We’ve heard a lot of people with a lot of different ideas about what happens to sales, purchases and other transaction while New Zealand remains in lockdown – and we want to clear the air.

No automatic delay to settlement

A national lockdown is unprecedented, and as such, most contracts don’t consider what should actually happen. There is no automatic right to delay settlement just because you are stuck at home. This means most residential and small business transactions are required to proceed as planned – even if the scheduled settlement date falls within the lockdown period.

Settling during Lockdown & access to lawyers

Modern technology is great, and many law firms can complete transactions – from go to woah – from anywhere, and at any time. LINZ and main banks are expecting to still be available during the lockdown (although operating at a reduced capacity). So if both parties want to complete settlement during the lockdown, they probably can. But what happens if you can’t complete settlement?


We expect that most Vendors won’t be able to settle because they won’t be able to move out, and we expect most Purchasers won’t want to settle because they won’t be able to move in. So it makes sense to defer. In that case, the Vendor and Purchaser can always agree between themselves to just wait for the lockdown to be over, and complete settlement at that time. Many legal organisations recommend this approach. But sometimes one party doesn’t want to delay settlement. If both parties haven’t agreed to move settlement date, then it stays as scheduled. So what then?


If you can’t complete settlement and the other party can, then settlement obviously won’t take place - but default interest and other costs can usually be recovered from the defaulting party. If you are concerned about this – please seek legal advice ASAP.

Vacant Possession

On settlement of a residential transaction, a Vendor is usually required to provide vacant possession of the property to the Purchaser. If the Vendor refuses to defer settlement until after the lockdown, a Purchaser might argue that the Vendor is not actually able to provide vacant possession, since the government has prohibited (under threat of arrest) the Purchaser from taking possession. If the Vendor can’t give vacant possession, then they are not in a position to settle, and they cannot claim default interest or other costs.

Working days

Settlements don’t usually take place on days that are not working days. Some commentators have suggested that the Courts might interpret that a lockdown day can’t be a working day, since most of the country is barred from working.

Inspections and Lockdown

When buying residential land you have a contractual right to carry out a pre-purchase inspection to make sure the property is in the condition it was in when you signed the contract. If you’re in lockdown, this obviously can’t take place, however this won’t cause settlement to be deferred. You also won’t be able to pick up keys, but again, this won’t cause settlement to be deferred. The Vendor is still obliged to ensure that on settlement the property is in the same condition it was in on the date of the agreement. If it isn’t, you will still be entitled to make a claim against a Vendor following settlement, even if you didn’t complete your final inspection.

Force Majeure

Those who are still with us may have picked up that we’ve focused on residential and small business transactions. Many commercial contracts include what’s known as a Force Majeure provision. Force Majeure (meaning superior force in French) will usually provide that either party can suspend (and eventually cancel) its obligations under a contract if it is unable to perform as a direct result of a war, riot, strike, natural or man-made disaster or other circumstance of a similar nature. Residential and small business transactions don’t usually include such provisions – once unconditional, you are typically expected to settle.


This article is intended as general information only and should not be acted upon without specific legal advice. iCLAW is a modern firm, and a modern firm operates from anywhere, at any time, remotely or face to face; it doesn’t matter. And we can help.

If you would like any specific advice (or if you are lonely, and just want to chat) please do get in touch.