A Good Property Lawyer

Your lawyer and your accountant are your safety net when buying an investment property. Not only will they save you money and stress in the beginning, they can lay the groundwork to prevent future speed bumps. So naturally it’s essential that you employ someone you trust and who knows what they’re doing.

You’re not just after any old lawyer. When it comes to property, it’s best to find a lawyer who specialises in that area, also known as a conveyencing lawyer. To help you put your trust where it’s warranted, here’s the most important things a good property lawyer should know.

They should …

Know all the laws and rules governing purchases and sales

Don’t assume this is standard, make sure of it.

Advise on the Property Relationship Act if appropriate

Your property lawyer should be up to speed on how the Property Relationship Act could affect you, depending on your circumstances. It’s not just a matter of your romantic partner but any party who could be involved in the future of your asset needs to be considered. Having an agreement in place before you buy is just one of the many available options, all of which your lawyer should bring to your attention.

Understand the Residential Tenancies Act and the Building Act

Because you’re looking at an investment rather than buying your own home, you’re more than likely going to be renting it out. Your property lawyer should be able to advise you of your rights as owner and as a property manager.

When it comes to the physical structure of your investment, the Building Act covers the products used in construction and the legal processes that should have been followed when it was built or any extensions were added. You don’t want to be held accountable for something the previous owners did or did not do.

As a bare minimum search the title and read the contract

Once you get a sale and purchase agreement, your lawyer is the first person you should call. They need to go through the agreement and make sure the right clauses are included and that you understand what you’re getting into. Your lawyer should also be chasing the LIM report, checking the property file and that the correct legal structure is in place.

Be a property investor themselves

This is a suggestion rather than a requirement, but the advice of someone who understands your perspective from the inside is worth its weight in gold. In my experience the majority of property lawyers don’t actually own an investment property themselves, so it pays to check.

Know the advantages and disadvantages of holding a property in an LTC, in your own name, a partnership or trust

There are so many options for ownership now and each has its own good and bad points. Which is right for you depends on your situation and what your goals are, and your lawyer should be able to advise you on that.

Establish whether you will be a trader, an investor or both

Any IRD investigation into your property transaction will be based on your clear intention when you made the investment, rather than what ends up occurring. Therefore what you say to your lawyer is important. If you’re planning on selling the property off reasonably quickly, you’ll need to be registered as a trader. The legal structure needs to be correct to prevent any trouble in the future and to protect the existing properties you want to hold on to.

Have relevant experience in the type of investment you are involved in

From residential to commercial, a block of flats to a freestanding house, each different type of building has its own set of requirements. We all know lawyers are good talkers, and I have found that if a lawyer doesn’t have experience with the type you’re looking at, they’ll wing it. Which means you might miss out without even realising it.

Be listed on a local property specialist website such as www.propertylawyers.co.nz

Membership of such an association is a good sign of their experience. There are several websites/associations, I’ve just picked out the one above as it is one of the most well known.

Happily provide a quote before any work is undertaken

Don’t listen to any excuses. If the lawyer you’re considering really does have the experience you’re looking for they should have a pretty good idea of how much time it will take to deal with your case. And there shouldn’t be any reason why they can’t provide you with a formal, written quote.

Remember, a sales and purchase agreement is a binding legal document and has been created by lawyers themselves. That’s why it’s so important your lawyer knows their stuff. It’s a big decision, and putting in the effort beforehand will save you money, heartache and stress in the long run.