Deed Vs Agreement Nz

When it comes to real estate transactions in New Zealand, two common terms that often get confused are «deed» and «agreement.» Even though both documents are important in the transfer of property ownership, they have different meanings and serve different purposes.

The Deed

A deed is a legal document that proves ownership of a property. In New Zealand, a deed is also referred to as a «title.» It is a document that shows the history of ownership of a property and records any encumbrances or restrictions that may affect it. A deed is typically signed by both the buyer and the seller when a property is transferred, and it is registered with the Land Registry to make it official.

The Agreement

An agreement, on the other hand, is a contract between the buyer and the seller that outlines the terms and conditions of the property sale. It is also known as a «sale and purchase agreement» or «SPA.» The agreement specifies the price of the property, the payment terms, and any other important details such as the date of settlement and any conditions that must be met before the sale is complete.

The agreement is not a legally binding document until all parties have signed it. Once the agreement is signed, it becomes a legally enforceable contract. The agreement is also usually conditional, meaning that the sale is contingent upon the buyer meeting certain conditions, such as obtaining a mortgage or obtaining a satisfactory building report.

Which is More Important?

Both the deed and agreement are important documents in a property sale, but they serve different purposes. The deed proves ownership of the property, while the agreement outlines the terms of the sale. In the event of a dispute, the agreement would be the document that a court would look to for guidance. However, the deed is the ultimate proof of ownership and is essential for any future transactions that may involve the property.

Conclusion

In summary, a deed and agreement are two distinct documents that are crucial in any property sale in New Zealand. While the agreement outlines the terms of the sale, the deed proves ownership of the property. As a professional, I would advise sellers and buyers to seek legal advice to ensure that both documents are properly drafted and executed to avoid any future legal complications.