Buying property? Strike out the ‘conditions’ box at your peril

Katrina Wood
Most lawyers will be familiar with the standard form agreement for sale and purchase of real estate (ASPRE) which is produced by The Law Association and the Real Estate Institute.

The front page of the ASPRE contains the following box:

If a purchaser wishes to include its own conditions instead of using the conditions referred to in that box, then often the entire box will be struck out.

A recent case Reid v Laurelwood Vicki Ltd [2025] NZHC 441; BC202560494 considered whether striking out the entire conditions box meant the entire clause 9 of the General Terms of Sale was to be treated as struck out or whether it was just each of the respective conditions in clause 9 which were to be treated as struck out.

This is an important point for all transactions which use the ASPRE because clause 9 includes at subclause 9.10, an “operation of conditions” clause. That subclause specifies, amongst other things, how the agreement may be avoided for non-fulfilment of a condition, whether it be one of the conditions specified on the front page or a condition which is specified elsewhere in the agreement.

So, without clause 9 (and therefore subclause 9.10), there is a ‘hole’ in the ASPRE with respect to how any conditions in the further terms operate.

Fortunately, Dunningham J determined that the striking out of the conditions box merely meant that each of the conditions referred to in the conditions box were to be treated as struck out and therefore clause 9.10 (the operation of conditions clause) remained operative. So, the purchaser’s own conditions which were included in the further terms were regulated by clause 9.10 (and there was no ‘hole’).

However, the fact that this issue made it to court ought to cause practitioners and agents to think twice before striking out the conditions box and instead err on the side of caution by selecting ‘No’ for each of the conditions. Selecting ‘No’ is also the preferable approach, given that the conditions box deals with the questions of OIO and Land Act Consent.

Separately, practitioners may find Reid v Laurelwood Vicki Limited an interesting read because it also addressed the question of whether a condition could be treated as fulfilled, despite a failure to strictly comply with clause 9.10. But that is a topic for another day!

Katrina Wood is a partner at Saunders Robinsons Brown and a member of The Law Association’s Documents & Precedents Committee