FAQ

A Will sets out what you want to happen to your property after you die. It can also contain information about who will look after your children if you die and what you would like to happen to your body. An Enduring Power of Attorney nominates people to make decisions for you while you are alive in the event that you lack mental capacity to make those decisions for yourself. There are separate Enduring Power of Attorney documents for property matters and for care and welfare matters.

For both Wills and Enduring Powers of Attorney there are legal formalities that must be complied with and there are important considerations to take into account when deciding what provisions are to be made, which mean that having a thorough conversation with us is vital to ensure that the documents are fit for purpose. For all inquiries regarding Wills or Enduring Powers of Attorney please contact us.

It is quite common for family members to lend money to other family members. It is very important that these loans are documented so that it can be proven, at a later date, that the advance of money was intended to be a loan and not a gift. This is important for a number of reasons including being able to require repayment in the future (maybe if circumstances change), and also so the borrower can prove that the money was a loan and not income if questioned by Inland Revenue or Work and Income. The documentation does not need to be complicated but there are certain matters that must be properly addressed in the documents. For this reason we strongly advise that when family members are lending money that a conversation be had with us so that we can assist by preparing appropriate documentation.

A contracting out agreement is an agreement between parties to a domestic relationship (ie when married, in a civil union or a de facto relationship) that modifies the rules that will apply when the relationship ends. These default rules are contained in the Property (Relationships) Act.

Clearly such an agreement is necessary where the partners have agreed that when the relationship ends the home, chattels and other relationship property will not be divided equally between them. In the absence of an agreement the default rules in the Act that generally require equal sharing of relationship property will apply to people who have been in a relationship that has lasted three years. The rules can apply before this time in exceptional circumstances, such as if there is a child of the relationship.

However there are other circumstances where such an agreement is desirable. The first is when it is wanted to show that there is no domestic relationship. This in can occur, for example, where a person has a long-term border living in another person's home with him or her. We have recently come across several cases where long-term borders challenged the status of the relationship when the boarding ended, where the parties have fallen into argument, to claim a de facto relationship existed.

Making a contracting out agreement is often a difficult subject to discuss with a prospective life partner, but it is vitally important that it is discussed and that an agreement is entered into well before the three year time period has elapsed if it is intended relationship property will not be divided 50-50 at the end of the relationship.

This is a complex area of law and anybody who may need or benefit from such an agreement should contact us for further guidance.

We recommend that everybody has a will. The reason for this is that we do not know what property you will own when you die, as opposed to now. Particularly with the advent of KiwiSaver we are finding that people tend to have property that they overlook when thinking about making a will.

A will can be a simple document but there are certain rules that have to be followed when a will is made, and for this reason it is definitely advisable to seek assistance from us.

If you do not have a will and you have assets that exceed $15,000 in value in any one place (such as at the bank or a KiwiSaver account) then the process for administering the estate becomes significantly more complex and expensive. Also, if you do not have a will then there is a statutory formula applied to determine who is entitled to receive your estate, or shares of it, which may not result in the same distributions as you would have wanted. For this reason it is definitely preferable that you have a will.

Feel free to contact us to discuss this matter further.

This is a question we are increasingly being asked by people who are in business, whether they be sole traders, partners in a partnership or directors of a company.

The key to protecting assets is to have a robust structure in place to hold the assets before it becomes necessary to safeguard the assets. Once an accident happens at work or once the work debt is incurred leading to financial difficulties it is too late to try to restructure your affairs to minimise liability. It is however quite permissible to structure your affairs now so that in the event that the business faces difficulties in the future there is a separation between the business and the owner's major assets.

Commonly the solution involves the use of the limited liability company and a trust, however there is no single correct solution. The best structure for your particular circumstances depends upon those circumstances.

In providing advice regarding business structuring and estate / asset structuring it is really useful to have the combined opinions of the client and his or her accountant, and for that purpose we tend to encourage round-table meetings involving all relevant people.

If you are in business then it is really important that you take the time to have a conversation with us about future proofing your business and your personal assets.

A Land Information Memorandum (LIM) provides information held by a territorial authority (such as a district council) on a property (“Council”). While not essential, it is advisable to obtain a LIM in relation to any property you are interested in purchasing — after all, it is likely to be your most significant asset.

A LIM may seem expensive. In our experience they provide peace of mind when clear of any issues, and real savings when shortcomings are identified before a purchase contract becomes unconditional.

A LIM might include information about things such as:

• information identifying any special feature or characteristic of the property concerned, including potential erosion, avulsion, falling debris, subsidence, slippage, alluvion, or inundation, or likely presence of hazardous contaminants. A LIM may show areas prone to flooding or zones where heavy rain may pond. A property may be listed for sale during dry weather, when these issues would not otherwise be noticeable to you;
• information on private and public stormwater and sewerage drains as shown in the Council’s records;
• any information relating to the supply of water to the property;
• information relating to any rates owing in relation to the property:
• information concerning any consent, certificate, notice, order, or requisition affecting the property or any building on the property previously issued by the Council;
• the information required to be provided to a Council on the completion of certain residential building work by the building contractor;
• information concerning any certificate issued by a building certifier, such as completion certificates for any building work;
• information notified to the Council under the Weathertight Homes Resolution Services Act 2006 (ie whether there is a record of any home on the property being a “leaky home”;
• information relating to the use to which that property may be put and conditions attached to that use;
• information which has been notified to the Council by any statutory organisation having the power to classify property or buildings for any purpose;
• any information which has been notified to the Council by any network utility operator, such as when new roads or power pylons are planned to be constructed, which may affect both the property value and your enjoyment of it.

A LIM report can be particularly important if you want to carry out alterations or additions to the property or to subdivide the property.

If there is a solid fuel burner in the house you are looking to purchase the LIM will tell you if a consent was issued for its installation. Even if it was correctly installed, if there was no consent obtained your house insurance may be invalidated if the burner causes a fire.

You should always compare the information on the LIM with what is physically at the property. As lawyers we do not know anything about what is at the property (we work in our office after all). If there is evidence of building work at the property, for example, and no mention of it in the LIM, you need to tell us.

It is up to you to read and approve the LIM. If you require assistance in understanding the content of the LIM you have ordered, you can discuss it with us and we can provide advice in respect of any legal issues. If non-legal questions arise in the LIM we will refer you to other professionals.

If any problems are discovered and your sale and purchase agreement is subject to your approval of the LIM, you can request that the unsatisfactory aspects of the LIM are remedied (if possible) or possibly cancel the contract. We will be able to advise you on your legal options if you are concerned with the content of the LIM report.

Cross-lease titles are most commonly used for developments where two or more houses are built on one piece of land to utilise the land to the maximum limit allowed by planning rules

Under a cross-lease title the land is owned by all of the owners of the flats built on that land, who then cross lease the flats to the various owners. Houses, flats and units are commonly referred to as 'flats' in this context regardless of size or shape.

Ownership is held under a cross-lease title, which is so called because it consists of two parts:

1. 1. a share in the freehold title of the land; and
   2. a lease of the particular flat for (usually) 999 years from the date the cross-lease was established.

Often there will be a strip or area of land that is the shared, such as part of the driveway which provides access to the public road. The cost of any repairs to this area is usually shared between the flat owners.

It is very important that you carefully check the plan that defines the flat on the property title (commonly called a “flats plan”) and ensure that the shape of all buildings is accurate, and complete in all respects. Subsequent additions after the initial flats plan was registered such as carports, garages or decks are sometimes erected without being recorded on the title. This can lead to complications later on when you come to sell, or you apply to build your own extensions. If you undertake any building work that changes the external size or shape of the flat a surveyor must prepare a new flats plan which we will register on the property title, along with making any required modifications to the lease documents.

Your rights and obligations as lessee/owner (“owner”) of the flat are set out in a memorandum of lease, which is recorded on the property title.

A Memorandum of Lease typically contains provisions similar to these (remembering these are not necessarily the lease conditions of any particular property and individual advice is always required in respect of any particular property):

1. 1. The lease for a term of 999 years.
   2. A rental per year is provided for, but in practice is never paid.
   3. The flat owner has exclusive use of his/her/their flat.
   4. The lease contains a land covenant which creates, for the owner of each flat, sole and exclusive rights for the use and enjoyment of that part of the land marked on the flats plan as being associated with the flat, and prohibits the flat owner from occupying the neighbouring flat owners area.
   5. Each flat owner is responsible for their own maintenance and repairs, land rates, water rates, electricity expenses, insurance, etc. There may be joint responsibility for repairs to any common property such as driveways, boundary fences, underground pipes serving both flats, etc.
   6. Insurance is mandatory.
   7. Any external alteration of the flat or structural building work requires the consent of the other flat owner(s). Internal alterations may be carried out without such consent provided they are not structural.
   8. Covenants that require that

      1. No pets may be kept which cause a nuisance to the other flat owner(s).

      2. Each flat owner will conduct themselves in such a way as not to cause nuisance or annoyance to the other flat owner(s).

   9. In the event of a dispute arising between flat owners, a mechanism for the dispute to be resolved (often arbitration).

It is important to ensure that all the buildings on the property have any required council permits or consents.

In most cases the practicalities are that the occupiers of cross-leases live happily in their homes with little regard for the legal technicalities that govern this type of property ownership. However if difficulties arise which, more often than not, are caused by simply living in close proximity to another person or family and are unrelated to the cross-lease, then any non-observance of the cross-lease provisions can be used to add fuel to the dispute.

It is important that all owners of cross-lease properties have a general understanding of their lease document, and observe the provisions in it. We regularly advise on all aspects of cross-lease properties for pre purchase advice to dispute resolution. Do feel free to call us to discuss this complex but common legal arrangement.