Loan Documents: Read the fine print, there could be some surprises

Whether you like it or not, you will probably need to fund your farming operations with borrowing from one of New Zealand’s main trading banks.

The main terms that borrowers look at when signing loan facility documentation relate to the cost of the borrowing: interest rate, the amount of the repayment sums and the term of the lending. The security required is usually a mortgage over the farm land and, more often than not, a general security agreement which is effectively a mortgage over all of the farming entity’s assets that are not land such as stock, crops, machinery, receivables and so on.

Continue reading “Loan Documents: Read the fine print, there could be some surprises”

Property Briefs

Current tenants selling their business – what it means for a landlord

If you are a commercial building owner, you will at some point come across a situation where your current tenant wants to sell their business. Tenants often forget to talk to their landlord about them consenting to the new business owner.

When a business is sold, the current tenant is obliged to seek the landlord’s consent to assign the lease to the incoming business owner. The landlord usually has 10 days to approve the new tenant.

Continue reading “Property Briefs”

Being an Airbnb Host

You have significant obligations to a number of parties

In our Autumn/Winter edition (No 24) we discussed the tax aspects of being a host with Airbnb or other online accommodation platforms. We thought a reminder would be useful if you’re an existing host (or you’re thinking of letting your house/room) about obligations to your lender, insurer and local authority.

Before becoming the host-with-the-most with phenomenal reviews, it is important that not only do you understand the IRD’s requirements, but also that you are aware of your obligations to other ‘parties’ involved in what is your accommodation business.

Continue reading “Being an Airbnb Host”

Speak With Us Before you Sign the Agreement

Don’t be like John

Buying a house is known to be one of the most stressful times in your life, and competing with other would-be purchasers in a heated property market doesn’t help the stress levels.

Often the pressure can be on to make a snap decision and put an offer on a property that you’ve only had a quick look around. As the Agreement for Sale and Purchase of Real Estate is likely to be one of the most important documents you ever sign, make sure you talk with us first just so you know what you’re getting yourself in for.

Continue reading “Speak With Us Before you Sign the Agreement”

Over the Fence

Health and safety legislation sentencings expected

There are a number of developments in health and safety expected later this year. These include the first sentencings under the new Health and Safety at Work Act 2015 that are due to be released. As well, WorkSafe is expected to launch its Health and Safety Improvement Performance Toolkit. We will continue to monitor this and update you in the next edition of Rural eSpeaking due in summer.

 

Judgements of rural interest

Farmers unsuccessful in their claim against rural contractor

In May this year the High Court released its judgement in the case of A P and A W Hughes Limited v Lyall.[1] In 2014 Allan Lyall was contracted by A P and A W Hughes Limited to harvest a pea and barley crop for silage. When the silage was opened for feeding, which was three months after harvest, it was found to be in poor condition. The farmers attempted to sue the contractor for $300,000 worth of damage to the silage crop seeking compensation for the loss of winter feed.

The High Court found that the contractor used the skills expected of a reasonably competent silage contractor to implement the fall-back option of cut rake and chop that was agreed to by the farmers at the time of harvest. Despite this, soil was still incorporated in the silage by this process resulting in a loss of silage quality. The judge found the silage was poor quality because the crop was over-matured when it was harvested and this was not the contractor’s fault; it was simply the consequence of adopting an option agreed to by the parties to address the circumstances.

Continue reading “Over the Fence”

Fire Hazards

Look after your property

Four years ago we published an article about the risk of fire in the rural sector and the consequences of not holding appropriate insurance cover (Rural eSpeaking, Issue 12, Winter–Spring 2013). The number of rural fires throughout the country seems to be increasing each year.

Gisborne fire

Recently Stuff reported on a case in Gisborne[1] where the Gisborne District Council was found by a judge to have acted negligently by “failing to address a fire hazard on its block of land” when a fire began on the land and caused damage to the neighbouring sawmill owned by Double J Smallwoods Limited. The judge ordered the council to pay Double J Smallwoods’ owners more than $875,000 in damages for the loss caused by the fire, which had occurred some seven years before.

Continue reading “Fire Hazards”

Up in the Air: Using your drone

The use of drones is no longer limited to government agencies, technical gurus or the super wealthy. The market has been flooded with drones that are reasonably priced and are easy to use. These high-tech pieces of equipment are, however, bound by Civil Aviation Rules. In this article, we explore what rules there are around their use.

Drone technology allows a pilot to film and photograph from the sky allowing an aerial view that was once only available through the use of planes, helicopters or satellites. More and more businesses are using drone technology to assist them. Drones have been used in the agricultural sector to aid crop and stock inspection and, in August last year, Domino’s Pizza successfully delivered a pizza by drone.

Continue reading “Up in the Air: Using your drone”

A Helping Hand for First Home Buyers

Options for parents to help

It’s every Kiwi’s dream to own their own quarter-acre share of paradise. Unfortunately for many young people today, not only are the quarter-acre sections fast disappearing into multi-complex developments, but it’s also becoming harder than ever before with an ever-rising property market.

Every time you turn on the news, we hear something about the housing unaffordability in Auckland. Those south of the Bombay Hills start to get a bit glassy-eyed when listening to this on repeat. However, since the government’s introduction of the ‘LVR’ rules in October 2016 aimed at improving affordability in these markets, we must pay attention as all of New Zealand is affected.

The LVR explained

The loan-to-value ratio (LVR) is a measure of how much a lender will lend against a mortgaged property compared with the value of that property. Borrowers with LVRs of more than 80% (that’s less than 20% deposit) are often stretching their financial resources. As well, they are more vulnerable to an economic or financial shock, such as a recession or an increase in interest rates.

Continue reading “A Helping Hand for First Home Buyers”

Property Briefs

Hidden titles

If you or a member of your family have been granted a protection order under the Domestic Violence Act 1995 you can apply to the Registrar-General of Land under s108 of the Act to hide the information held about you on the Land Register which may otherwise disclose your whereabouts.

In practice this means that no-one can then search for your title information without your consent. The hidden title direction lasts for five years unless the protection order is discharged earlier; and it can be revoked at any time if your circumstances change.

Co-owners of the property must consent to your application as their details will also be concealed.

Continue reading “Property Briefs”

Making the Most of Your Agreement to Lease

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.

Continue reading “Making the Most of Your Agreement to Lease”