Thomson Reuters today published two news items reflecting the opposing sides of the current debate over the recently released REINZ forms of agreement for sale and purchase.

REINZ National President Mike Elford has issued a letter to members which has rapidly achieved wider circulation.  In it he acknowledges that the new forms have aroused "lovely debate", though he suggests that most comments have been positive.

Elford states that the reason for him writing the letter was to reassure members that the forms were legally sound and did not require immediate essential changes. He also said that it was "not acceptable" for lawyers to reject the forms.

On the other side of the debate, Christopher Green and Matthew Carroll of Chapman Tripp in their article "New is not better in REINZ sale and purchase agreement" strongly recommend that both sellers and buyers continue with the ADLS form which has been in use for over 20 years.

In particular they highlight:

• a greater scope in the REINZ form for a buyer to delay settlement and potentially cancel the agreement;
• wider and more ambiguous warranties (now called promises);
• a much more cumbersome process for conditions, with increased scope for disputes; and
• drafting deficiencies - for example the failure to define "securities".

Green and Carroll note that their concerns are widely shared in the legal community and strongly recommend that:

• buyers and sellers obtain legal advice before entering into an agreement for sale and purchase; and
• the ADLS form continue to be used until the problems with the REINZ form have been solved.