Disputes in contracts
Welcome to the Summer 2021 edition of Property Speaking, and the last issue for the year.
Property
Lease vs licence
Leases and licences are common contractual arrangements. Although both are similar, there are crucial differences between them which can have significant implications for anyone who owns or occupies commercial premises.
Property briefs – June 2021
The big ticket items of the government’s recent housing package included the extension to the bright-line test as well as landlords no longer being able to offset their tax with interest paid on their rentals.
Clarity around fixtures and fittings
In December 2020, a commercial landlord and their tenant found themselves in the High Court arguing about who was responsible for replacing fixtures and fittings because their lease was silent on the issue. These types of disputes around fixtures and fittings in commercial leases are quite common.
Recent property tax changes
In March 2021, the government announced three changes to property tax rules that are likely to affect anyone with residential property investments. The changes include extending the bright-line period from five years to 10 years, changing the main home exemption ‘test’ and removing the ability to deduct mortgage interest from rental income.
Over the fence – Autumn 2021
The Privacy Act 2020 came into force on 1 December 2020, replacing the Privacy Act 1993. It has introduced new requirements for New Zealand businesses (including farms) and organisations to give greater protections for individuals.
Are trusts still fit for purpose?
Still fit for purpose for farm ownership and succession?
Trusts have long been the preferred vehicle for farm ownership. Historically, holding a property through a trust meant that ownership did not change on the death of the farmer and, therefore, any death duties could be avoided during the generational change.
Rural leases
Leasing of farms, orchards and cropping land is becoming more common. It is a good way for farming operations to expand without capital commitments involved in buying land. For landowners, it can be a useful way to retain ownership of the capital but give away the day-to-day farming operations, either through a desire to semi-retire or to hold the farming asset for a period while family or continued ownership issues are resolved.
Property briefs – Autumn 2021
A warning from Insurance Council of New Zealand: Is your property fully insured? Also, we consider the implications of Stage 2 of the Residential Tenancies Act changes, now in force. Now that it is more difficult to remove an unwanted tenant from your rental property, it is crucial to do your due diligence on a prospective tenant, but be aware of their right to privacy.
Reverse mortgages
Some older homeowners are seeking ‘reverse mortgages’ from their lenders in order to release the growing equity in their property. Here’s what you need to know.