EQC settlement limitations

We are nearly seven years on from the first Canterbury earthquake in 2010. Earthquake Commission claims have been numerous and in most part settled.   Any challenges to the settlement would normally need to be raised within six (6) years of settlement as covered by the statutory limitation periods.

 

EQC however, apply the six year period differently depending on how the claim was settled, for instance:

  1. Where payment is made in settlement – time runs from the date of payment;
  2. If the claim is settled through a repair – time runs from the date of practical completion;
  3. If the claim is declined – time runs from the date the decision to decline is communicated.

You may ask, what does this matter? For property lawyers conveying property, it may become a point of detail in the paperwork completed for settlements. Claims are assigned from vendor to purchaser and, where settled, a residual benefit in the Claim is transferred for latent damage (damage discovered that can only be attributable to earthquakes), land remediation or repairs that need to be revisited. It may be time to start looking at those early claims to see if there is any real life left in them depending on when and how they were settled, reducing the need to assign those claims outside the limitation expiry period.

EQC clauses in Agreements for Real Estate

Watch out for those EQC clauses when Buying and Selling properties.

For the most part, properties are sold via a real estate agent who will have their own generic clauses. These clauses may not be specific enough to address the issues with EQC. Consideration needs to be given to:

  1. When the EQC claim was made
  2. Is it settled
  3. How was it settled eg cash settled and who did the repairs or was it EQR/Fletcher managed
  4. What, if anything, is there to assign
  5. Can it be assigned ie were the current vendors assigned the claim(s) from the previous vendor

With the passage of time and so many properties bought and sold over, it can sometimes be difficult to determine exactly what has occurred unless good records have been taken. Legal advice should be taken at the outset to craft the EQC clause particular to your property. Vendors need to be mindful of their obligations when assigning claims and what they are assigning. This should be fully discussed at the time a property is listed for sale, in light of, what EQC cover:

  1. Household contents
  2. Residential Dwelling
  3. Land Remediation
  4. Increased Flooding Vulnerability for some designated areas
  5. Increased Liquefaction Vulnerability for some designated areas

If you are selling your property and you have been advised by EQC of compensation for land remediation, flooding or liquefaction vulnerability then you need to talk to your lawyer before agreeing to assign the claim.

Protecting those assets after Separation

Separation of couples can be an emotional rollercoaster and division of relationship property bringing finality to the couples assets and liabilities can be a welcome end to the saga.

Often people find themselves “starting over” with a financial setback. The reality is, whatever you come out with may set you up in a new home and you need to ask yourself ‘do I want to do this again’?

In practice I have completed many matrimonial settlements, more than I care to remember. My advice is always, “you will meet someone else and when you do remember my advice and protect your assets”.

Its really important that as we grow older that the assets we have worked to acquire don’t keep being divided with a partner in a break up. Critical assets like the main family home, car and household chattels, after a three year relationship, will be relationship property unless protection measures are taken.

The options are:
A Contracting Out Agreement with your new partner under the Property (Relationships) Act 1976.  Basically this, by its very name, is a contract. It says “whats yours is yours and whats mine is mine” and if we split you take your property and I keep mine. Its a great tool to a lot of parties. Some pitfalls are, like any contract, two parties need to sign it willingly. The risk is if the other party won’t sign – then what? The answer is – not alot, you can’t make the other party sign it and that can create strains in any relationship. The other question arises – is a full proof? The answer is, usually provided the necessary criteria is met under the Act and there is not substantial injustice to one party. Costs of these agreements can vary from lawyer to lawyer and each party must be seen by independent lawyers. The overall cost can become expensive however, if this is an option for you then, you need to consider it an investment in your future.

The other option is a family trust. The great things about trusts is that on separation whatever property you are left with, is your separate property.  By then placing it into a trust keeps it separate. When you enter new relationships, no matter with who or how frequent, the property in the Trust remains trust property which origins are from separate property and protected from Property Relationship claims provided however that no other relationship property is settled into the Trust to confuse the status of the Trust Fund. This can be a great option for those left with substantial assets on breakup however, the one pitfall is it only protects those assets in the Trust and unlike an agreement above, it may not cover the bank account, superannuation or the vintage cars – those assets belong under an agreement.  If you are seriously considering this option then who need to be careful of how you manage the Trust.  There is evolving case law where non-owning partners have an expectation or made a contribution to the property in the Trust and the Courts have recognized a constructive trust exists and therefore looked to make a settlement on the non-owning partner.

Costs to establish a trust can be substantial and again vary from lawyer to lawyer and only encouraged for those who fundamentally understand the workings of a trust.

Whatever the method, there are protective steps you can take – be rest assured no matter how difficult the break up is – we often end up in new relationships.

Kiwisaver & Housing New Zealand

We are often helping our clients with the paperwork for Kiwisaver withdrawal applications and Housing New Zealand (HNZ) first home grants. Whilst we are very familiar with the process and the paper war our clients, understandably, are not and it can be overwhelming.

These are similar but different applications. To give you an idea:

The HNZ subsidy is an online application where you attach the agreement you have entered into to purchase the property and confirm kiwisaver contributions. If successful, you then receive a letter advising how much you are entitled to and requesting information of how you are paying for the property. This usually requires recent confirmation from your Bank of the funds in your bank account if being used towards the deposit. Your kiwisaver withdrawal can also make up part of your deposit. Once accepted HNZ then generate an agreement which is sent to your lawyers who are then required to advise you on it, have you sign it and return it to HNZ.

The Kiwisaver withdrawal application is quite different. Each kiwisaver fund provider have different forms with different identification and proof of address requirements. It pays to read the forms first, collect all the information before you head into the lawyer’s office.   You will need the application to be statutory declared in front of your lawyer or a Justice of the Peace.

If you have owned a property (even bare land) previously then, you need to complete the online application with HNZ to be a second chance home buyer to allow you to proceed with your kiwsaver withdrawal. That is a separate online application to the application for the HNZ subsidy. If accepted HNZ provide you with a one page letter advising you of your eligibility and that then is provided to your kiwisaver fund provider.

Its important to ensure the applications are being processed in a timely fashion to meet deadlines for contracts and settlement dates.

Congratulations to Diane Alderson

Law4You would like to extend a big, warm congratulations to our Legal Executive, Diane, who has completed her Legal Executive course and is now a registered Legal Executive.

Diane can assist our clients with Estates, Trusts and Conveyancing.

Well done Diane.

 

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Change of Hours

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