JULY 2010
UPDATE: UNIT TITLES ACT 2010 The Unit Titles Act 2010 (2010 Act) was passed into law on 1 April 2010 with the intention (eventually) of replacing the 1972 Act. The 2010 Act will be the primary legislation relating to the creation and management of developments, such as apartment blocks and flats. It is not yet in force, and a date has yet to be set for its commencement as accompanyying regulations are yet to be drafted.... WHAT DO YOU DO IF YOU ARE OFFERED AN INCENTIVE THAT YOU CAN'T REFUSE? If you are occupying leased premises that are coming up for rent review and a right of renewal, you will look around the market and discover that landlords are desperate to find tenants in curernt recessionary times. The chances are that you will receive an offer that you can't refuse... OPINION: THE MEDIA BECOMES PUBLIC OPINION I have been up close and personal with the media on two occasions recently. The first relatEs to May Wang, the Chinese businesswoman who put the dairy farm project together. Knight Coldicutt does not act for May, but for the ultimate purchaser, a Hong Kong listed company... [request]
JUNE 2010
OBLIGATIONS OF PROFESSIONAL TRUSTEES Being a professional independent trustee is not all it is cracked up to be. The obligations imposed on that trustee are greater than many people think.... LAND INFORMATION MEMORANDUM (LIM REPORTS) Obtaining a LIM report is an essential part of any property purchase (whether residential, commercial or rural). Knight Coldicutt has recently been caught up in a case where a client refused to allow us to obtain a LIM.... OPINION: THE PROPERTY MARKET TAKES A CUP OF TEA Reading recent commentary from various experts on the property market amazes me. Anybody who owns propety is just as much of an expert... so here's my expert opinion!... [request]
MAY 2010
FORTRESS FONTERRA: THE FONTERRA CAPITAL STRUCTURE CHANGES Fonterra recently announced Stage 3 of its proposed medium term capital structure. On the face of it, the proposal is not exactly radical. However, very little detail is publicly available and as all good lawyers know - that's where the devil lies.... WELLINGTON REVIVAL It is four years since we opened our branch office in Wellington to service the increasing needs of clients who are based in the Wellington region or have substantial projects there. Providing legal services to clients with interests in Wellngton and, for that matter, other locations nationwide is certainly not new to us.... CREDITORS' COMPROMISES Creditors' compromises are becoming increasingly popular as each decade goes by! Many such arrangements involve high profile individuals who want to continue working in their businesses without being adjudicated bankrupt.... [request]
APRIL 2010
A TRAVESTY OF JUSTICE Often the court system does not deliver justice. A Knight Coldicutt client was recently challenged in relation to a mortgage priority document. The facts are simple. Our client advanced a first mortgage, and agreed a priority amount with the second mortgagee. The standard banking priority deed was used which, upon reflection, is confusing and can be interpreted in various ways.... THE IMPORTANCE OF PAYING A MARKET SALARY At Knight Coldicutt we do not claim to be tax experts, however we would like to draw your attention to a recent decision of the Taxation Review Authority (TRA) which upheld the Inland Revenue's assessment that a series of current account drawings made by a property developer from his Trust and corporate entities amounted to tax avoidance.... UPDATE: UNIT TITLES BILL PASSES INTO LAW The Unit Titles Act 1972 is set to be changed, affecting bodies corporate and consent processes for multi-unit developments, if the new Bill (which received its third reading in Parliament on 1 April 2010) is passed. The Bill repeals and replaces the Unit Titles Act 1972 to provide a new legal framework for the joint ownership and management of land, buildings and facilities on a... [request]
MARCH 2010
IRD v THE TRUST Yes, the IRD is ploughing resources into investigating trusts. Admittedly it is focusing on high dollar value transactions, but this will filter down, which makes it extremely important that your trusts are administered in the right way.... MANAGEMENT RIGHTS AND ENCUMBRANCES In a decision in the Court of Appeal in November 2009 ( Jackson v Menere Mews Management Limited) the Court was faced with an appeal from the High Court on questions as to whether a memorandum of encumbrance is a mortgage and whether it is redeemable (i.e. the owner is entitled to a discharge of it) before expiry of its term.... [request]
FEBRUARY 2010
IT'S SIMPLE - GOOD SERVICE IS WHAT YOU WANT We are into a new decade. A more optimistic year is well underway. The weather that this month typically brings to Auckland makes it even more worthwhile living here. There is a lot to look forward to... PROPOSED GST DOMESTIC REVERSE CHARGE - A GOOD IDEA? GST is a hazardous tax, not only for taxpayers but also for the Government. Unlike income tax, the Government has a commitment to refund GST, and this part of the GST mechanism leaves the tax open to manipulation. The hazard is greatest where the... [request]
DECEMBER 2009
SETTLEMENT NOTICE SERVICE Beware of notice provisions in sale and purchase agreements. A recent High Court case highlights the importance of keeping addresses up-to-date insofar as service of settlement notices and cancellation notices under certain sale... CHANGES TO THE DISTRICT COURT PROCESS The new District Court Rules have undergone major revision and kicked into force on 1 November 2009. The core philosophy puts access to justice ahead of other competing considerations, with the focus on speedy and inexpensive determination... FIXED FEES - MORE BANG FOR YOUR BUCK The recession is over but that doesn't mean that vacant office and retail space will be filled, new industrial buildings will be completed, or large volumes of residential houses and apartments will be built. What we are certain of is that property people still need sound, pragmatic, commercial property advice... [request]
NOVEMBER 2009
INCOME TAX ACT - NEW ASSOCIATED PERSONS RULES The definition of Associated Persons for income tax purposes has been amended. The relevant legislation making this change is the Taxation (International Taxation, Life Insurance and Remedial Matters) Act which was enacted on 6 October 2009.... OPINION: WHERE WILL NEW ZEALAND BE 12 MONTHS FROM NOW? We invited some experts to predict the state of the New Zealand economy this time next year. Here are their predictions. We welcome your comments - be prepared to be published! There is an accurate and time-proven way to find out what exchange rates, inflation, interest rates and other key economic data will be in twelve months time. Simply ask... [request]
OCTOBER 2009
'SAFE AS HOUSES'. YEAH RIGHT! Like many lawyers, we act for owners of leaky homes. We are currently dealing with a case for clients Nicki Turner and Tracey MacLeod, whose building has all the usual problems associated with moisture ingress... UNIT TITLES BILL - RECOMMENDED CHANGES In May 2009 we reported on the closing of submissions on the Unit Titles Bill and the key changes that the Bill will bring. The Social Services Committee recently released its recommendations as to the changes... SIZE DOES MATTER We have recently encountered a number of arguments raised by apartment purchasers, after being called on to settle, that the size of the apartment as-built (as shown on the final subdivision plan) does not match the size shown on the preliminary plans... [request]
SEPTEMBER 2009
BANKS REQUIREMENTS FOR FUTURE FUNDING After a fairly quiet patch following the collapse of the second tier finance industry, there are signs of life in the property development industry. It is important to start planning your next development now... DISPUTES TRIBUNAL Maximum claim levels have increased following the passing of the Disputes Tribunals Amendment Act 2009. The maximum claim level has increased from $7,500 to $15,000, or, with the consent of both parties, from $12,000 to $20,000.... [request]
AUGUST 2009
YOU HEARD IT HERE FIRST... The standard Agreement for Sale and Purchase form that is co-authored by the Real Estate Institute and the Auckland District Law Society will possibly fall into oblivion. The Real Estate Institute has produced its own format... DEVELOPER'S LIABILITY FOR BUILDING DEFECTS CLARIFIED Developers can take some comfort from a recent case regarding a leaky apartment claim in which the Court dismissed claims against a developer that he was personally negligent... [request]
JULY 2009
MISSING THE POINT IN THE CONSTRUCTION CONTRACTS ACT 2002! So you're a builder and I'm a subbie. I put my progress claim in on your job and you claim that I didn't do the work right so you're not paying until it's sorted out somewhere in the distant future. It looks to me like things aren't going so well for you on another job and you want to avoid paying me so you can use the money elsewhere. But it's not the bad old days... [request]
JUNE 2009
GETTING IT RIGHT WHEN SELLING OFF THE PLANS Developers - have you had trouble with purchasers claiming just prior to settlement that their apartment is not the same as what was shown in the sales brochure? You need to make sure that your sales brochure... LEAKY BUILDING CLAIMS & ADJUDICATION Just when property developers and building contractors thought matters couldn't get worse with the current economic climate, there is a growing awareness that the Construction Contracts Act 2002 can add to their misery by... [request]
MAY 2009
NEW UNIT TITLES BILL CREEPS A STEP FURTHER April saw the close of public submissions on the Unit Titles Bill marking the first significant sign of progress since the draft Bill was released in early 2008. The key changes from the 1972 Act... TRAPS WHEN DEALING WITH MAORI LAND Significant areas of land in New Zealand are Maori land but the exact status of the land can at times be difficult to determine. The matter is clear if the Maori Land Court has determined the issue and registered a status... THE RECESSION IS OVER - YEAH RIGHT! New Zealand businesses have had a relatively difficult couple of years. Don't forget that Alan Bollard cranked up interest rates in 2006 in an effort to take the heat out of the economy. In hindsight, this may have been New Zealand's saviour.... [request]
APRIL 2009
EXCHANGE YOUR PROPERTY In Law Matters March 2009 we introduced the KC Property Trade & Exchange Register, which was launched last month to facilitate the trade of property interests at an agreed value, especially in the current economic climate with a shortage of motivated cash purchasers.... EMPLOYMENT LAW As anticipated, the National Government has moved quickly on implementing new employment laws resulting in a phase of considerable change. We are now distributing a monthly update on employment law changes that employers need to be... PROPORTIONAL OWNERSHIP We wrote to all of our clients in February inviting expressions of interest in investing in commercial property through proportional ownership. There has been substantial interest and investors with capital who are finding that there are limited options for earning good returns are... THE NEW ZEALAND PROPERTY GROUP (NZPG) held its Annual General Meeting last month. NZPG members include significant property players in the market and the Group acts as a collective voice for issues relating to the property market, particularly in relation to local and central Government regulation of development.... [request]
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