Edmonds Judd

House

Fallen in love with a beach house over the holidays? Going to AirBnB it? Rent it out for a fixed term? Slow down …

House
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If you’re buying a beach house and planning to rent it out or Airbnb it when you’re not using it, there are some things you might want to consider:

 

  1. If you are going to rent the property out – make sure that it complies with the healthy homes standards. If not, consider how much it might cost you to make it compliant.
  2. If you are going to rent it out with Airbnb, you don’t have to comply with the health homes standards.
  3. Either way, you might want to consider how difficult it might be to manage the property if you live a couple of hours drive away from the property. Think damage, parties, meth use or production, and cleaning up at the end of each stay.
  4. Consider additional costs for operating an Airbnb. Some councils increase rates for temporary accommodation arrangements like Airbnb.
  5. You will need to make sure that you obtain insurance that covers you if your Airbnb or rental tenant damage the property.
  6. Again, get yourself some tax advice.
  7. Finally, if you are renting, make sure you know your obligations as a landlord and how you can go about legally ending the tenancy.

 

We’re open again from 6th January to help you with your property purchases and conveyancing needs. We can also help you with ownership structures, negotiating property sharing agreements, succession planning, and any disputes that might arise.

 

Joanne Dickson

Fallen in love with a beach house over the holidays? Going to purchase it with friends or family? Slow down …

House, Latest news, Media
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If you’re buying a beach house with friends or family, things can go brilliantly well. But sometimes things can go very badly! Protect yourself and those close relationships by taking these points into consideration:

 

  1. Think carefully about the ownership structure. Are you all going to own the property in your personal names? Is anyone in business and needing to protect their assets – their share of the property could be vulnerable to a claim from creditors, so you might want to consider using a trust? What if the worst happens and one of your co-owners dies – how will you feel about their children inheriting their share of the house? Is it going to be held in a partnership?
  2. Enter a property sharing agreement. If things don’t go according to plan, it is useful to have a contract that clearly sets out what is to happen if you don’t want to co-own that house anymore. This might be because you are no longer getting along, or you need to get your money back out of the house, or you’ve broken up with your significant other and need to sort out relationship property issues, or any number of other reasons. The property sharing agreement should also include when/how the co-owners can use the property, whether their friends or family can use the property, and how the expenses relating to the property are to be shared and paid.
  3. Get tax advice. Get along to your accountant, there could be some unexpected tax complications.

 

 

We’re open again from 6th January to help you with your property purchases and conveyancing needs. We can also help you with ownership structures, negotiating property sharing agreements, succession planning, and any disputes that might arise.

 

Wishing you all the best for the Summer holidays.

Joanne Dickson

Fallen for a beach house this holiday season? Ready to “buy now”? Take a moment to pause…

House, Kids, Latest news
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If you think you might succumb to temptation and buy a holiday house at your favourite beach this holiday season, here’s some points to consider when entering a sale and purchase agreement.

 

Your best option is to talk to a lawyer before you enter a contract to buy that beach bach. But, they might be on holiday too. So, if you can’t get to your lawyer, make sure your sale and purchase agreement has some conditions in there to offer you a level of protection. There are the usual LIM, building inspection, and finance conditions. But, you might want to also consider having these conditions too:

 

  1. Due diligence condition: this condition allows you to do some investigations before the contract becomes unconditional. If the property doesn’t stack up, you can cancel the contract, usually without providing a reason. This clause can potentially save you thousands of dollars!
  2. Subject to solicitor’s approval condition: this condition can be sued to cancel the contract on the grounds of conveyancing aspects of the purchase. So, not as broad a protection as the due diligence clause, but still a “good to have”.
  3. Insurance condition: given the changing nature of insurance in New Zealand and the impact that natural disasters can have, it is worth adding a condition that provides you are able to obtain insurance for the property.

 

Don’t get caught up in the hype. There’s always “someone else” interested in the same property. Take your time and make sure it is the right purchase for you.

 

Finally, make sure you get some accounting advice, there could be some unexpected tax complications.

 

We’re open again from 6th January to help you with your property purchases and conveyancing needs. We can also help you with ownership structures, negotiating property sharing agreements, succession planning, and any disputes that might arise

 

Wishing you all the best for the Summer holidays.

Joanne Dickson

Wait! Before you sign that pre-nup! Step 3 – Advice

House, Kids, Property, Relationships, Uncategorized
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In this article we look more closely at Step 3 – Advice.

 

Once your lawyer has the details of all property owned by each of you they can assess what your rights would be if that property were divided under the RPA, and provide you with advice on how the agreement affects your property rights and the implications for you if property were divided under the agreement.

 

Why do I need advice on rights under the RPA if it’s just 50/50 and I’m contracting out?

This is where the law jumps in and says “woah there, partner! There’s a lot more to it (131 pages to be precise), so you should definitely get legal advice to check it’s what you want first”.

 

It is important that you fully understand your current property rights under the RPA before agreeing to change or give up those rights.  The starting point for under the RPA is that relationship property will generally be divided equally between partners in a qualifying relationship.  However, this is just a presumption, not a rule set in stone. There are numerous exceptions and adjustments within the RPA that can alter how property is divided based on the specific circumstances of your relationship.  Even the most experienced relationship property lawyers can find the RPA complex. That’s why seeking legal advice is essential before making any decision to contract out of the RPA.

 

Great, now you’ve had advice and know what your actual property rights are under the RPA, let’s compare that to your position under the contracting out agreement.

Even if you’re planning on entering into a contracting out agreement with the intention of maintaining a 50/50 split, it’s important to realise that the implications could be far-reaching.  Property rights, financial arrangements, estate planning, and even third-party property rights (such as those held in trusts or companies) can all be affected.  The agreement might impact more than you expected.  (*Hot tip* now is a good time to consider whether you should create or update your will as it works hand-in-hand with your contracting out agreement)

Your lawyer will be able to assess your specific situation and help you understand how the contracting out agreement compares to your rights under the RPA. They can guide you through the various consequences and ensure you’re fully informed before agreeing to anything.

 

But wait!!! It’s not enough just to receive legal advice—you need to understand it. Ensure your lawyer explains the details and feel free to ask lots of questions, we love to know you are thinking about how this all applies to you.

 

If you’re satisfied with the advice and understand the implications, it’s time to book an appointment with your lawyer to sign that contracting out agreement. This step is crucial to ensure your rights are protected and your intentions are clearly outlined.

Kerry Bowler, SolicitorKerry Bowler, solicitor

Wait! Before you sign that pre-nup! Step 2 – Disclosure

Relationships
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In the first article of this series, we introduced the 3 key steps you must take before signing the contracting out agreement for it to be valid:

  1. Independent lawyers
  2. Disclosure
  3. Advice

 

In this article we look more closely at Step 2 – Disclosure.

 

It is essential for both parties to fully disclose all assets and liabilities. This includes properties, bank accounts, investments, Kiwi saver, and any debts. Failure to provide a complete financial picture can affect your lawyer’s advice to you and lead to potential disputes in the future.  There is a risk the Court may even overturn the agreement if significant property is not disclosed.

 

Your lawyer needs to know what property you each own to assess how it is treated under the Act and advise you on how the agreement will affect your rights and the implications if property is divided under the agreement.  *Hot Tip* Make a list of your assets and liabilities with their values and share it with your lawyer early on to speed things up and reduce costs. This also ensures no property is left out, as any property not covered by the agreement will be divided under the Act.

 

Disclosing assets and liabilities not only fosters trust between partners but also ensures that both parties can make informed decisions. It helps in crafting a fair agreement that accurately reflects the financial realities of the relationship. Moreover, in the event of a relationship breakdown, a transparent agreement can prevent lengthy and costly legal battles.

Kerry Bowler, SolicitorKerry Bowler, solicitor

Wait! Before you sign that pre-nup! Step 1 – Independent Lawyers

Relationships, Retirement, Trusts
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In the first article of this series, we introduced the 3 key steps you must take before signing the contracting out agreement for it to be valid:

  1. Independent lawyers
  2. Disclosure
  3. Advice

 

In this article we will look more closely at Step 1 – Independent lawyers.

 

Does that mean we just get two different lawyers?

Not only does this mean you each need separate lawyers for the contracting out agreement, but those lawyers should also be at separate firms.  And it goes even further, the lawyer advising you should not have previously acted for your partner either.  This ensures that the lawyer who is advising you does not owe any ongoing duties to your partner as a client that would conflict with the lawyer’s duties to you as a client.  In some circumstances the lawyer may still be able to act for you, if you and your partner give fully informed consent.

 

So how does it benefit you?

The RPA states that the agreement is void unless you receive advice from an independent lawyer.

 

Your legal interests in protecting certain assets against a relationship property claim will often differ from your partner’s legal interests on separation.  Having an independent lawyer protects you and ensures the advice you receive is about how the agreement will affect your rights and what the implications are for you, independently of your partner’s interests in contracting out.  It can help ensure the agreement is future proofed, reducing your legal costs for updating the agreement as your relationship develops, and significantly reduces the risks of having the agreement overturned by a Court for being seriously unjust.

 

Next time Step 2 – Disclosure (and a hot tip on how to reduce your legal costs!)

 

Kerry Bowler, SolicitorKerry Bowler, solicitor