Disclosing Retrofit Insulation Loans When Selling Residential Property

12 October, 2019 | Kandice Reilly

Many homeowners have taken advantage of council programmes for financial assistance with insulating properties. But what happens to these loans when a property is sold before the loan is fully repaid.

How the retrofit loans work

Councils in Auckland, Hawkes Bay, Wellington, Tasman and Dunedin provided loans to cover (some of) the costs of retrofitting existing properties with insulation. The loans are then repaid to the Council via a targeted rate.


When a property is sold with an outstanding amount owing on the retrofit programme, it then becomes an issue of disclosure. A written provision must be included in any sale agreement recording that disclosure has been made.

In the current version of the ADLS agreement for Sale and Purchase, Clause 7.1(1) of the agreement provides the vendor warrants that it has no knowledge of any outstanding requirement for any local or government authority and clause 7.3(3) contains a warranty that there are no rates, water rates or charges outstanding.

Repaying the loan

When acting for a vendor the solicitors need to make sure the Council Retrofit programme team are aware of the sale and arrange to pay the Retrofit Loan in full on settlement (unless the purchaser agrees to take over liability for those increased rates – which would need to be a specific clause in the sale agreement).

The vendor needs to be aware of how repayment of this loan will figure into final settlement figures.

Is your vendor’s property affected?

If the property is subject to a targeted Council rate, the LIM report should state that the property is on the “PIR Register” (Property Interests Register) with a specific note about a retrofit loan. The Council will need to be contacted directly to discover how much is owed on the loan. As with all Council interactions – this can take time and should be completed before you begin marketing the property.

For further advice on Council Retrofit Loans, issues of disclosure or for assistance drafting a clause that passes the targeted rate onto the purchaser, please contact experienced Registered Legal Executive, Kandice Reilly by phone on 09 837 6884 or email kandice.reilly@smithpartners.co.nz.

Do you need assistance with the rules around disclosure for retrofit loans?

Contact NZ Property Specialist, Kandice Moore today to set up an appointment.

email Kandice
09 837 6884

About the author

Kandice is a registered Legal Executive with over 12 years experience working in the law. Specialising in conveyancing and property law, Kandice helps make the process of buying, selling and refinancing property easy and stress free. Clients appreciate Kandice’s meticulous
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