New Zealand Law Society - Meth test provision in sale and purchase agreement recommended

Meth test provision in sale and purchase agreement recommended

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Until there is a national standard on testing and remediation of properties where methamphetamine ("meth" or "P") has been made or used, legal practitioners advising purchasers should include a "meth test" provision in the Agreement for Sale and Purchase, says Auckland property lawyer Linda Fox.

photo of Linda Fox
Linda Fox. 

Writing in the September 2016 issue of the Law Society Property Law Section's magazine The Property Lawyer, Ms Fox says this may seem unnecessary in some cases, but it is now known and commonly accepted that the meth issue is widespread and not confined to certain parts of the population.

Ms Fox, who is a director of Carson Fox, says purchasers should also be advised to obtain a LIM, to ask the vendor/agent directly if there is any known contamination and get their response in writing, and carry out a meth test "unless your client feels very confident it is not necessary".

There is currently no national standard in place for determining "safe" meth levels. Ms Fox says a committee has been formed, with representatives from across the spectrum of the property industry. Its mandate is to develop a New Zealand standard on the testing and remediation of properties that are found to have been used for the manufacture or use of methamphetamine.

Considering vendor obligations, she says if a landowner has received any notice or demand such as a Cleansing Order issued by the local authority under section 41 of the Health Act 1956 (issued if the property has been identified as a P lab), "a breach of the vendor warranties in the Agreement for Sale and Purchase will result from any silence on the landowner's part, should the property by marketed for sale (whether before or after the property has been decontaminated)."

"Such a notice will appear on the LIM, which a prudent purchaser should obtain in any event, but that in itself will not satisfy the agent's or the landowner's obligations of disclosure or warranty."

Ms Fox says that while some local authorities remove such notices from LIM reports once decontamination is achieved to satisfactory levels, others leave them on the LIM permanently.

"A property file search should always reveal any history of contamination," she says.

"Councils may not, however, become aware of any contamination unless Police have been involved or the owner approaches them. If a meth lab has low contamination levels but has not previously been identified as a meth lab, there is no legal obligation to inform the Council.

"Additionally, Council may issue a dangerous building notice to prevent anyone living or staying at the property until it has been decontaminated and re-tested satisfactorily."

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