Edmonds Judd

Rural

Over the fence

Family home v homestead: implications for relationship property

When a relationship breaks down, it is always difficult dividing up your joint assets.  It is important when deciding the division of relationship property under the Property (Relationships) Act 1976 (PRA) following a separation, or when forming a contracting out agreement, to accurately classify the home in which you and your partner/spouse live. The overall structure of the property will define whether your home is classified as the ‘family home’ or a ‘homestead.’

Family home: The PRA defines the family home as a property, including all land, buildings and improvements, which a couple generally, or primarily, reside in as their family residence. The property within the whole title must be used for the benefit of the relationship to be classified as the family home. In this case, all land under that title must be shared equally in a separation situation unless you as a couple have a contracting out agreement specifying the division of the property.

Homestead: Where only part of the property within the whole title is used for the benefit of the relationship, the portion attributable to the relationship may be considered the ‘homestead’ instead of the ‘family home.’ In this case, the remainder of the property may not be subject to the PRA principles of equal sharing, particularly if it is owned by a third party such as parents of one of the parties.

A family home will be considered a homestead if a portion of the property within the title is used by a couple as their general, or primary, family residence but the remainder of the title is used for the overall economic gain of another entity. This is more common in the rural context where couples reside on the farm but only a portion of the overall title contains the family home and the remainder is used for the economic gain of their rural business.

In this case, only the portion of the title considered to be the homestead would be considered in the division of relationship property, with the remaining property possibly not subject to the equal sharing principles of the PRA.

 

Road user charges and when to pay them?

The government imposes taxes on fuel through a road user charge (RUC) to collect funds for the maintenance and development of our roads. For most people, this tax is included in the petrol price.

Some vehicle owners, however, must pay the RUC and their fuel separately. If you own a vehicle weighing more than 3.5 tonnes, or a vehicle weighing less than 3.5 tonnes that runs on untaxed diesel, you must pay the RUC.

Your RUC licence is paid in advance to allow you to travel the distance purchased – usually in blocks of 1,000 kilometres.

You must always display the appropriate RUC licence on the inside of the passenger’s side of the front windscreen of your vehicle. Once your vehicle has travelled the distance covered by the RUC licence, you must renew your licence.

Owners must keep records of their vehicle use and have a hub odometer installed to accurately measure the distance it travels. Most vehicles that are subject to RUCs are sold with a hub odometer pre-installed.

Electric cars (EVs) do not currently incur RUCs. The new government, however, has indicated that EVs will pay the RUC from 1 April 2024 onwards.

 

Casual employees v seasonal workers

Seasonal workers are employed in certain sectors (particularly agricultural and horticultural areas) with the exclusive purpose of doing seasonal work, usually to assist with an increase in seasonal production requirements. Although seasonal work is temporary by nature, employers must be aware of the minimum entitlements for seasonal workers. There is a distinction between ‘casual’ workers and ‘seasonal workers’ in general. The Employment Relations Act 2000 requires specific clauses in employment agreements for these workers.

Casual employment: a casual worker is employed to work on shifts that are offered and accepted. There is no requirement for them to accept work you offer. In between periods of work, this worker is not considered to be employed by you.

Seasonal work: generally speaking, a seasonal worker is employed to work the entire season. These people are permanent employees on a fixed-term basis who are likely to be employed under a fixed-term agreement[1]. It is important that your seasonal worker’s employment agreement is drafted according to the specifics of the job.

If you need help with employing this summer’s casual and seasonal workers, please don’t hesitate to contact us. It’s vital to get these employment agreements correct – both for you and your employees.

[1] Section 66, Employment Relations Act 2000.

 

 

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


To be repealed by new government

The 2023 election has resulted in a National Party-led coalition, that campaigned on a commitment to repeal the Labour government’s Three Waters legislation and the Resource Management Act 1991 (RMA) replacement legislation. It has confirmed that these statutes will be repealed within its first 100 days in office.

 

Three Waters to be Local Water Done Well

The previous government introduced Three Waters to reform water management by shifting it away from New Zealand’s 67 councils, and handing it to four large co-governed regional entities. It was entitled ‘Three Waters’ as the legislation related to three main types of water infrastructure: storm water, drinking water and wastewater. In April this year, after much criticism, Three Waters was renamed Affordable Water with 10 publicly owned water services entities to be established.

The new government intends to introduce its Local Water Done Well plan that will:

  • Repeal Three Waters and scrap the co-governed mega-entities
  • Restore council ownership and control
  • Set water quality and infrastructure investment rules, and
  • Ensure water services are financially sustainable.

Within one year of repealing Three Waters, councils will be required to deliver a plan detailing how they will transition their water services to the new model that meets water quality and infrastructure investments rules, while being financially sustainable in the long-term. Communities, via their local council, will retain ownership of their assets.

Under Local Water Done Well, a Water Services Regulator will be introduced; its role will be to set and enforce water quality standards across New Zealand. It will also be responsible for developing and enforcing rules around the management of stormwater and wastewater that will include setting standards for acceptable discharge and mitigating environmental risks to rivers and beaches.

Local councils will have to present a model for the delivery of water services that is financially sustainable and meets the strict rules for water quality and water infrastructure. If a council cannot achieve financial sustainability by, for example, gaining access to long-term borrowing, the government will provide limited one-off funding to bridge the gap. Support will be decided on a case-by-case basis; Crown funding can only be used for projects needed to transition to a sustainable footing, not for day-to-day delivery of water services.

 

Resource Management Act 1991

In February 2021, the Labour government announced that the RMA would be repealed and replaced with three new statutes: the Spatial Planning Act, the Natural and Built Environment Act and the Climate Adaption Act. The first two statutes were passed in August; the Climate Adaption Bill did not pass before October’s general election. Early in its election campaign, the National Party labelled the RMA-replacement legislation as complex and pledged to repeal them within its first 100 days of office.

The National Party had agreed that the RMA needed fixing but instead campaigned on its own changes.

The National Party’s coalition agreement with ACT and New Zealand First reflects all parties’ commitment to reduce red tape. In particular, the government wants to make it easier to obtain consents for infrastructure (including renewable energy), building houses, and aquaculture and other primary industries. The coalition agreement also presents a desire for ‘allowing farmers to farm’ which suggests the red tape cut from the RMA will lead to a reduction in bureaucracy and more time spent actually farming.

The new government has stated that it will begin to work on a longer-term programme to repeal the RMA, however the detail of this plan is yet to be announced. We will keep you informed during that process.

 

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


What can agriculture expect?

All three political parties that make up the governing coalition campaigned on the premise that agriculture is the backbone of New Zealand’s economy. Each party stated that the rural sector should be supported, rather than what they saw as being hindered by government, particularly in the areas of regulation, red tape and climate policy.

In this edition, we cover the proposed repeal of the Three Waters and resource management replacement legislation in the next article, but what else are we likely to see from this government?

 

The parties’ agreements

There are two separate agreements between the coalition partners – the National-ACT Coalition Agreement and the National-New Zealand First Coalition Agreement.  Both agreements should be read in conjunction with the other and, in the agriculture area, are quite similar in their aims. Both agreements contain commitments to:

 

  • Reduce red tape and regulatory blocks
  • Reverse the ban on live animal exports while still ensuring high standards of animal welfare
  • Reform the National Animal Welfare Advisory Committee
  • Improve farm environment plans so they are more cost-effective and pragmatic for farmers, and to be administered by regional councils and targeted at a catchment level
  • Replace the National Policy Statement for Freshwater Management to better reflect the interests of all water users, and
  • Liberalise genetic engineering laws.

 

Some differences in approach

There are some areas, however, where the coalition agreements aren’t exactly the same, but look to achieve similar outcomes. For example, in the National-ACT agreement, the parties agree to maintain a split-gas approach to methane and carbon-dioxide through to 2050, and to review the methane science and targets in 2024 for consistency, with no additional warming from agricultural methane emissions.

 

The National-ACT coalition agreement also contains a commitment to amend the Overseas Investment Act 2005 to limit ministerial decisions to national security concerns (to keep politics out of it as much as possible) and to make decision making more timely.  The National-New Zealand First agreement commits to incentivise the uptake of emissions reduction mitigations such as low methane genetics and low methane producing animal feed.

 

In addition, that document also contains an agreement to amend the National Environmental Standards for Commercial Forestry regulations to place a duty upon harvesters to contain and remove post-harvest slash.  Much of the regulation and red tape that has been criticised by the three coalition parties comes from a need to comply with international obligations. A change of government does not mean a change of those obligations and, for example, just in the last week or so the New Zealand government has signed up to the COP28 Declaration on Food Production and Sustainable Agricultural Adaptations. The Declaration seeks to protect the livelihoods of farmers while, at the same time, recognises that agriculture and food production has to ‘urgently adapt to respond to climate change.’

 

The UAE Climate Change and Environment Minister, Mariam Almheiri, said, “Countries must put food systems and agriculture at the heart of their climate ambitions, addressing both global emissions and protecting the lives and livelihoods of farmers living on the front line of climate change.”  Somewhat predictably, Greenpeace New Zealand responded by saying that this country needs to transition to a more organic farming system and that the New Zealand government should introduce policies that bring us into line with global commitments.

 

While the three coalition partners are indicating a new support for agriculture, and with the two associate Ministers of Agriculture both being farmers, a more practical approach to deal with climate and water issues is being signalled. New Zealand has international commitments that it must fulfil, as well as already recognised issues of water quality. These issues will not go away.

 

 

Looking ahead

It will be interesting to see, in practical terms, what is likely to happen in the agriculture sector over the course of this administration.  In terms of the immediate changes or focus on specific issues that are likely to arise, the government’s 49-point 100-day plan includes the repeal of the Water Services Entities Act 2022, the Spatial Planning Act 2023 and Natural and Built Environment Act 2023. The only other items that directly relate to agriculture are the government’s commitment to improve the quality of regulation, to cease implementation of new Significant Natural Areas and to seek advice on the operation of the existing areas.

 

Apart from those issues, there is a commitment to meet with councils and communities to establish reasonable requirements for the recovery from Cyclone Gabrielle and other major recent flooding events that have had a severe impact on some rural communities, particularly on the East Coast, Hawke’s Bay and the greater Auckland area.  As much as anything, we can expect to see a more collaborative approach to issues such as climate change and protecting the natural environment that, in the eyes of many in the agricultural sector, gives the sector (as one of the main drivers of our economy) the respect it deserves.

 

 

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


Postscript

Firearms Registry now up and running

The new Firearms Registry opened on 24 June 2023.

It is now mandatory for firearms licence holders to provide information about their firearms items. The development of the Firearms Registry follows major changes to New Zealand’s firearms laws made after the March 2019 terrorist attacks at two Christchurch mosques.

Firearms owners must register:

  • Non-prohibited firearms, including Specially
  • Dangerous Airguns (PCPs)
  • Prohibited firearms and magazines
  • Pistols
  • Restricted weapons
  • Major parts, and
  • Pistol carbine conversion kits.

You must also register firearms that do not work.

Antique firearms or airguns are not required to be registered. Registration is also not required for ammunition in your possession, nor do you need to record sales or purchase of ammunition to or from other firearms licence holders.

You can register online here: https://www.firearmssafetyauthority.govt.nz/firearms-registry or by phone at 0800 844 431 (04 499 2870) 8.30am-5pm, Monday to Friday.

 

Looking after your mental health

These days everyone is being advised to take care of their mental health, as well as making sure their physical (and emotional) needs are met. In busy working days, it’s easy (and tempting) to think things will sort themselves out if you are under pressure.

To help you manage your mental health and day-to-day activities, Spark Business Lab and The Institute of Organisational Psychology has designed an e-learning series to help you run your business more effectively and to help make your life easier.

The videos have practical advice, you can download useful tips and templates you can use every day. Go here to get started: www.business.govt.nz/wellbeing-support/brave-in-business-e-learning/

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


Land Covenants

Now commonplace in residential developments

With all the property development over the last 20 years or so, land covenants have become commonplace in new build residential developments.

If you are buying a property in a newly or recently built residential subdivision, the odds are that the title will come with various covenants registered against it. These covenants are likely to place restrictions on the ways in which the owners can use and enjoy their properties.

What are land covenants?

Land covenants are usually put in place to ensure that the aesthetics and maintenance of the subdivision are built and kept up to a certain standard. In other instances, a landowner may subdivide part of their property and wish to restrict what can be done on the subdivided land to protect their use and enjoyment of their remaining land, for example, by restricting the location and size of any buildings to protect their view.

Whilst life in a subdivision is not for everyone, urban development in New Zealand is now usually done through a subdivision with land covenants.

Land covenants broadly fall into two categories:

1. Positive covenants that impose an obligation on a property owner to do something, or
2. Restrictive covenants that prevent an owner from doing something.

Positive covenants usually include an obligation to make a financial contribution or assist with maintenance of something in common with neighbouring landowners, such as the repair and maintenance of a fence or driveway.

Restrictive covenants are the most common covenants in residential subdivisions. The restrictions could include:

  • The construction materials that can, or cannot, be used for building on the land (including a possible prohibition on the use of second-hand materials)
  • The height/design of your house, garage or even a fence
  • Restrictions on whether you can leave caravans, boats and trailers parked in the driveway
  • Ensuring clotheslines, heat pump infrastructure, solar panels or satellite dishes are not visible from the street
  • Limitation on the number of dwellings and/or outbuildings you can have on the property
  • Whether certain types of animals are not allowed on your property, and/or
  • A reverse sensitivity covenant, that prevents the owners of the land burdened by the covenant from complaining about noise, smell or substances produced by an activity (such as an airport, farm, etc) being conducted on the property having the benefit of the covenant.

What to look out for

This depends on your intended use of the property. If you are considering buying a section to build a home from scratch, you must ensure your builder and/or architect have a copy of the land covenants, and that the build complies with all restrictions.

If you are making any alterations to an existing property, or even installing a solar panel/heat pump, you should first read all land covenants and establish whether it is allowed and, if so, whether there are any restrictions.

When buying a property that is subject to land covenants, you should ensure that the current owner has adhered to the rules and restrictions of the covenant, obtained the necessary developer’s consents and not committed any breach to date by, for example, building a granny flat on the property where that is prohibited.

Once the subdivision is completed, developers will often wind up their development company. If the landowners have not obtained any necessary developer consent before the company is wound up, this can hinder or prevent a sale later. Prospective purchasers are likely to be advised by their lawyers to seek a copy of any developer’s consent and this can prove to be difficult where the development company no longer exists.

How long does a covenant last?

Many land covenants ‘run with the land’ which means they bind every new owner and run indefinitely.

A well-designed land covenant could have various provisions that expire – such as any requirement for obtaining consent from the developer to avoid the issue of a developer company being wound up. If this is the case, the expiry date will be stipulated in the land covenant.

Breaching a covenant?

The rules contained within the land covenant can be enforced by you and your neighbours (if they hold the benefit of the land covenant) against anyone who has breached the restrictions.

To enforce a breach, written notice should be given to the owner that specifies what the owner must do or pay to fix the breach. If the owner receiving this notice does not agree that there has been a breach, they should give notice in return stating this.

If there has been a breach, most land covenants provide for damages, often in the range of $100–$250 per day and per property owner who has been affected by the breach. These damages will normally accrue until the breach is remedied. Sometimes the covenant provides for payment of a lump sum when there is a breach.

Often it is an immediate neighbour who raises any potential breach of the land covenants as they are the most likely to be impacted.

We encourage compliance with land covenants to avoid any liability to pay damages or a breakdown in relationships between neighbours.

Can a land covenant be removed or varied?

Land covenants can be removed from the title or varied. The easiest and most common mechanism for a removal or variation is when all parties affected by the land covenants agree to the removal or variation, and sign the necessary documentation. Getting all affected parties to agree to a removal or variation can be a lengthy, expensive and difficult process. In some subdivisions, the sheer number of affected parties will make this option an unattractive proposition and the possibility of complete agreement unlikely.

If you cannot get all parties to agree, there are possible remedies available by an application to the courts. The courts are, however, often reluctant to vary or remove land covenants, even those which may seem no longer to be relevant.

Conclusion

With modern urban housing density in subdivisions, the prevalence of land covenants is likely to continue to increase. Land covenants usually impact land indefinitely. This makes it more important than ever to understand the land covenants registered against a property before you buy it.

If you are unsure whether any covenants apply, or their effect, please be in touch with us. You should not presume that the other owners, including previous owners, have complied with their obligations to date.

 

 

DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


Over the fence

Obligations of working dog owners

There are a range of legal obligations and responsibilities associated with owning working dogs. ‘Working dogs’ are specifically defined under the Dog Control Act 1996 and include dogs used solely or principally for the purpose of herding or driving stock.

Registration and microchipping: Working dogs do not have to be microchipped unless they are kept on the farm as a family pet or used for recreational hunting. While working dogs may not need microchipping, they must be registered and wear a collar with a council-provided disc or label.

When registering a working dog, you must specify that they are a working dog. If you don’t register or micro-chip (where required) working dogs, you can be fined up to $3,000.

Dangerous dogs: If your working dog attacks a person, another animal or protected wildlife, you may be fined up to $3,000 and your dog may be destroyed. If your dog causes serious injury (or death) to a person, animal or to protected wildlife you may be imprisoned for up to three years and/or fined up to $20,000.

If your dog attacks a person or animal and no destruction order is made, your local council can still classify your dog as dangerous, meaning it must be kept within a fenced area, neutered, muzzled and kept on a leash in public places. You will also be liable for higher registration fees and cannot dispose of the dog to another person without the written consent of your local council.

Protection of working dogs: You must ensure your dogs receive proper care and attention, including sufficient food, water and adequate exercise. Failing to care for your dogs is considered an offence and you could be imprisoned for up to three months or fined up to $5,000.

Local councils also have the power to impose certain obligations regarding dog controls. Therefore, it is crucial to check your local council’s policies regarding working dogs to ensure you are compliant.

MPI: Animal welfare checks

The Ministry for Primary Industries (MPI) regulates animal welfare and ensures the safe treatment of animals in New Zealand. Since 1 July 2023, MPI is responsible for delivering inspectorate services for all animal species in New Zealand.

The Animal Welfare Act 1999 provides the legislative framework for the care, treatment and obligations relating to animals, including when using animals for the purposes of research, testing and teaching. MPI inspectors have wide-reaching authority under the Act. This allows them to enforce the rules under the legislation and to ensure that animals are being treated and cared for properly.

In particular, section 127 of the Act authorises an inspector to enter onto private land, premises, vehicles, aircraft or ships (without a warrant) to carry out a routine inspection on an animal. The power of entry does not require an inspector to hold a belief that any offence has been committed. However, inspectors may only enter onto private land at a reasonable time and evidence must be provided to the animal’s owner of the inspector’s identity. No force must be used; entry into private dwellings or a marae can only be undertaken with a search warrant.

If nobody is present at the time of entry, the inspector must leave in a prominent place a written statement of the time and date of entry, the purpose of entry, the condition of the animals inspected, the animals removed (if any), and the address of the police station or other office to which enquiries can be made.

If an inspector has reasonable grounds to believe an animal has been mistreated, they can move that animal to a place chosen by them. Inspectors may also remove an animal if they believe it requires veterinary care or the owner is disqualified from owning animals. The animal will be kept at the chosen location until a judge orders the animal be returned to the owner, or the owner is charged and the animal is forfeited to the Crown.

Firearms Registry opened 24 June 2023

After the Christchurch terrorist attacks, the government introduced laws strengthening the management of firearm use, including establishing a Firearms Register. The Register opened on 24 June 2023.

All New Zealand firearms licence holders must now register all non-prohibited firearms, restricted weapons, pistols, major parts, prohibited firearms/magazines and pistol carbine conversion kits. Do note that firearms that do not work must still be registered.

Licence holders have until 24 June 2028 to register the items listed on the previous page. However, there are a number of activating circumstances that will require someone to register the items sooner. Examples of the activating circumstances are where a firearm is being purchased or sold, where a firearm has been lost or stolen, or where a person is applying for a new (or renewing an existing) firearms licence/endorsement.

Individual firearms licence holders do not need to register antique firearms or airguns (excluding specifically dangerous airguns). Individuals are also not required to register  ammunition in their possession, nor to record sales or purchases of ammunition to or from other firearms licence holders.

To find out more about the Firearms Registry, click here.

 

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


Emissions Trading Scheme

Two discussion papers invite submissions

 

The Emissions Trading Scheme (ETS) is the primary regime used by the government to achieve its long-term commitment to reduce New Zealand’s greenhouse gas emissions so that our international obligations are met.

Through the ETS, a price is set on emissions by charging certain sectors for the greenhouse gases they emit. Emitters must acquire and surrender New Zealand Units (NZUs) to account for their direct emissions or emissions associated with their products. Emission units (often called ‘carbon credits’) are traded between participants in the scheme. One emission unit can either represent one metric tonne of carbon dioxide, or the equivalent of any other greenhouse gas.

The government has acknowledged that the current framework is not perfect and the ETS must adapt.  In June, the government released two discussion papers as part of its consultation process on proposed changes.

Document 1: Encouraging greater gross emissions reductions

The first document provides four options to encourage greater gross emissions reduction in the ETS while, at the same time, continuing to support forestry removals. It highlights the role that forests have in New Zealand’s response to climate change as well as the associated challenges with widespread exotic forest.

The four options proposed are:

  1. Using existing ETS levers to strengthen incentives for net emissions reductions. The government could reduce the supply of NZUs and therefore reduce net emissions through existing levers such as auction volumes, price controls or industrial allocation. In short, if fewer NZUs are available then fewer emissions would be offset resulting in reduced emissions being produced.
  2. Creating increased demand for removal activities to increase net emissions reductions. Additional entities (such as the government or offshore buyers) could purchase NZUs. This would help to attain the Nationally Determined Contribution (NDC); offshore buyers might purchase them to meet voluntary emissions targets or support voluntary market claims. As the discussion paper notes, there is no evidence of significant demand from offshore buyers and the effectiveness of this options is expected to be limited.
  3. Strengthening incentives for gross emissions reductions by changing incentives for removals. This option would create two prices: one for emissions reduction activities and another for removal activities. A lower price would apply to removal activities, making them less financially attractive. The prices for reduction and removals would still be linked, because an increase to the price for units sold at auction would likely increase the price paid for removal activities.
  4. Creating separate incentives for gross emissions reductions and emissions removals. The fourth option would create two markets with two separate prices: one for gross emissions reduction activities and another for removal activities. Emitters would only be permitted to use units sold at auction, or allocated for emissions-intensive and trade-exposed activities, to meet their surrender obligations, while removal activities would be incentivised through a separate market.

 

Document 2: Redesign of permanent forest category

The second discussion paper outlines the government’s proposal to take a cautious approach to the redesign of the permanent forest category in the ETS.

It acknowledges both the potential environmental and economic risks associated with large-scale transition of land to permanent forestry. The paper notes that the current ETS settings incentivise increasing levels of permanent exotic afforestation, in particular Pinus radiata, as it provides a much higher return on investment relative to other competing land uses including indigenous forests and some pastoral systems.

Three design choices are presented in the paper and, within these design choices, options are presented.

  1. Which forests should be allowed in the permanent forest category?
  2. Only transition forests and indigenous forests can enter the permanent forest category, or
  3. Exotic forests allowed to enter under limited circumstances. This could, for example, include long-lived species, Māori-owned land or small-scale exotic forests planted on farms.
  4. How should transition forests be managed to ensure they transition from exotic to indigenous forest and reduce the financial risks to participants?
  5. Retain the status quo – no new specific carbon accounting method for transition forests or
  6. New mandatory specific carbon accounting methods for transition forests in the permanent forest category.
  7. How should permanent forests be managed?
  8. Retain the status quo – no additional forest management requirements introduced for forests in the permanent forest category
  9. New minimum forest management requirements, specific to the permanent forest category, are introduced for all registered permanent forests (exotic, indigenous and transition forests), or
  10. New forest management requirements are needed for transition forests.

The consultation for both discussion papers ends on Friday, 11 August 2023. A summary will be published once submissions close. Individual submissions on the discussion papers may also be made publicly available online. It is noted that late submissions may be accepted however they may not be considered in time to inform the next steps for the ETS review.

If you would like to make a submission on the ETS before Friday, 11 August, click here.

The ETS is complex and the two discussion papers contain considerable jargon that can be difficult to interpret. If you are interested in how these proposed changes may impact you, please don’t hesitate to discuss this with us. We are here to help.

 

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


Freshwater farm plans

Roll out by regions starting 1 August

Freshwater farm plans are part of the Essential Freshwater package introduced in 2020. Its purpose is to:

  • Stop further degradation of New Zealand’s freshwater resources and improve water quality
  • Reverse past damage, and
  • Bring New Zealand’s freshwater resources, waterways and ecosystems to a healthy state within a generation.

To that end[1], freshwater farm plans are now beginning to be required by all farms that have:

  • 20 hectares or more in arable or pastoral use
  • Five hectares or more in horticultural use, or
  • 20 hectares or more in combined use.

Southland and Waikato roll out first

The order sets out[2] which of New Zealand’s regions must have their plans underway.

The first regions to prepare their plans from 1 August 2023 are Southland and Waikato. The remaining regions must start the process at various times up to 1 July 2025. Due to the effects of Cyclones Hale and Gabrielle earlier this year, the timing of the implementation of these plans in Hawke’s Bay and Tairawhiti is yet to be decided.

Within 18 months of the order coming into effect for a particular region, plans must be ‘certified’ by a certifier who will be appointed by the local regional council. Plans must be audited within 12 months of the date of certification, with the timing of further audits dependent on the results of the initial audit.  Auditors will be appointed by the local regional council. Plans must be recertified every five years.

The process

The freshwater farm process requires farm operators to identify on-farm risks to freshwater and to determine actions to manage those risks based on the:

  • Farm’s landscape features and natural environment
  • Farming activities, and
  • Environmental health, and cultural and community values of the local catchment.

The intent of the legislation is to ensure that the on-farm actions are practical and effective in relation to a specific farm, rather than having a one-size-fits-all approach to the issue.

It is the responsibility of the ‘farm operator’ who is the person with ‘ultimate responsibility for the operation of the farm’ to prepare the freshwater plan.

Under Section 217E of the Act, the main duties of the farm operator are to:

  • Prepare a freshwater farm plan in accordance with Part 9A of the Resource Management Act 1991 (RMA) and Regulations
  • Submit the plan to a certifier for certification
  • Ensure that the farm operates in compliance with the certified freshwater farm plan, and
  • Arrange for the farm to be audited in accordance with Part 9A of the RMA and any regulations for compliance with the certified freshwater farm plan.

Keep the plan current

The farm operator must also keep the certified freshwater farm plan fit for purpose by amending  the plan as necessary to reflect the Act and Regulations.

Section 217F sets out what the freshwater farm plan must contain. Basically, it must:

  • Identify any adverse effects of activities carried out on the farm on freshwater and freshwater ecosystems
  • Specify requirements that are:
  • Appropriate for the purpose of avoiding, remedying, or mitigating the adverse effects of those activities on freshwater and freshwater ecosystems, and
  • Be clear and measurable
  • Demonstrate how any outcomes prescribed in any Regulations are to be achieved
  • Comply with any other requirements in the Regulations, and
  • Comply with section 217L.[3]

There are a variety of templates and guidance tools made available by MPI here and other resources are available to farmers to help them complete their freshwater farm plans.

If you need some help in navigating the freshwater farm plan regime, please don’t hesitate to be in touch. We are here to help.

[1] Under part 9A of the Resource Management Act 1991 and the Resource Management (Application of Part 9A –Freshwater Farm Plans) Registrations 2023.

[2] Resource Management (Application of Part 9A – Freshwater Farm Plans) Order 2023.

[3] Section 217L states that a freshwater farm plan may contain a requirement that relates to an activity on the farm that is subject to a ‘specified instrument’ (a resource consent, conservation order or similar requirement). This section is intended to ensure that compliance with the freshwater plan does not supersede any obligation to comply with any such specified instruments.

 

 

DISCLAIMER: All the information published in Rural eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Rural eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


Subdivision consents

Recent changes to planning rules

In the Autumn 2022 edition of Property Speaking we discussed different types of resource consents. Since then, the government has released a new National Policy Statement for Highly Productive Land (NPS-HPL), which you can read here. The purpose of the NPS-HPL is to ensure that highly productive land is protected for use in land-based primary production, both now and for future generations. Councils are now required to consider the need to preserve highly productive land when determining any application for a subdivision consent.

Subdivision consent

If you want to change the size of your section by purchasing some of your neighbour’s property and merging it with your own (a boundary adjustment) or you want to split your property into additional property titles, then you will need subdivision consent from your local council.

Requirements

Your region’s district plan sets out the requirements that you must meet in order to subdivide your property. In addition to the requirements being different between regions, the requirements are also different depending on the zone in which your property is located. Properties are divided into zones that consider the standard characteristics expected in that area. The zones are:

  • Residential
  • Commercial/retail/town
  • Industrial
  • Rural lifestyle
  • Rural production, and
  • Special purpose.

The names of the zones may differ between regions but there will be a zone for each of those standard characteristics.

Conditions

Consent for your subdivision is likely to come with conditions.  Your local council may also ask that part of your property is transferred to the council; this is known as ‘vesting.’ Sometimes the council will pay you for that land but other times it will form part of your development contribution.

Areas around waterways may be taken for an esplanade reserve or esplanade strip, whereas areas of land that will become roads may be taken for road reserves.

The council can also require that new subdivisions have certain design specifications which are dictated through the district plan; these are recorded on the property title in a consent notice.

Affected parties

Where your subdivision is not a permitted activity, or it does not fit within the standard requirements for a subdivision in that area, the council may still grant you consent on a ‘notified basis.’ This means that it provides notice to affected people who can then raise any concerns with your proposed subdivision within a specified time.

The council may add further conditions to the development or even refuse the consent depending on any concerns raised.

Highly productive land (HPL)

In addition to the prior considerations that councils had to consider, since 17 October 2022, they now must map the land within their region to determine if it is HPL. In general, land will be mapped as HPL if it is:

  1. In a general rural zone or a rural production zone
  2. Predominantly within an area with a Land Use Capability class of between 1–3. A helpful map shows the current class of land within New Zealand here
  3. Not identified for future development within the relevant district’s district plan as at 17 October 2022, and
  4. Forms a large and geographically cohesive area.

Councils have the next three years to remap all the land within their region. Until that mapping is completed, all land will be treated as HPL if it falls within categories 1–3 above.

Most of the Land Use Capability class 1–3 land is within Northland, Auckland, Waikato, Bay of Plenty (between Tauranga and Whakatāne), Taranaki, Manawatu, Canterbury, Otago and Southland, although there are smaller areas of class 1–3 land throughout New Zealand.

If you are applying for a subdivision consent, your local council will consider whether the land is HPL and, where it is, it will be much more difficult for you to obtain a subdivision consent.

Since the NPS-HPL came into force on17 October 2022, it has caused problems for landowners who had subdivision consent applications for land within class 1–3 areas pending on that date. Councils had to reassess applications taking HPL into account. This, in some cases, resulted in consent being refused.

If you are thinking about subdividing your property, especially in a rural zone, do talk with us and your surveyor early on. We can discuss the specific planning requirements that now apply to your property and help assess whether your subdivision is likely to receive consent before you proceed any further on the development.

 

 

DISCLAIMER: All the information published in Property eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Property eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650


For landlords, tenants and buyers

With historic amounts of rain and flooding in many regions, this year has so far been challenging for many communities in the North Island. It is anticipated that these extreme weather events are likely to become more frequent in the future.

Many properties have been damaged by flooding, landslides and silt. Some of these may be under sales agreements or leased under residential tenancy agreements. We give some advice on what landlords, tenants and buyers (who have not yet settled) can do.

Residential tenancies

The responsibility for repairing damage to a property caused by a weather event or natural disaster, including drying a property that has been damaged by flood water (and paying for the electricity to do so), lies with the landlord.

If the landlord and tenant cannot come to an agreement on the next steps, either party may apply to the Tenancy Tribunal for a way forward.

Is the property completely destroyed? If the property is no longer habitable, rent will reduce accordingly and either party may give notice to the other terminating the tenancy. A landlord must give seven days’ notice and a tenant must give two days’ notice. We recommend taking photos of the damage in case there is a dispute about whether the property is destroyed. Notices from emergency services or council officials (such as red stickers) can also be used as evidence that the property is no longer habitable.

Partially destroyed? If the property is partially destroyed, or part of the property is so seriously damaged that it is no longer habitable, rent will reduce accordingly and either party may apply to the Tenancy Tribunal for an order to end the tenancy. The tribunal may make an order terminating the tenancy if it is satisfied it will be unreasonable to require the landlord to repair the property or the tenant to continue with the tenancy at a reduced rent.

Damaged but can be repaired? The damage should be repaired at the landlord’s cost as soon as practicable. The landlord should ask a building professional whether it is safe for tenants to remain in the property in the meantime. If the tenant can remain in the property while the work is completed, the landlord and/or tenant should consider agreeing to a rent reduction to compensate the tenant for any inconvenience while the work is being carried out.

If the tenant needs to move out, the landlord and tenant should negotiate to reach an agreement. The landlord should let the tenant know how long the repairs are expected to take and when the tenant can move back in.

Bought a property but not settled?

Under the ADLS Agreement for Sale and Purchase of Real Estate, the property and chattels remain at the risk of the seller until possession is given and taken (usually on settlement day). If you have bought a property but not yet settled, the cost of repairing the damage usually lies with the seller.

Property is destroyed? If the property is destroyed or damaged so it is no longer habitable, and is not repaired prior to the settlement date, the buyer must decide to either:

  1. Complete the purchase at the purchase price, less an amount equal to the insurance payment received or receivable by the seller (unless the insurance company agrees to reinstate the property up to the insurance cover for the benefit of the buyer prior to the settlement date), or
  2. Cancel the agreement: the deposit is refunded in full and neither party can make any further claims against the other.

Damaged but can be repaired? If the property is damaged, but is still habitable, settlement takes place on settlement date at the purchase price less an amount equal to the reduction in value of the property.

The reduction in value is deemed to be equivalent to the reasonable cost of reinstatement or repair. If the seller and buyer cannot agree on a reasonable cost of repair, the dispute will follow the compensation dispute procedures under the agreement.

We can help

Insurance companies will be very busy over the coming months assessing properties and processing claims. Given the scale and timing of the extreme weather events this year, this will take some time. There are also likely to be delays in the timeframes for repairs. Both landlords and tenants, and sellers and buyers, will need to be patient, flexible and practical to resolve any issues that may arise. Any agreement made between parties should be recorded in writing.

If you need any help to work through these issues, please don’t hesitate to talk with us.

 

DISCLAIMER: All the information published in Property eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are those of individual authors, and do not necessarily reflect the view of Edmonds Judd. Articles appearing in Property eSpeaking may be reproduced with prior approval from the editor and credit given to the source.
Copyright, NZ LAW Limited, 2022.     Editor: Adrienne Olsen.       E-mail: [email protected].       Ph: 029 286 3650