this inspection to be raised with the vendor, and rectified. It also means that the vendor may have begun to move their belongings out of the property, so allows for a closer inspection of the property.

Does everyone get to do a pre-settlement inspection?

If the property you are purchasing is tenanted, you may not have a right to a pre-settlement inspection. If you are buying a tenanted property and wish to complete a pre-settlement inspection, you can contact us to help you negotiate a right to a pre-settlement inspection prior to entering an agreement to purchase a property.

How many pre-settlement inspections can I do?

Generally, you can only complete one inspection. However, if you ask that the vendor rectify an issue following your first pre-settlement inspection, and they agree to do this, then you can inspect the property once more to ensure that this work has been completed.

What should I look out for in my pre-settlement inspection?

There are plenty of checklists online, which we suggest you save to your phone or print out and take to the pre-settlement inspection with you.

Some of the things you should look out for are:

  • Whether the chattels listed in the sale and purchase agreement are in reasonable working order (e.g. fridge, washing machine, dishwasher – you should ask to run these to check that they are working).
  • Damage to walls which was not previously present (holes in the wall).
  • Damage to carpets, flooring, curtains.
  • Look at ceilings and around toilets, washing machines, dishwashers for any signs of leaks.
  • Do the toilets flush?
  • Are all the electrical sockets working?
  • Are all the lights working?
  • Have there been any broken windows?
  • Do the sinks (kitchen, bathroom, laundry) drain properly?
  • Do the oven and the oven lights work?
  • Does the extractor fan work?

There are no issues, but the house is not in a clean and tidy state, what do I do?

Some purchasers will be surprised to find out that there is no requirement for the vendor to clean the house prior to settlement.

If you would like the vendor to get the house professionally cleaned before settlement, this is something that you should discuss with us before entering into an agreement.

Similarly, if you are concerned about the vendor leaving rubbish at the property, you should speak to us before entering into an agreement. We can negotiate a clause into the agreement which ensures that the rubbish is removed prior to settlement (if the vendor is agreeable of course!).

I’ve completed my pre-settlement inspection, and I have an issue, what should I do?

You should contact your lawyer immediately. They will be able to work with you to use the rights available in the sale and purchase agreement to rectify the issue or issues.

What remedies do I have available to me?

Generally, if there is an issue raised from the pre-settlement inspection, this does not give you a right to cancel the agreement. However, it can give you a ‘right to compensation.’

The following remedies may be available to you:

  1. Asking the vendor to remedy the issue before settlement at their cost; or
  2. Asking to reduce the purchase price to enable you to remedy the issues after settlement yourself; or
  3. An agreed amount is retained on settlement until the issues have been resolved.

What if I find an issue after settlement has been completed?

It is much harder to get a vendor to engage once they have money in hand. However, if you do notice an issue post-settlement, you can get in touch with us to discuss your potential options.

If you have any questions about pre-settlement inspections, please feel free to get in touch with our friendly property team.

What you should know about Te Tiriti o Waitangi

Recently, there has been increasing discussion about the te Tiriti o Waitangi (te Tiriti)/Treaty of Waitangi (the Treaty) and what it means.  As a foundational document for Aotearoa New Zealand, it is important to understand what it says, the spirit and intent of te Tiriti, and what it means today.

How did te Tiriti o Waitangi come about?

Te Tiriti was first signed at Waitangi on 6 February 1840 by 43-46 rangatira, Captain William Hobson and other English settlers.  It was later signed at various other locations throughout Aotearoa.  By the end of 1840, over 500 Māori had signed Te Tiriti (the Māori text) and 39 rangatira had signed the Treaty (the English text).

Te Tiriti was intended to unite Māori and the British who settled in Aotearoa, and to enable the establishment of a British government in Aotearoa to control the increasing number of British settling here.

It is also important to note that the signing of te Tiriti/the Treaty followed the signing of He Whakaputanga (the Declaration of Independence) signed in 1835 which declared New Zealand a sovereign state.

Why did they enter into te Tiriti o Waitangi?

Te Tiriti is a binding agreement between two sovereign nations.  The preamble to the Treaty (English text) recorded the intentions as being to:

  • protect Māori/tribal interests from the encroaching British settlement.
  • provide for British settlement.
  • establish a government to maintain peace and order.

Te Tiriti included similar statements but with a focus on securing tribal rangatiratanga and Māori land ownership.

It is clear from the wording of te Tiriti/the Treaty and from the historical record that, in the context of the time, rangatira and the British Crown agreed to share power and authority.  Both would retain their respective roles and different spheres of influence – the Crown (Governor Hobson) with authority only to control Pākehā within Aotearoa, and rangatira retaining their authority over their hapū and territories.

What does te Tiriti o Waitangi/the Treaty of Waitangi say?

It is well known that the Māori text and the English text have different meanings.  Where there is a difference of interpretation between two versions of a document like this – the law says that the preferred meaning is the one that works against the drafter.  This is called the contra proferentem rule.  This means that the Māori text – which over 500 Māori signed – is the version which is binding on the parties.

In short, te Tiriti says:

  • Rangatira Māori gave the British “kāwanatanga”, the right of governance.  In the English text, Māori ceded “sovereignty” but there was no direct translation for this in Māori.  For this to have been the case, perhaps words like rangatiratanga or mana would have been used.
  • Hapū were guaranteed rangatiratanga over their lands and taonga.  Land would be sold to the Queen at agreed prices.  In the English text, they were guaranteed the undisturbed possession of their properties, including their lands, forests, and fisheries, for as long as they wished to retain them but only the Crown could purchase land from Māori.
  • Māori were promised the same rights and duties of citizenship as the people of England.  Similarly, in English, Māori were promised the benefits of royal protection and full citizenship.

Te Tiriti does not take anything away from the Crown or settlers to Aotearoa.  It records existing rights which Māori had prior to the establishment of the government here and their protection by the Crown.  It makes guarantees to Māori in recognition of the fact that the British were coming into their whenua, their country.

What do people mean by “Treaty principles”?

Over time, our Courts and the Waitangi Tribunal have developed and interpreted Treaty principles to guide the relationship between the Crown and Māori.  This reflects the fact that the Treaty is a binding agreement between the Crown and Māori that applies in various settings today.  Accordingly, the Treaty principles are not static, they evolve to reflect our society, in line with the spirit and intention of te Tiriti.

While there are a number of specific Treaty principles, the key principles include:

  • Partnership – a central Treaty principle based on the relationship created by te Tiriti akin to a partnership with mutual obligations to act reasonably and with the utmost good faith.
  • Active protection – this requires honourable conduct by the Crown and fair processes, including full consultation and – at times – decision-making by those whose interests are to be protected.  It applies to all interests guaranteed to Māori, including intangible properties.
  • Tino rangatiratanga – Māori have mana or chiefly authority over their own lands, people, affairs and resources in line with their pre-existing sovereign authority.
  • Good government – the Crown’s actions must be just and fair in order to demonstrate good government or good governance, in particular keeping its own laws, rules and standards.
  • Equity – the Crown is to act fairly as between Māori and non-Māori citizens, and to remove the longstanding barriers preventing Māori from having a level playing field.  This is not about equal treatment, but rather equitable treatment in the context.
  • Redress – when the Crown breaches te Tiriti/the Treaty, it has a duty to provide redress for those breaches.

This is but a snapshot of what te Tiriti says and the context which it was developed and signed within.  It is a foundational document for Aotearoa and an agreement which – although breached by the Crown on numerous occasions – remains today.  It is important to understand what the texts of te Tiriti/the Treaty say and what they mean.  Various reports from the Waitangi Tribunal provide useful guidance in this respect, including He Whakaputanga me te Tiriti (2014) and Ngā Mātāpono – The Principles (2023/2024).

For assistance with matters relating to potential Treaty breaches and constitutional advice, please contact our Kahurangi Tiriti Team led by Executive Director, Renika Siciliano.

Can you keep your name out of it? Name Suppression in the Employment Context

This case involved an employment dispute where MW, an employee of Spiga Limited, sought non-publication (name suppression) orders after the company breached a Settlement Agreement (Agreement) and disclosed MW’s name publicly in breach of the confidentiality provisions.

The Employment Relations Authority (ERA) initially declined to grant non-publication of MW’s name, leading MW to challenge this decision in the Employment Court.  The Court eventually granted the non-publication order.  The Court’s comments here were of particular significance given the number of parties that became involved in this test case for non-publication orders in employment law.

The Court used this decision to ultimately set out guidelines for considering non-publication orders, including a number of factors such as privacy, tikanga, and the potential impact of publication on social media.  The case was heard by a full bench of the Employment Court and there were two judgments made.  We summarise key aspects drawn from both judgments below.

Majority Decision

The Employment Court reviewed the approach to non-publication orders, emphasising the balance between open justice and privacy interests.  The majority decision adopted the conventional approach and granted a permanent non-publication order for MW’s name and name suppression.

The majority decision was made by Judges Corkill, Holden and King.  In adopting the “conventional approach” here, they focused on the Erceg test and the principles of open justice.

The Erceg test is derived from the Supreme Court case of Erceg v Erceg [2016] NZSC 135, which provides a legal framework or “test” around determining whether a non-publication order should be granted in the civil context.  The test requires an applicant to show that there are sound reasons for a non-publication order, and that these reasons outweigh the presumption of open justice.

The principle of open justice is fundamental in New Zealand’s legal system.  It says that Court proceedings are to be open to the public for transparency and accountability.  There are, however, situations where this is overridden to protect the interests or the privacy of people involved.  Traditionally, this only happens in exceptional circumstances.

Many arguments were put forward specifically focussing on the employment context and the nuances of that space, those arguments included:

  • the focus on relationships between parties in an employment context;
  • the need to preserve confidentiality where there are settlements reached at mediation; and
  • the potential for any Authority or Court decision to adversely affect an individual seeking employment, given that decisions are all publicly available online.

The role of tikanga in this space was also considered quite generally.  The majority acknowledged previous case law and confirmed again, that tikanga is relevant to both the Authority and Court’s approach to non-publication (and employment law generally).  They stated however, that caution must be applied when engaging tikanga and its principles – the Courts are not the makers of tikanga.  Tikanga was described as contextual, and that it should be applied on a case-by-case basis.  They noted that the way in which tikanga is said to apply, whether it will be relevant to the employment relationship, and how much weight will be accorded, will depend on the context.  It was also recognised that the Court and Authority must engage with tikanga through care and manaakitanga, in a way that upholds its mana and integrity.

Minority Decision

Chief Judge Inglis issued a separate decision which reached the same ultimate conclusion, but through a different approach.  Judge Inglis’ approach was that the provisions of the Employment Relations Act and the statutory regime came first, rather than the Erceg test or open justice principles.

Through this lens, she drew on many considerations, with a number relating to and recognising tikanga.  In her view, tikanga can inform the Court’s approach at a general (framework) level and at a case-specific level as it can be “a means or a mechanism to further the objectives of an employment relationship and of the wider jurisdiction”.

In this context, the more holistic and purposive approach is required to account for the relational and specialist nature of this jurisdiction, which tikanga will account for.   Judge Inglis considers that this points squarely away from open justice being given pre-eminent status.

Points of Note

While the minority decision is not binding on future Courts, it does provide some food for thought in terms of how the Authority or Court might look at similar arguments and opens the door for a more bespoke approach in the specialist employment jurisdiction.

At a general level, the Court’s decision here suggests that – even using the conventional approach from the Civil courts – there may be some softening of the test for non-publication in the employment context.

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