ADLS Agreement for Sale and Purchase of Real Estate

What it is

The ADLS Agreement for Sale and Purchase of Real Estate is the standard contract form used for residential property sales in New Zealand. It is not a statute — it is a contract template jointly published and updated by the Auckland District Law Society (ADLS) and the Real Estate Institute of New Zealand (REINZ).

Because the ADLS form is used for the vast majority of NZ residential transactions, its language has acquired near-statutory weight in practice. Courts interpret the form frequently, and its clauses are well-understood by NZ property lawyers. Using a non-ADLS form for a residential sale is unusual and typically signals a complication — a bespoke commercial arrangement, a family transfer, or a transaction where one party has specific reasons to depart from the standard.

The current edition at the time of writing is the 11th Edition (with variations released periodically). Older versions (9th, 10th edition) appear on archived listings and can still be relevant for settled transactions. The edition number is typically printed on the agreement.

What it covers

• Identification of the parties — vendor, purchaser, their legal entities if any.
• Property identification — address, legal description, title reference, estate (fee simple, leasehold, cross lease, unit title).
• Chattels and fixtures — what is included in the sale.
• Purchase price — total price, GST treatment, deposit amount and when it is payable.
• Conditions — finance, LIM, building report, sale of another property, title search, and other bespoke conditions.
• Vendor warranties and undertakings — written guarantees the vendor gives the purchaser about the property and the transaction.
• Settlement date — when title transfers and the balance of purchase price is paid.
• Possession date — when the purchaser takes possession (usually the same as settlement).
• Default provisions — what happens if either party fails to settle.
• Standard general terms — notices, disputes, interpretation.

What it gives you

• A tested legal framework. The ADLS form's clauses have been interpreted by NZ courts over decades; the risk of unexpected readings is low relative to bespoke contracts.
• Standard vendor warranties that give purchasers defined rights if the property's state on settlement differs from what was warranted.
• Defined conditions mechanics — the process for satisfying, waiving, or cancelling on a condition is set out clearly in the form.
• Predictable settlement process — the standard form governs how settlement is conducted between solicitors.

Key structural elements

Conditions

Conditions are requirements that must be satisfied before the contract becomes unconditional. Standard conditions in NZ residential transactions include:

• Finance condition — the purchaser obtaining bank finance approval. Usually 10 to 15 working days.
• LIM condition — the purchaser obtaining and being satisfied with a Land Information Memorandum from the council. Usually 10 working days.
• Building report condition — the purchaser obtaining and being satisfied with a building inspection. Usually 10 working days.
• Title condition — the purchaser's solicitor being satisfied with the title. Usually a short window.
• Sale of other property — where the purchaser needs to sell their existing home to complete.

Auction contracts are typically unconditional — no conditions are permitted. This is why auction bidders must complete all due diligence before the auction. See Method of sale.

Vendor warranties and undertakings

These are the vendor's written guarantees about the property and the transaction. The ADLS form's standard warranties include representations that:

• The vendor has not received any notices or demands relating to the property that have not been disclosed.
• The chattels and fixtures will be in reasonable working order at settlement (unless otherwise disclosed).
• The property and its fixtures will pass to the purchaser unencumbered (unless otherwise disclosed).
• All works done by the vendor to the property are compliant with the Building Code and all required permits and consents have been obtained.
• No notices or demands have been received from any local or government authority in relation to the property.

Breach of a warranty gives the purchaser a right to compensation or equitable set-off — typically a reduction in the purchase price equal to the cost of remedying the warranted condition. In some cases, breach can give grounds for cancellation.

Vendor warranties added to the standard form

The standard form can be extended by adding specific vendor warranties in a schedule. Common additions include:

• Undertakings to complete specific repair works before settlement (e.g., borer treatment, repairs to a toilet).
• Confirmations about specific Building Code or Healthy Homes compliance.
• Acknowledgements of specific known issues in lieu of disclosure elsewhere.

Added warranties should be the vendor's decision, not the agency's. An agency that drafts a vendor warranty without the vendor's specific instruction, and then sends it to the vendor's solicitor for approval, is commonly using the ADLS structure to close a deal the vendor may not have specifically authorised. Rule 9.1 of the Professional Conduct Rules (best interests of client) applies. See "Our lawyer needs to check": who pays.

Deposit

The deposit is usually 10% of the purchase price, paid to the agency's trust account on the contract going unconditional. The deposit is held in trust until settlement (or until the commission and other approved deductions are taken). A non-standard deposit amount (lower than 10%, or higher) can be negotiated but is unusual.

Settlement and possession

Settlement is the date on which title transfers and the purchaser pays the balance of the purchase price. Possession is usually on the same day. Settlement typically occurs 6 to 8 weeks after the contract goes unconditional, though this varies.

How the ADLS form is applied in practice

In a typical NZ residential transaction:

• The agency's salesperson fills in the ADLS form with the purchaser on the day of offer.
• The form is sent to the vendor (or the vendor's solicitor) for consideration.
• Negotiations — on price, conditions, settlement date — result in a signed version.
• The signed contract goes to both parties' solicitors.
• Conditions are worked through during the condition period (typically 10 to 15 working days).
• Once all conditions are satisfied or waived, the contract goes unconditional.
• Settlement follows on the date specified in the contract.

The salesperson is filling out a legal document during the offer process. Under the REA Act 2008, the salesperson is authorised to do so as part of real estate agency work. However, salespersons are not lawyers; complex amendments to the standard form should be reviewed by the vendor's or purchaser's solicitor before signing.

Common friction points

Added warranties drafted by the agency

The agency drafts a "vendor warranty and undertaking" in response to buyer concerns (for example, about borer, piles, or a non-working appliance), then sends it to the vendor's solicitor for review. The vendor may or may not have specifically agreed to the substance of the warranty. The structural issue is that the warranty commits the vendor to future action while benefitting the agency (by closing the sale) and the purchaser (by getting assurance). The cost falls on the vendor.

The response: any added warranty should be the vendor's specific decision. "Please send me the proposed warranty for my consideration before involving the solicitor" is a reasonable request that the agency should accommodate under Rule 9.1. If the warranty is drafted and sent without the vendor's specific approval, Rule 9.1 and NZ contract law's course-of-dealing doctrine provide grounds to push back — see Selective Approval Theatre.

Chattels list disputes

What is included in the sale — specifically which chattels transfer with the property — is frequently the source of small but memorable disputes. The ADLS form has a chattels section that must be filled in accurately. Items not specifically listed are not transferred.

Condition dates

The exact number of working days for each condition matters. Ten working days is typical but not automatic. A short window (five working days) on finance may not be enough for a first-home buyer; a short window on building report may not allow a thorough inspection. Aligning the condition windows with the purchaser's realistic timeline is part of the negotiation.

Settlement-date friction

Where the purchaser needs to settle on the same day as they sell another property, or the vendor needs to buy another property simultaneously, settlement-date alignment is critical. A contract that settles a week earlier or later than a connected transaction creates cash-flow and logistical problems. Check settlement dates against your entire transaction chain before signing.

When you might cite the ADLS form

• When the vendor is asked to add a warranty. The ADLS form distinguishes between standard warranties and added ones. Added warranties are specific commitments — they require specific vendor authorisation, not pre-authorisation through an agency agreement.
• When a dispute arises about what was warranted. The form's wording, interpreted alongside NZ contract law, determines what the vendor did and did not guarantee.
• When condition dates conflict with reasonable purchaser due diligence. The ADLS form's standard condition mechanics provide the framework for extending or amending.
• When settlement is compromised by a breach of warranty. Equitable set-off against the purchase price at settlement is the standard remedy.

Related rules

• Real Estate Agents Act 2008 — licensee duties when completing the ADLS form for parties.
• Professional Conduct and Client Care Rules 2012 — Rule 9.1 (best interests) and Rule 9.2 (misleading conduct).
• Consumer Guarantees Act 1993 — applies to the licensee's service in completing the ADLS form.
• Fair Trading Act 1986 — representations about the property made during the offer process.
• Unit Titles Act 2010 — mandatory disclosure statements for unit title property, supplement the ADLS form.

Authoritative sources

• ADLS (Auckland District Law Society): adls.org.nz — publisher of the form; current editions available by subscription.
• REINZ: reinz.co.nz — joint publisher.
• Real Estate Authority guidance on Sale and Purchase: rea.govt.nz
• NZ Law Society property-law resources: lawsociety.org.nz

Our guides that use this form

• The agency agreement, clause by clause
• Who drafts your disclosure document?
• Selective Approval Theatre