Building report conditions
If you have read an agreement for sale and purchase, you are likely to have seen the term ‘building report condition’. But do you know what a building report condition actually allows you to do, and what it doesn’t?
A building report condition gives you, as the buyer, the opportunity (10 working days is the standard, but this can be lengthened or reduced) to have a suitably qualified building inspector go through your soon-to-be-settled property and report on various elements of the building including the integrity of the construction materials used and its weathertightness.
Continue reading “Property briefs”
The ‘KFC test’ and tenant privacy
Following publicity in 2018 that some property managers were using the ‘KFC test’ to vet prospective tenants, landlords’ protection of their tenants’ privacy has come under scrutiny by the Privacy Commissioner. Any unlawful intrusion into your tenants’ private lives can be a costly mistake. If you are a landlord, it is timely to ask yourself, “How can I best protect my property without risking a privacy breach?”
Continue reading “The secret lives of tenants”
Steps to take for a successful project
Subdivisions are more common than you think. A subdivision can range from the carving up of hundreds of acres of rural land for housing, developing land in a prime commercial area, selling half your quarter-acre section or simply wanting to extend your boundary a few metres. Whatever the scale of your subdivision, there is a common thread of stages to be ticked off – we explain below.
Getting your land ready to subdivide
The first thing is to line up your professionals – discuss the project with us, arrange finance with your bank, consult your accountant and speak with a surveyor. If you are undertaking a large commercial development, you may want to line up buyers early on. A real estate agent can help with this so that you avoid cashflow issues half way through.
Continue reading “Subdivisions”
Claiming legitimate business expenses
With the recent media coverage about the claiming of business expenses, we thought it timely to remind you to always keep in mind what expenses are tax-deductible and what are not.
If you’re self-employed, there is very useful information here at Business NZ: https://bit.ly/31WdFgS
For those of you who work in a corporate environment, your organisation will no doubt have an expenses policy to ensure all claims are legitimate.
Continue reading “Postscript”
Risk of hefty penalties if you don’t
There are plenty of war stories about recordkeeping blunders. Think of offices crammed with paper, ‘lost’ documents, fireplace filing systems and online voids.
Section 194(1) of the Companies Act 1993 requires boards to keep correct accounting records. Records are supposed to ‘speak for themselves’ and allow the company’s financial position to be determined at any time with reasonable accuracy. Failure to keep proper records can badly hurt your business.
Continue reading “The importance of good recordkeeping”
Making a good choice
Having an executor of your will is like having a manager of your affairs (your estate) after your death. Your executor is named in your will; it is his or her role to carry out the terms of your will. Many people have more than one executor; it spreads the load and it’s also good to have another executor to discuss things with.
Who do you choose?
You can choose anyone to be your executor, but they do need some special qualities. You should consider:
Age: you want them to have the energy, ability and maturity to deal with your affairs. Sometimes this can be a fine balance – if you have someone older there’s a risk they could die before you or could become incapable of fulfilling their duties. However, someone younger may not have sufficient life experience to cope with the role.
Temperament: dealing with an estate can be quite emotional. You want your executors to be calm, steady, decisive and with loads of common sense.
Continue reading “The executor of your will”
Guest editorial: Kirsten Patterson,
CEO, Institute of Directors
The damage from governance failure can be profound, and can attract significant unwelcome media and public scrutiny. Focusing on the learnings from these cases is how we can get some real benefit and continuous improvement in corporate governance.
He tāngata – it is the people
Governance is, above all, about people. It’s a team game and, like any team, the board’s composition, and its culture and dynamic, are all critical to its effectiveness. Boards need a broad mix of skills and experience now and for the future. Individual attributes of directors are also highly relevant such as integrity, courage, judgement, emotional agility, energy and curiosity. Other factors relating to board composition include diversity, new membership and tenure. Getting the right mix and balance can be as much art as science. Putting time and thought into developing a skills matrix to determine the board’s needs is worth the investment.
Continue reading “People and the right information are vital for effective governance”
Implications for owners of forestry blocks
New Zealand’s Emissions Trading Scheme (ETS) was established by the Climate Change Response Act 2002. The ETS was created as the vehicle for New Zealand to meet its obligations for the reduction of greenhouse gas (GHG) emissions under the Kyoto Protocol. The purpose of the ETS is to achieve a reduction in GHG emissions through emissions trading. Emissions trading is the exchange of carbon credits between those parties with surplus credits and those who are required to contribute credits as compensation for their production of GHG emissions.
Although the ETS affects nearly all New Zealanders in some way, it has significant impact if you are buying or selling forestry blocks, and/or own a forestry block. The first part of this article focuses on the implications of buying and selling of forestry lots, or land destined to be planted in forests. The second part gives you some background on the ETS, New Zealand’s obligations under the Kyoto Protocol and this country’s acceptance of the Doha Amendment. Continue reading “Emissions Trading Scheme”
Mainzeal case – highlights director responsibilities
The recent high-profile Mainzeal case has highlighted the importance for directors to know and understand their duties under the Companies Act 1993.
Four of Mainzeal’s directors were found liable for $36 million in damages for breaching section 135 of the Act which is headed ‘reckless trading’. This section prohibits directors from agreeing to cause or allow the business of the company to be carried out in a way that is likely to create substantial risk of serious loss to the company’s creditors.
Continue reading “Business briefs”
Can be a real risk for business
When the Personal Property Securities Register (the PPSR) was established in 1999, most businesses were quick to catch on that it was a good idea to register security over goods that were sold under a line of credit. What wasn’t so easily recognised is that the register was designed to also capture leases of goods that are indefinite or extend past one year.
Businesses that frequently lease goods, or provide hire purchase arrangements, with the intention of remaining the true owner of the goods leased, do not always register their lease on the PPSR. They believe it to be an effective means of security that they retain legal ownership of the goods. This ownership can, however, be defeated by a registered interest on the PPSR and result in significant loss to their business.
Continue reading “PPSR lease losses”