Meth contamination is a ‘hot issue’ in the property market, relevant to everyone and everywhere in New Zealand.
Recent reports show there are two issues affecting investors in residential property. The first is the LVR (loan to value ratio) requirements which, have slightly improved as at 1 January 2018. The second is Methamphetamine contamination – “P”. Unfortunately P houses and P contamination is here to stay and is really starting to take hold in managing property sales and purchases but also creates significant issues for Landlords.
Purchasers need to consider, as part of their due diligence, to test for Meth. A purchaser cannot rely on a property’s LIM (Land Information Memorandum) report to divulge whether the property has been exposed to Meth. A Council will only advise those details they are aware of. Therefore, it is becoming increasingly important to have a due diligence clause or a specific clause that refers to drug testing.
The process is about being informed. In 2016 a national standards committee was established which set benchmarks of acceptable levels of Meth. They distinguished between high use areas (easily accessible and regularly used by adults and children) or limited use areas (accessed by adults for a short duration including crawl spaces and wall cavities). These benchmarks are now encompassed in the Standards New Zealand, NZS8510:2017. Acceptable readings for High use areas are 1.50 ug (micrograms) per 100cm2 and below whereas limited use areas 3.8 ug per 100cm2 and below. Ministry of Health have endorsed this standard.
Remediation, can be a costly and lengthy process depending on the level of contamination. The NZS8510 also sets out industry standards of the process of remediation and accreditation for those businesses completing remediation. Previously, there were no standards and anyone could remediate.
The best advice is, have the property checked by an accredited sampler to see if any contamination exists before you buy.
It cannot be understated how important it is to have a Will whether you are young or in advanced years of life. If you have assets totalling $15,000 or more then, you need a will. For the simple reason that, banks, kiwisaver fund providers etc, will not accept the death certificate alone and require Probate (High Court authority) to distribute to the person who has been given the authority to deal with the estate. A lot of young people don’t even think about having a will and don’t realise their Kiwisaver fund is likely to tip them over the threshold and sadly, young people pass away too.
What will a Will do? Fundamentally it gives the Willmaker control over who their Executors and Trustees will be and who will receive their assets. Upon death, the Will is sent to the High Court to be proved and gives authority to the Executor named in the Will the right to deal with the estate.
If there is no Will then, the Administration Act 1969 dictates who can apply to the court to be given grant of administration of the estate. That may end up being someone you don’t want. The Administration Act also sets out who receives from your estate subject to other statutory rights to make claims. This has the potential of not turning out how you may have wanted.
The costs on an estate where there is no Will are much more expensive than, where a valid Will exists.
The team at Law4You can help you achieve the results you want.
If you are in the Hurunui region and need legal assistance or advice closer to you then, we are here to help. We are seeing our clients from our Hanmer Springs location saving you time and resources. We are available on the first Monday of each month. Contact our reception on 310 6464 or email us at firstname.lastname@example.org and make your appointment today.
How do you own your property?
One of the important questions I regularly ask clients when they are purchasing their property is how they want to own their property joint tenants or tenants in common. Then that glazed look comes over their faces and I know instantly they are unfamiliar with those phrases. Usually we have a quick tutorial in Property 101 and ownership types and what it means on death and whether they have children to previous relationships.
What’s all the fuss about then? Well it really does matter how you own your biggest asset – your home. If you hold the property as joint tenants, you cannot will your share and the survivor of the owners gets the property outright. For those with children together of that relationship they are likely to want joint tenants. On death it’s a simple transmission of the property title to the surviving party – easy!
Not so easy when the partners or spouses have children from previous relationships. They have different obligations to their own children that the other partner or spouse do not. They are likely to want to ensure their share of the property goes to their children – fair enough. In that situation, we recommend they hold the property as tenants in common. Here’s the catch – they have to update their wills to allow the surviving partner or spouse to live in the property either for a period or time or for their lifetime. Otherwise, the Executors of the deceased partner or spouse can take steps to sell the property to meet the obligations to the beneficiaries of the deceased party. It can really complicate matters and create more anxiety for the surviving party.
Tenants in common can also be a good ownership option when you are getting older and have no family trust. If one dies and the surviving party needed or might need residential care then, any asset assessment would only be on the surviving party’s share, not the estate.
Talk to the team at Law4You about the options when you are next buying your property and take the opportunity to update your wills.
Tenants should not enter into commercial leases lightly. When most tenants take the form of a company structure, the Landlord usually requires personal guarantees from the directors and shareholders. What are you personally guaranteeing? Predominantly, the guarantors will guarantee the payment of the rental and OPEX (operating expenses, aka outgoings eg rates, insurance etc) up to the end of the term of the lease if the Tenant defaults and can’t pay. This is an important point not to be overlooked. If the lease is assigned during the term of the Lease to another Tenant who subsequently defaults and doesn’t pay the rent the Landlord will look to the Guarantors for payment.
The guarantee also extends to the covenants implicit in the lease eg: repair and maintenance provisions.
How can the Guarantor mitigate their obligations?
- At the negotiation stage of the lease the tenants can negotiate so that the obligations of the guarantee terminate after a period, for instance, 1 or 2 years. The Landlord might be more amenable to this idea if the release is on the proviso that the tenant has complied with the obligations of the lease; or
- The guarantee could terminate on assignment of the lease; or
- The Tenant might try to assign close to the expiry of the term; or
- Another option may be to limit the amount the Guarantor is obligated for ie: a fixed sum.
There are options that can be explored in negotiating a new lease. Usually its preferable to enter into an Agreement to Lease to flush out any issues before being committed to the actual Lease itself.
Before you leap, talk to the team at Law4You to discuss your options.
Vendors conditions on settlement
You’ve gone through the selling process, had the purchaser on the ‘hook’, the contract is finally unconditional and now you’re gearing yourself up for shifting and settlement day.
Your focus is on the shift, cancelling utilities and looking forward to the next house. But wait, take a moment to pause and consider your obligations as a Vendor – what are they?
Did you know:
- It is a condition of settlement to provide all keys and remotes to all lockable doors and windows. Failure to do so, causing the purchaser to obtain locksmiths can cause retentions on settlement day.
- Vendors warranties in respect of chattels are now quite stringent. The obligation is for all chattels and any equipment or systems that provide services to the property eg: heating, air-conditioning, or the like, are to be in reasonable working order on settlement. That means if your heat pump suddenly stops providing heat and maybe too old to fix or get parts for, the Vendor could be required to provide a new working heat pump.
- Finally, you might take some time to consider whether there is any damage to the property and what is damage? Damage not causing the property to be untenantable renders the property subject to an insurance claim, fixing or possible retention. The property should be in the same state of repair as when the purchaser entered into the contract, but what say you removed Tv’s, mirrors, pictures leaving holes – some purchaser’s might consider this damage.
Its always a good idea to check with your lawyer when signing the final paperwork if you have any concerns.