What Are Your Rights When Your Tenants Don’t Pay Up?

August 15, 2017 by

Renting out residential property is a great way to make some extra money, pay your mortgage off faster and build an investment nest egg. It can cause real frustration, however, when your tenant fails to pay rent on time.

To avoid costly delays, you should know the steps to take that will allow early intervention to either get the rent payments back on track or to bring the tenancy to an end.

Early intervention is key when it comes to dealing with rent payment problems. Your tenancy agreement should clearly state how rent is to be paid and when. You should also keep and monitor rent records so you will know straight away if your tenant falls behind in payments. If your tenant does miss a payment the first step is to contact them to find out the reason for that missed payment and to make a payment plan. If your tenant doesn’t pay the overdue rent, below is a guide to help fix the problem.

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Making the Most of Your Agreement to Lease

August 11, 2017 by

An agreement to lease is an agreement between a landlord and tenant of commercial property. It gives the parties an opportunity to record their leasing arrangements before they are formalised in a deed of lease.

There are many details to be worked through between parties to a lease. The agreement to lease should set out most of the details between the parties so when it comes to signing the deed of lease there is no confusion or discrepancy.

What should be included?

The agreement to lease needs to clearly identify the parties to the agreement and the premises to be leased.

In addition, it should record the annual rent, any reviews of the annual rent, the term of the lease, any renewals of the lease as well as a commencement date and the details of any guarantors required.

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Business Briefs

August 1, 2017 by

It will all come out in the wash: non-compliance with minimum employment standards

The Employment Relations Authority (ERA) has imposed a significant penalty of $145,000 on Manukau Auto Valet Limited for its failure to pay minimum wages and/or holiday pay to at least 115 of its employees.[1] The penalty was imposed in addition to Manukau Auto Valet’s reimbursement of $96,451 to its employees, which was owed as a result of its non-compliance.

In total there were 322 separate breaches of employment law, each being capable of being penalised with a fine of up to $20,000 that created a total potential liability of $6,440,000. However, as is usual in situations like this, the ERA applied a globalised approach in respect of the breaches and considered other relevant matters such as Manukau Auto Valet’s co-operation. The penalty was reduced to $145,000, which is still a significant sum.

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Shareholders’ Agreements

July 28, 2017 by

Relationship property for companies

Shareholders’ agreements are comparable to relationship property agreements (colloquially known as ‘pre-nuptial agreements’), as the objective of each is to establish rules for relationship property – whether it’s in your business or your personal life.

Not all relationships were built to last forever, and even the most stable relationship amongst shareholders may waver. Issues may also arise unexpectedly, such as the death of a shareholder or the need for a shareholder to sell their shares. Planning in advance for these events can pre-empt a dispute, and save some costs for the respective parties.

Unlike a company constitution, a share-holders’ agreement is not registered with the Companies Office and therefore it has a greater degree of confidentiality. Company constitutions generally contain the nuts and bolts provisions to operate the company that are not provided for in the Companies Act 1993.

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Property Briefs

July 19, 2017 by

Grants available to insulate rental properties

Recent changes to the Residential Tenancies Act 1986 require all rental properties to have ceiling and underfloor insulation meeting a set standard, where reasonably practicable, by 1 July 2019.

A limited number of grants (for 50% of the cost) are available through Warm Up New Zealand: Healthy Homes, on a first-come-first-served basis for rental properties occupied by low-income tenants and are not owned by a government agency. The criteria are:

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Airbnb

July 11, 2017 by

Key tax considerations

Becoming an Airbnb host sounds like the perfect way to fund some overseas travel for yourself and rent out your home while you are away.

The popularity of online booking platforms such as Airbnb, BookaBach and Holiday Homes has grown significantly over the past few years. They are seen as easy for property owners to market and rent their property to the end user, and it turns idle holiday homes or spare bedrooms into income earning assets. BookaBach currently has more than 12,200 holiday rentals and Airbnb has 15,000+ hosts. Airbnb hosts’ average annual income in 2016 was $3,800.

AirBNB

If you want to become an Airbnb host, you’ll need to consider your income tax situation, GST and your ownership structure…

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Sharing a Driveway

June 26, 2017 by

Know your rights and obligations

Many episodes of Neighbours at War told of disputes regarding shared driveways. Whether you currently own a property or you’re in the market to buy a property with a shared driveway, it pays to know your rights and obligations to ensure you and your neighbour won’t be featuring on the next episode.

Right of way easement

The most common shared driveway is formed by an easement, granting ‘A’ the right of way over ‘B’ (or part of ‘B’). The rights and obligations of each party will be found in the easement certificate or instrument registered on the titles to the respective properties. It’s likely those easement instruments will refer to the Land Transfer Regulations 2002 and Schedule 5 of the Property Law Act 2007, which set out the implied rights and covenants that apply in right of way easements.

Both the Regulations and the Act allow the grantee and the grantor (and their agents, invitees, tenants and so on) the right to pass and re-pass over the easement area on foot, or with vehicles, machinery, plant and stock. The parties must repair any damage that they cause and they must keep it clear of obstructions such as parked vehicles or wheelie bins. If your neighbour parks on the right of way but you can still get past, then they may not be in breach of the implied rights.

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DIY at the Disputes Tribunal

June 22, 2017 by

If you have a claim of up to $15,000 – the Disputes Tribunal provides a simple, cost-effective way of dealing with civil disputes. We outline below the basics of what you need to know to make a claim.

The Disputes Tribunal is not a court and there are no judges. Hearings are run by referees who will help the parties to reach an agreement. You can’t have a lawyer with you at the actual hearing – you have to represent yourself. You can, however, talk with us before lodging a claim or attending your hearing.

Disputes Tribunal

We do urge you, however, to try and settle your dispute rather than have to go to the Disputes Tribunal.

Claim threshold

Generally, the Disputes Tribunal is for claims of up to $15,000. However, if everyone agrees then the amount can be $20,000. If you have a dispute for between $15,000 and $200,000, you will need to go to the District Court. The High Court hears larger disputes.

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Buying off the Plans

June 12, 2017 by

The advantages, pitfalls and the Kawarau Falls case

If you live in one of New Zealand’s cities, it’s likely that you’ve noticed a multitude of brand-new apartments, terraces, and town houses popping up in your area. You may have decided that you too, want to secure one of these brand-new properties as an investment or as a home. What do you need to know before taking the plunge?

Many people choose to buy these kinds of properties ‘off the plans.’ Developers make building plans and specifications available to prospective purchasers and sell the properties ahead of construction as a method of convincing the bank to fund their project.

To secure one or more of these properties for yourself, you would need to enter into an agreement where you agree to pay a deposit (usually 5%–10 % of the developer’s asking price for the property) and then pay the balance on completion.

Before entering into any agreement with a developer, you should be aware of the advantages, and pitfalls, of buying off the plans. We have set out some below, but they are by no means exhaustive.

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Budget 2017 – An overview

June 9, 2017 by

The pundits were right. The Minister of Finance, the Hon Steven Joyce, presented his first Budget on Thursday 25 May and it was definitely a ‘steady as she goes affair’ with few surprises.
The Minister said the outlook for New Zealand’s economy is positive and the Crown’s books are steadily improving. We highlight some of the Budget’s key points below.

Tax cuts

From 1 April 2018, there will be tax cuts for every working New Zealander with particular emphasis on lower to middle income earners.

Income that can be earned at the lowest tax rate of 10.5% will rise from $14,000 to $22,000 which means $11 more a week. The 17.5% income tax rate will be raised from $48,000 to $52,000 giving an increase of $20 a week.

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