The damage from governance failure can be profound, and attract unwelcome media and public scrutiny. Governance is, above all, about people. It’s a team game and, like any team, the board’s composition, its culture and dynamic, are critical to its effectiveness. Boards need a broad mix of skills and experience and a balanced board supports open debate, diversity, and constructive dissent. Management is part of the wider governance team and this relationship must be nurtured and valued. A board exists to support and guide management, as well as to hold them to account for performance and compliance matters.The roles and responsibilities of individual directors, the board and management should be clearly understood and recorded. The company’s constitution, a board charter and letters of appointment are all key tools to help set out roles, responsibilities and expectations.A board must make decisions based on sufficient, accurate, relevant and timely information. It must define its information requirements so that reporting is meaningful, with management providing thoughtful interpretation about key matters. Measuring what matters, and providing trend information, has never been more important for an organisation’s core financial and non-financial performance indicators. If the board’s information requirements aren’t being met by management, this should be raised as a priority.A board, like any team, must focus on continuous improvement to ensure ongoing effective corporate governance. Board and director evaluations help hold the board accountable and improve individual director and whole-of-board performance. Evaluation, formal and/or informal, should be undertaken regularly to help boards and directors identify their strengths and weaknesses, assess their performance and determine opportunities to improve. Ongoing director development is a core focus for the Institute of Directors, through resources, courses and events. At the end of each meeting, all boards should also be able to answer, ‘Did we add value today?'DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this article. Views expressed are those of individual authors, and do not necessarily reflect the view of this firm. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source. Copyright, NZ LAW Limited, 2019. Editor: Adrienne Olsen. E-mail: [email protected]. Ph: 029 286 3650 or 04 496 5513.Aspiring Law is proud to be a member of NZ LAW Limited, an association of 53 law practices working together to proactively share ideas and expertise for the benefit of our clients.

Have an expertly-drafted agreementRestraint of trade clauses are common in the sale and purchase of a business and in some employment agreements. In a business context, they offer protection to a buyer who has acquired a business and prevent the seller from directly competing against the buyer. A restraint provision in an employment context is designed to protect the employer’s business interests when key employees leave. There’s a general perception that these clauses are difficult to enforce, so why bother?Non-competition restraint – sale of a businessThe purpose of a non-competition restraint in regard to the sale of a business is to ensure that the purchaser is able to retain the benefits of the business they have purchased including existing and potential customers. It prevents the seller from establishing, working for or being involved in a similar business. Non-competition restraints are routinely used in the sale and purchase of businesses.Non-competition restraint – employment agreementThe first consideration before inserting a restraint of trade clause in an employment agreement is to decide whether or not you, as the employer, have a proprietary right (be it trade connections or trade secrets) which might be considered reasonable to protect. The effect of a restraint in an employment agreement is to prevent your employee from working for a competitor or opening a competing business immediately after their employment ends. Due to the restriction placed on any employee’s livelihood, the necessity for the restraint (which will benefit you as their employer) must be balanced against your employee’s right to earn an income (a restriction for your employee).Is the restraint reasonable?In determining whether a restraint of trade is reasonable, the courts will consider the following factors:·Do you as an employer have a proprietary interest (trade or customer connections) capable of protection?·Is it reasonable that your employee be restrained from the specified activities?·Is the period of the restraint reasonable?·Are the geographical limits of the restraint reasonable?·What compensation was given to your employee in exchange for them agreeing to be restrained after the end of their employment?The larger the geographical area and the longer the time restriction, the more likely a restraint of trade will be considered unreasonable.Is it enforceable?Absolutely – if the restraint of trade clause has been carefully and correctly drafted according to the specific circumstances of the employment environment and relationship. If it is unnecessarily restrictive, it is more likely it will be unenforceable. The courts have considerable power to delete the restraint, modify it to make it reasonable or deem it unenforceable.There are also a number of alternative ways you can protect your business, including non-solicitation, confidentiality, intellectual property and confidential information – perhaps articles for another day!DISCLAIMER: All the information published in Commercial eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this article. Views expressed are those of individual authors, and do not necessarily reflect the view of this firm. Articles appearing in Commercial eSpeaking may be reproduced with prior approval from the editor and credit given to the source. Copyright, NZ LAW Limited, 2019. Editor: Adrienne Olsen. E-mail: [email protected]. Ph: 029 286 3650 or 04 496 5513.

The new Trusts Act 2019 will simplify trusts law. To date, trustees had no legal requirement to keep beneficiaries informed about the trust, or report on their activities. The Act will firm up the requirements to provide information to beneficiaries unless there’s good reason not to.Another positive to come from the new Act is that trustees can refer disputes to an alternative dispute resolution process like mediation or arbitration, instead of the court, making it much more affordable to resolve disputes. The Act also alters the maximum lifespan of a trust from the usual 80-year term to 125 years. Currently, there seems to be a lack of general understanding around what being a trustee actually means, and what trustees have to do. The Act outlines the duties that trustees have when they sign up to their role. The mandatory duties include:1) Know the terms of the trust2) Follow the trust’s terms3) Act honestly and in good faith4) Use their powers for a proper purpose5) Act for the benefit of the beneficiaries or to further permitted purposes of the trust.There are also 10 default duties listed in the Act that can be changed by the trust deed including: a general duty of care, investing prudently, avoiding conflicts of interest, and others. Trustees will also need to comply with minimum requirements for record-keeping and document retention. The Act aims to improve clarity around trustee responsibilities and trust structures. Beneficiaries will be able to receive information on trust activities more easily, giving them greater insight into how trustees manage the trust. Trustees, meanwhile, will be better informed on the requirements of their role before agreeing to take on the responsibility which should mean less surprises about what is involved.Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected]: 03 443 0900W: www.aspiringlaw.co.nzDanielle Ward is a Solicitor at Aspiring Law, and specialises in Elder Law and Life Planning, including Wills, Trusts and Enduring Powers of Attorney.Please remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue.

The devastating gas explosion that rocked a quiet Christchurch street earlier this year made me think about Public Liability insurance. Yeah I know that sounds a bit weird. My first thoughts were obviously with the family and the neighbours affected by the blast but being a typical lawyer I couldn't help wonder if the gas contractor who called to the property the day before had Public Liability insurance. Six people were injured and it was a miracle nobody died considering the force of the explosion. Police and WorkSafe investigations into what happened are ongoing. Regardless of the outcome, I sincerely hope the contractor had Public Liability insurance. Most New Zealand businesses have some form of Public Liability insurance but they tend to sign the application form and chuck the policy in a drawer where it gathers dust. Businesses often forget it’s the insured parties’ responsibility to ensure they have the right cover in place. It is that old cliché of ‘buyer beware’. When you’re getting insurance it’s up to you to make sure you have enough cover.Businesses need to insure themselves for an amount that is sufficient for the risk that could arise out of the work that they are doing. The most common level of cover for Public Liability insurance seems to be around $1 million but a million bucks wouldn't go anywhere near to covering the amount of damage caused by the explosion in Christchurch, for example. Ask yourself this question: ‘If something happened, would the amount my business is insured for be sufficient to pay what I need to pay?’ That is what Public Liability insurance is for. It is to cover any damage caused to the general public by the business and/or its employees. Insurance pays for damage that the business owner would otherwise be liable for.Insurance brokers can give you advice on the type of cover you need but your accountant and lawyer are well placed to understand the scale of the business activity and how much you should be covered for.Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected] or to book an appointment online visit: http://aspiringlaw.co.nz/Booking/. Janice Hughes is a Director of, and senior legal adviser at, Aspiring Law. Please remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue.

When a relationship comes to an end, the divvying up of relationship property is no walk in the park. Often it can take months, if not years, for disagreements to be resolved. It’s an emotionally charged time, and it doesn’t help that the law in this area has some blurred lines when it comes to the division of relationship property. At present, who gets what at the end of a relationship is covered by the Property (Relationships) Act 1976, with a 50:50 split being the general rule of thumb. This general rule does not apply to all relationships. Thankfully, there is a way to navigate this period of turmoil and save unneeded heartache and bitterness. But it does involve a rather awkward, if not downright uncomfortable, conversation around the ‘what if’ of separation.Section 21 of the Property (Relationships) Act gives couples the right to ‘contract out’ of the legislation governing how property should be divided following a separation. This agreement, more commonly known as a ‘prenup’, is not just for those contemplating marriage or those with wealthy families. It’s important for any couple contemplating a civil union or de facto relationship.There are three key questions that must be answered in creating a contracting-out agreement:1) What assets will be ‘relationship property’ and owned together either equally or in specific proportions?2) What assets will remain the separate property of each party?3) What assets will not be separate property because they will be used jointly?The time to consider a contracting-out agreement is when you and your partner are contemplating buying property together. As hard as it may be to broach this topic with your partner, the earlier you do it the better, especially where children are involved or parties are making differing contributions towards property. Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected]: 03 443 0900W: www.aspiringlaw.co.nzPlease remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue.

Responding to a negative customer review online can be very stressful but a gut reaction and a hastily written reply can cause far more trouble than it's worth.Instead, a considered and polite approach might actually help win the dissatisfied customer back.Some New Zealand businesses have shown us how NOT to respond to online reviews. An accommodation booking company was alleged to have manipulated online user reviews following an investigation by the Commerce Commission. Over more than a year, the organisation was claimed to have breached Section 11 of the Fair Trading Act 1986 for altering negative reviews before they were published online or failing to upload reviews.Any person contravening Section 11 is liable for a fine up to $200,000, while businesses face a maximum $600,000 penalty.Online reviews can’t just be ignored, they can’t be deleted, and there’s no sense in escalating any aggravation further. Forecasting the different kinds of reviews you may get and how to deal with them is important. Responding promptly, constructively and positively to comments can be the difference between a customer who is willing to forgive and forget or one that carries a grudge and causes more damage to your business.You should treat how you respond to negative comments online as you would any feedback in person or over the phone. Responding with more negativity will worsen the problem. Approach the situation calmly, quickly and with a plan. This helps you avoid further issues and maintains your online reputation.If you need a second opinion on how to approach your online review, feel free to contact John Mezger, business law specialist with Aspiring Law.Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected]: 03 443 0900W: www.aspiringlaw.co.nzJohn Mezger specialises in business, employment and immigration law at Aspiring Law.Please remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue.

New Zealand has changed significantly over the last half-century. The Property (Relationships) Act 1976 was drafted at a time when couples generally married young and pooled their resources to buy a house as early as they could, a time when ABBA’s ‘Fernando’ topped the national charts and Fred Dagg and Footrot Flats made Kiwis laugh out loud.Our rampant housing market, online dating and cheaper travel opportunities have changed how people engage with one another and when they settle down. The majority of people now wait until much later in life to commit to a relationship.That means more instances of people bringing assets, property or financial savings into a relationship and can also mean greater disparity in wealth and earning power between partners.As a result, a review of the Property (Relationships) Act was long overdue. The NZ Law Commission recently recommended changes to the Act to make the law fairer for partners dividing property and finances at the end of a relationship.Under the current law, the family home automatically becomes relationship property. That means, if the couple separates, the original homeowner is forced to divide the property equally with their ex even if one of the parties owned the home prior to their relationship. A change to this ruling means that only the increase in the value of the property, while it is being used as a family home during the relationship, will have to be divided between the partners.Another major alteration being proposed is to introduce Family Income Sharing Arrangements (FISAs) requiring individuals with high earning power or personal savings to share income for a limited period following separation from their former partner. Children’s interests are also a focus to make sure they are given greater priority and administrative changes designed to streamline the process has also been proposed. The coming changes should ensure more support for financially vulnerable individuals and a much fairer system for all. Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected]. T: 03 443 0900W: www.aspiringlaw.co.nzGillian Stuart is Aspiring Law’s Family Law specialist.Please remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue.

Change is on the horizon for overseas property investment regulations as the second and final stage of the review of the Overseas Investment Act 2005 gets underway.Initial amendments, introduced last year, included major changes to the definition of ‘sensitive land’ and ultimately made it more difficult for most offshore buyers to purchase residential property in NZ.The government’s proposed reforms focus on three areas that will affect how the Overseas Investment Office (OIO) screen candidates in the future.The Act currently specifies the different assets or ‘interests’ in those assets that require consent from the OIO. This restricts the kinds of properties offshore investors can purchase, adds additional costs to purchasers and also slows down property transactions. The new proposals will look at streamlining this buying bottleneck.Another proposed change relates to leases. Currently, a non-New Zealand resident requires OIO consent if they take on a residential lease for a period exceeding 3 years. This means they are required to go through the same process as an offshore person buying residential land. The reforms will look at extending the lease period to 10 years so that residential leases under ten years do not require OIO consent. This will make investment by foreigners in residential leases easier.The OIO consent process is complex, lengthy and costly. Investors must meet certain character requirements and show that the investment will benefit NZ. The reforms will look at how this process can be simplified.The Government’s proposals will hopefully improve the current regulations. While this second stage of changes isn’t intended to make it easier for an overseas person to buy land, the reforms are intended to clarify applicant criteria for purchasing property in New Zealand. It is anticipated that the proposed changes will also remove many complexities from the first round of amendments to the Act and streamline the screening process.Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected]: 03 443 0900W: www.aspiringlaw.co.nzMike Toepfer is a Director of Aspiring Law.Please remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue.

Making a good choiceHaving 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.• How well they know you: it’s good to have an executor who knows you and, in general, understands how you run your affairs. A large part of an executor’s role can be information gathering, and having some prior knowledge can help them know how to go about this.You can appoint anyone to be an executor; many people choose their spouse or partner and/or some of their children. Sometimes, people name someone independent as an executor, such as a long-standing friend. This can be especially useful when there are blended families or a disharmonious family situation.Executors don’t have to manage your estate alone; your estate’s lawyer will guide executors through each step of the way.What do executors do?One of the executors’ first duties is making sure they have a clear understanding of the contents of your will.Working with your family, executors are responsible for arranging burial or cremation. They must ensure that, if necessary, your home is secured, all insurable assets insured, pets are taken care of, deliveries cancelled, outgoings paid (electricity, rates, insurances) and the insurers advised if the house is empty.If you were still working at the time you died, final paperwork and your personal items at work will need to be sorted. If you were a business owner, it may be necessary to get a trusted employee to step in, for the short term, to keep on top of things such as wages, bills, suppliers and customers.To help wind up your estate, your executors must gather information about your assets such as bank accounts and investments, KiwiSaver and superannuation, insurances, benefits, property and motor vehicles.It is important for executors to identify any jointly held property and any debts, such as mortgages, credit card bills and so on.Through the estate’s lawyer, the executors must ensure that all the estate’s debts are paid. Executors are personally liable to meet these debts, unless they satisfy specific legal requirements.When they have the complete picture of the estate, the executors can then manage the distribution of your assets to your beneficiaries in accordance with your will. This usually requires an application for probate, a court order confirming the will. The estate’s lawyer will help the executors with this.When does an executors’ role end?The executors’ role is completed when all taxes and expenses have been paid, and all distributions to adult beneficiaries have been made. If there are underage beneficiaries then the trustees nominated by the will step in to hold that benefit for those children until they are old enough. In practice, the trustee and executor are almost always the same person, but they do have slightly different obligations and responsibilities. Should your executors live locally? Your executors can live anywhere, but it does make it much easier logistically if they are in the same region, or at least close, to where you were living. This is becoming less of an issue with technology, but it’s still something to take into account.Choosing executors is important when you are making, or reviewing, your will. They have significant obligations and responsibilities in making sure your assets are managed in the way that you intended.If you have any queries about appointing or changing an executor, or you are an executor and have some queries, please don’t hesitate to call us.DISCLAIMER: All the information published in Fineprint is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this article. Views expressed are those of individual authors, and do not necessarily reflect the view of this firm. Articles appearing in Fineprint may be reproduced with prior approval from the editor and credit given to the source. Copyright, NZ LAW Limited, 2019. Editor: Adrienne Olsen. E-mail: [email protected]. Ph: 029 286 3650 or 04 496 5513.Aspiring Law is proud to be a member of NZ LAW Limited, an association of 53 law practices working together to proactively share ideas and expertise for the benefit of our clients.

Mainzeal’s and Dame Jenny Shipley’s recent fall from grace should serve as a wake-up call to all who hold governance responsibilities, regardless of industry or organisational size. Many people in governance roles are oblivious to the nature and scope of their duties, or assume liquidators will only pursue big-name leaders of multi-million-dollar corporates when things go belly-up.Mainzeal collapsed in 2013 owing $110 million to unsecured creditors. The liquidators sued four former directors – including Dame Jenny, who was Chair. In his finding, the Judge ruled against the defendants, determining they should pay $36 million in total.If you’re in any type of governance role and you play your cards wrong, this could happen to you. Just recently, liquidators investigated the directors of another collapsed construction company. The losses in question? Well under a million. That might not seem much in a commercial context but it’s a lot if you have to pay it out of your personal coffers. That’s exactly what many people who take on governance roles don’t appreciate – if things turn to custard and losses are incurred, you can be liable to pay any shortfall.   Organisations should check they have liability insurance and understand the policy. Make sure the cover is commensurate with any risk and review your insurance regularly. One day, your life savings might depend on it. The Charities Services’ website – charities.govt.nz – has some great information for officers of not-for-profits.Before you sign up for a governance role, make sure you are clear on the duties and potential personal risk you are signing up for. If in doubt, now’s the time to check it out with your legal adviser.Janice Hughes is a Director of Aspiring Law. Please remember this information is designed as a general guide, and should not replace specific legal advice on a particular issue. If you have questions or feedback about this article, please contact Janice on 03 443 0900, or email [email protected].

How the clean slate legislation worksEmploying staff is never a simple process. Finding people with the right skills and personality to fit into your team can be challenging. Today’s employers go through a rigorous process when recruiting; most believe it’s better to put time into getting the right person than to have to deal with the consequences if things don’t work out.One aspect of all staff recruitment is background checks on applicants. This is more important in some roles than others.It’s standard to ask prospective employees to submit forms, and provide CVs and evidence of qualifications. Many employers also include a question regarding past criminal convictions, but this is not a surefire way of getting the full picture of an applicant’s background. Job applicants are not required to declare convictions in certain situations as they are ‘clean-slated’. Being ‘clean-slated’The Clean Slate Act or clean slate scheme, more formally and correctly known as the Criminal Records (Clean Slate) Act 2004, became law almost 15 years ago. Its purpose was to limit the effects of historic criminal convictions on a person’s future.The Clean Slate Act limits the effect of convictions if certain criteria are satisfied. If it has been seven years since someone was convicted, they are considered to have no criminal record in certain situations.For anyone to be ‘clean-slated’, they must have:No convictions within the last seven yearsNever been sentenced to a custodial sentenceNever been convicted of a specified offence such as sexual offending against young childrenPaid any fine, compensation, reparation or other monetary penalty ordered by a court following a criminal caseNever been indefinitely banned from driving, andNever been held in hospital by the court in a criminal case due to their mental stateThose who meet the above criteria are entitled, when completing a job application, to state they have no criminal convictions. Section 14 of the Clean Slate Act expressly states that when asked, a person can state they have no criminal record if they are eligible under the legislation.The application of the Clean Slate Act is automatic (there is no application process) and, once ‘clean-slated’, a criminal record will show a clear history.Employers should be aware that it is an offence to require someone to declare convictions that have been subject to the Clean Slate Act. Any person who disregards the effect of the scheme and requests disclosure of ‘clean slate’ convictions can be fined up to $10,000.Obviously, employers are entitled to ask candidates to declare a conviction that is not subject to the Clean Slate Act.One difficulty that can arise for employers is if the role requires their employee to travel overseas. Immigration authorities in other jurisdictions are not required to adhere to New Zealand law and can ask for all convictions to be declared. Visas may be declined if there is a criminal conviction, however minor. ExceptionsThere are a number of exceptions in the clean slate regime. Anyone eligible under the Clean Slate Act to have conviction/s ‘removed’, must still declare all convictions if applying apply for a job in a national security role as a police employee, prison or probation officer or security officer, or as a judge, Justice of the Peace or community magistrate.Employers who are concerned about previous criminal offences should remember it is not an offence for employers to carry out background checks on google and social media. Information about a prospective employee’s past can often be found through these channels. Job applicants can’t escape the reach of the internet.The clean slate legislation was established to allow people to have a second chance. In the majority of jobs, historic convictions from over seven years ago are not a barrier to employment, and people have moved on from their mistakes of the past. DISCLAIMER: All the information published in Commercial eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this article. Views expressed are those of individual authors, and do not necessarily reflect the view of this firm. Articles appearing in Commercial eSpeaking may be reproduced with prior approval from the editor and credit given to the source. Copyright, NZ LAW Limited, 2019. Editor: Adrienne Olsen. E-mail: [email protected]. Ph: 029 286 3650 or 04 496 5513.Aspiring Law is proud to be a member of NZ LAW Limited, an association of 55 law practices working together to proactively share ideas and expertise for the benefit of our clients.  

Innovation has seen a number of plant-based meat alternatives grow in popularity. These plant-based products often use terms such as ‘milk, ‘patty’ or ‘steak’ to label their products. European authorities are currently looking at whether such terms should be restricted to use with animal-based products only. There is a similar movement in Australia to prevent almond and soy-based products being labelled as ‘milk’.Here in New Zealand, Federated Farmers has indicated that it may push the government to follow suit, depending on the success of similar movements overseas.HELL Pizza found itself in hot water with consumers after failing to disclose to customers that its ‘Burger Pizza’ used plant-based meat alternative, Beyond Meat, in its toppings. Such cases raise questions under the Fair Trading Act 1986, which prohibits ‘misleading or deceptive conduct’ in trade.The success of overseas movements may have ramifications for local producers of plant-based products wanting to export their goods. It may also influence our government to toughen its stance on the labelling of plant-based products.DISCLAIMER: All the information published in Commercial eSpeaking is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this article. Views expressed are those of individual authors, and do not necessarily reflect the view of this firm. Articles appearing in Commercial eSpeaking may be reproduced with prior approval from the editor and credit given to the source.Copyright, NZ LAW Limited, 2019. Editor: Adrienne Olsen. E-mail: [email protected]. Ph: 029 286 3650 or 04 496 5513.Aspiring Law is proud to be a member of NZ LAW Limited, an association of 55 law practices working together to proactively share ideas and expertise for the benefit of our clients.

Ever since the first major Christchurch earthquake, homeowners’ insurance has never been far from the headlines – and, nearly nine years down the track, householders need to be right across the fact the goalposts are still moving.One of the latest developments is insurance companies increasingly preferring “risk-based” pricing – a move that’s bringing some pretty high-voltage bill shock for those in certain areas, or with particular properties.Around the country, we’re seeing stories of insurance proving cost-prohibitive for some. We’ve already had clients here, staggered that the new property they’re looking at buying will cost many times more to cover insurance-wise than what they’ve been used to stumping up.Is it in your budget?In this new “risk-based” pricing era, if you’re looking at buying a new property, you want to know before you’re fully committed to the purchase whether or not you can stomach the premiums.Give yourself the space to make an informed decision. Consider including a condition in the sale and purchase agreement that allows you to confirm insurance – on terms and conditions and at a price that are acceptable to you – before committing to finalising the sale. Older property?Risk-based pricing aside, don’t assume arranging insurance is a quick phone call, handing over the property details, job done.Particularly with pre-1945 dwellings, insurers tend to have a list of checks and balances before offering cover, including seeking confirmation the likes of electrical switchboards, wiring, roofing, plumbing and wall linings are up to scratch. Case in point: just recently we had a situation where a client’s insurer wouldn’t even consider the property until an electrician, plumber and builder had provided professional reassurances – all at the potential buyer’s expense.Are you absolutely, fully covered?Given my line of work, it’s probably not surprising I’m particularly alive to the vagaries of insurance. Seeing what I’ve seen over the years, I apply the finest of fine-tooth combs when arranging and checking my own cover. Not so long ago, my eyes shot open at about 3am. Note to self in the wee, small hours: DO NOT FORGET to recalculate the sum insured on our house insurance before renewing it. Renewal was still some three-odd months away but, still, the consequences of having that one slip off the radar aren’t even worth thinking about.If, like me, you have “agreed value” insurance – as opposed to “full replacement” cover – to avoid ending up inadvertently under-insured, it’s imperative you carefully recalculate the sum insured each year. It pains me the number of people who just let it roll over year to year. What many homeowners don’t appreciate, until claim time, is that building costs can rise sharply over a relatively short period. Another common oversight sees homeowners fail to take into account costs like clearing a damaged home from the site, leaving an often-painful deficit in the rebuild kitty. So, don’t just take a vague stab at a figure when you recalculate the sum insured. Do your homework and arrive at a relevant and realistic figure. Your ability to replace your home, should the worst happen, might just depend on it. Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected]: 03 443 0900W: www.aspiringlaw.co.nzJanice Hughes is a Director of, and senior legal adviser at, Aspiring Law. Please remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue. 

After four months of remote working (from Wellington, San Francisco, Florida, and even Canada), Practice Manager, Cindy Laberge, now counts herself as part of the local full-time contingent at Aspiring Law. Wanaka is now home since she moved here earlier this month. (Click here for Cindy's first article on remote working).But for Aspiring Law Directors Janice Hughes’ and Mike Toepfer’s openness to try remote working, there is no way that Cindy and Aspiring Law could have teamed up. While conducting meetings from a variety of time zones could present its challenges, the pay-offs, in the end, were worth it. The team is now into its fifth month of a successful relationship. In fact, it was so successful that Aspiring Law has augmented its support team to include professionals from three different locations inside and outside of New Zealand. And it is currently recruiting additional legal talent – from anywhere inside New Zealand.In Cindy’s experience, for a remote working opportunity to be successful, there must be trust, discipline and technology. But that doesn’t mean that effort should not be invested in finding a way to connect in person.“Although you can start a relationship online, the best way to develop it is to have a chance to get to know each other a little better face-to-face; that’s how great teams are created. And that’s not hard to do.For example, when one of our fellow remote workers indicated that he would be in Otago sometime later this year, it was a no-brainer to invite him and his family to stay with ours. I love that this technological age enables people to broaden their circles both professionally and personally. It just makes me feel that the world has fewer and fewer strangers in it – and that has to be a good thing.”Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected]: 03 443 0900W: www.aspiringlaw.co.nzCindy Laberge Practice Manager 

With lengthening life expectancies, better health in later years, and increasing divorce rates, it’s not surprising we’re seeing more “twilight relationships” blossom.Just like at any other age and stage, though, romantic couplings in the senior years bring significant legal considerations – arguably, even more so. And, that can be particularly the case if there are offspring from previous relationships.First up, as we advise younger couples, it’s really important you address the legal ramifications of your relationship early on. Sure, it probably won’t be the most romantic of conversations, but checking each other’s take on the relationship, and putting the right legal mechanisms and protections in place, can prevent a messy, and costly, battle over assets should the relationship break down, or when one of you passes on.As soon into the relationship as possible, take legal advice. Typically, a lawyer will want to know, firstly, if you have a Will, and secondly, that it’s up to date. A legal assessment should also include whether you have a Trust, and a review of that, given the budding relationship. A lawyer will also want to know if you have an Enduring Power of Attorney that needs updated in light of your new partner, and will likely recommend you have one drafted if this important protection is missing out of your legal toolkit.More on this later, but if you separate, or when you die, your assets will be divided pursuant to the Property (Relationships) Act – that’s quite prescriptive, and often doesn’t suit the parties involved at all. So, a legal assessment should also consider the merits of a “Contracting Out Agreement”, which, as long as it’s robust, allows you to depart from the law’s default provisions, and decide what your asset divvy-up should be in the event of separation, or death.Every case is different and, especially in the case of twilight relationships, can become increasingly complex the more family members, assets and legal structures there are at play. To give you a general idea, though, here’s a look at some of the key considerations:WillsIf you’ve entered into a relationship since the death of, or estrangement from, your previous spouse or partner, you’ll need to ensure your Will is up to date, and that they are no longer an executor or beneficiary.You may want to appoint your new partner as an executor or beneficiary, or, if you have adult children, consider appointing one or more of them as executors.If you have grandchildren, this can be a great time to consider whether you’d like them taken into account in your wishes.TrustsNow may also be the perfect opportunity to review your Trust deeds and ensure they are up to date. Key checks usually include:Is gifting complete?Are trustees still alive, mentally capable, or, in the case of professional trustees, in practiceAre the memoranda of wishes still relevant?Depending where your relationship is at, you might want to discuss with your lawyer your new partner becoming a beneficiary of the Trust. Alternatively, it might be better, in your circumstances, to ensure what’s in your Trust goes solely to your children, and is protected from your new partner – or, as is more common, from their family.It might also be timely to consider appointing your children as trustees and including any grandchildren as beneficiaries, or to ensure your Will or memorandum of wishes appoints them after your death.Enduring Powers of AttorneyFirstly, it’s important you have an Enduring Power of Attorney, and, next that it’s reviewed in light of your new relationship.You might want to look at whether it’s appropriate to have your current partner appointed to act on your behalf, or that provision is made that they be consulted or provided information on how your attorney is carrying out their duties.Contracting Out AgreementsIf you’re in a relationship with someone who has adult children from a previous marriage, especially if you have adult children from an earlier union, you may want to ensure your children’s interest in your estate and any Trust is protected. As mentioned, typically people want this not so much to shut their new partner out from assets, but rather their partner’s children, who might be able to lay claim to your assets.If you’ve been in a relationship for more than three years, that’s usually classed as being de facto, and might mean parts of your asset pool have become classed as relationship property – if they’ve been accrued or obtained since the new relationship started.This means that your partner (or their children) can elect to claim 50 percent of that property after your death, if you die first. The election the surviving partner has to make is whether they want to apply to have 50 percent of the deceased’s property transferred to them (Option A), or whether they accept what has been left to them under the deceased’s Will (Option B).Conversely, if your partner dies first, it means you (or your children) can claim half of your partner’s estate.What we often see happening in cases of a twilight relationship are unintended consequences – for example, separated parents have previously-agreed plans to provide for their children after they’re gone, but those wishes go out the door, without the right legal tools to support them, if one or both enter a new relationship.We cannot draft Wills to prevent this, and it won’t be effective to set up a Trust now and put all your assets in it, if you’re already in a complying relationship. This, generally, leaves only one option to circumvent this risk: for you and your new partner to sign a “Contracting Out Agreement”, where, as mentioned, you contract out of the automatic provisions of the Property (Relationships) Act, which usually calls for assets to be divided 50:50.You’ll both need to enlist the help of independent family or relationship property lawyers, make a list of all assets each of you own (together and separately) and then agree upon what is “separate property” – which wouldn’t be included in the division of assets – and “relationship property” – which would be included.The lawyers will then draft up an agreement, advise you of its effects, and, if you want to proceed, witness your signatures on the document.After that, all property identified as separate in that agreement – be it the likes of inheritances from parents, entitlements to Trusts, money earned or saved before the relationship began, vehicles owned – will be ringfenced in the event of a split. Assets that were transferred into a Trust prior to the start of the new relationship should also be treated as separate and not considered relationship property.Don’t guess, checkMy colleague, Gillian Stuart, has written a great piece on de facto relationships, and some of the common, and risky, misconceptions that can cause all sorts of problems – and huge losses – if there’s a break-up. She also outlines why “having the talk” and confirming the status of your relationship as early on as possible is vital.The laws around asset division after a split or one of you dies apply just the same to a couple in their 20s, as they do to those in their 70s. Many people finding a new love in their more mature years have assets – sometimes substantial – and can bring all sorts of family make-ups, obligations and dynamics to the relationship. It’s really important you not only have the correct legal tools in place for your situation – Wills, Trusts, Enduring Powers of Attorney and Contracting Out Agreements – but that you also have these documents properly reviewed in concert. To be effective, they must be current, relevant and line up with each other, and not have any gaps or loopholes that could crack open the protection you thought you had.Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected]: 03 443 0900W: www.aspiringlaw.co.nzDanielle Ward is a Solicitor at Aspiring Law, and specialises in Elder Law and Life Planning, including Wills, Trusts and Enduring Powers of Attorney.Please remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue.

It might be more than 40 years old, but recent research reveals a concerning lack of understanding still prevails around who gets what under the Property (Relationships) Act 1976 in the event of a break-up or one partner dying.More than half of participants didn’t realise that the general rule is an equal division of relationship property for all couples who have been together three years or longer.Of significant concern, also, was researchers’ discovery that there were couples relying on informal, DIY agreements in a bid to “opt out” of equal sharing. Right idea, terrible execution. They had failed to seek independent legal advice and have their arrangements certified by their respective lawyers, rendering their agreements legally useless from the start.     The University of Otago research on public views of relationship property law came out just prior to the Law Commission releasing its review of the Act late last year, a review which recommended relatively significant changes to how, in this modern era, assets should be divided after a separation or death. Feedback was sought, and the Commission expects to have its final report to Government this year. In the meantime, though, couples need to remain abreast of the law as it stands – and continues to evolve. Informed, timely decisions, together with robust legal tools, remain the best insurance policy against a potentially costly, stressful and acrimonious battle if the relationship ends. (Remembering, too, the Property (Relationships) Act also applies in cases where one partner/spouse dies, and there is a claim from others over the estate.)The University of Otago’s research findings around the lack of awareness of the equal-sharing principle mirror my own observations. But what I also see among those who do, in fact, know the 50-50 default for relationship property  , is that they’re not aware that it’s not absolute, and that the law does provide for exceptions – for example where there is economic disparity at the end of the relationship, or the relationship was “of short duration” (typically less than three years). Section 13 allows for other extraordinary circumstances that would also make the typical equal distribution particularly unfair.While, under the current legislation, the benchmark for anything other than a 50-50 split has been previously relatively lofty, lately we’ve seen important decisions coming out of the courts where judges are ordering one party get more than another under Section 13, on the grounds that an equal division would be “repugnant to justice”.Key casesLast year, the High Court upheld a Family Court decision for uneven distribution in Kidd v Russell. The parties had been in a relationship which lasted five years and 10 months. Ms Russell went into the relationship owning a home, which had been bought with the settlement proceeds from her first marriage. She had a low income and her new partner, Mr Kidd, was living in her home rent free. Three years into the relationship she got a mortgage to undertake renovations on the property, and relied on Mr Kidd’s income to secure the finance, which covered the purchase of vehicles, as well. The couple didn’t acquire any relationship property during the relationship, and Mr Kidd had brought no significant assets into the relationship, although he did help with the renovations and improvements to the home. By the time it went to court, the house had been sold, so the issue was how to split the proceeds. Weighing up the combination of key factors, the High Court agreed with the Family Court’s assessment that the circumstances were extraordinary, and an equal division would be repugnant to justice. Ms Russell was awarded 70 percent of the relationship property, while Mr Kidd’s 30 percent was awarded to him on the basis of his contributions to the renovations and also recognised the increase in the property’s value due to market forces. Bowden v Bowden is another particularly interesting case. The husband had brought all of the assets into the relationship – which lasted only three years and two months before his death – and paid for the majority of the outgoings. No assets were acquired jointly during the relationship. His family lodged a section 13 application against his estate, which the court found in favour of, awarding an 80-20 split. The fact the wife had cared for the husband at the very end of his life and had previously given up a state house tenancy was not enough to counter the claim.Review and clarity welcomedIt’s not surprising that four decades after its inception that the current legislation needs an overhaul. Society has transformed markedly. But even under this current legislation, people need to be aware its interpretation continues to change over time, which can mean markedly different outcomes.And, while the above cases provide us something of a guide, each situation will always be fact-specific. Just because the court decides one way in one case, by no means guarantees a similar outcome for another. Looking further out, the Law Commission’s report has given us a steer on what relationship property law could look like in the future.One key area is the family home. Under the current law, in a marriage, civil union or de facto relationship of more than three years, the family home is, with few exceptions, automatically considered to be relationship property and subject to equal sharing. Under the recommendations, however, the family home will not necessarily be divided 50-50, particularly if one partner owned the property before the start of the relationship, and only the increase in the value would be split equally. Another significant proposal is around addressing economic disparity. The Law Commission’s recommended for relationships of 10 years or longer, or where there are children, that both parties’ incomes be pooled and divided through a family income-sharing agreement for a period post separation. So, what to do?Despite the uncertainty that comes with impending legislative change, and ground-breaking court decisions, people can’t just put asset protection on the backburner. It’s hard to imagine a time relationship property law won’t exist of shifting sands. And, regardless of the legislation and the courts’ philosophies of the time, the fact remains pursuing litigation should always be an absolute last resort. It tends to be stressful, protracted, risky and costly. When it comes to protecting your interests in relationship property matters, all roads really do lead to a Contracting Out Agreement – ensuring, of course, it is properly drafted, both parties have sought independent legal advice and any agreement is certified by the lawyers.These agreements are typically relatively quick and inexpensive to have drawn up – and certainly a drop in the ocean compared to court action. As soon as you enter into a relationship, you can set out what you consider fair and reasonable, updating provisions as the union grows, where necessary. With legislative change in the wind and the courts drawing an increasingly fine line between what’s an ordinary circumstance requiring an equal division and an extraordinary one justifying a greater share for one party, save yourself time, money and stress: decide what’s right for you ahead of time with a robust Contracting Out Agreement.Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected]. T: 03 443 0900W: www.aspiringlaw.co.nzGillian Stuart is Aspiring Law’s Family Law specialist.Please remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue.

You have probably heard the expression “Buyer Beware” when it comes to buying a property, but if you are selling a property, you should realise that you are under the standard sale and purchase agreement published by the Auckland District Law Society/New Zealand Real Estate Institute, which is the most widely used document in New Zealand, the vendor does give some warranties to a buyer. A warranty is a promise by the seller of a property to the purchaser that certain facts are true or will happen. If they are not true, then the buyer can make a claim against the seller for any loss suffered by the buyer. The warranties given by the seller of the property are contained in the small print of the standard agreement, so it is important that if you are selling a property you read the warranties contained in the fine print to make sure you are able to give them. If the warranties are not correct, you need to delete some or all of them or change the wording. In summary, the warranties include the following;If the property has a building on it, the seller does not have to mark out the boundaries of the property, but if bare land is being sold, then the seller must make sure the survey pegs are in place marking out the boundary as at the settlement date. That the seller has not received any notice from the local council or the government or any other statutory body, or from the tenant of the property, or under the Resource Management Act 1991, or from any other person which directly or indirectly affects the property, and which the buyer has not been told about. That the seller has not given any consent or waiver which may directly or indirectly affect the property. For example, the seller may have signed a consent for a neighbour to build on the property and where the building infringes the rules in the District Plan in some way. That any chattels, plant, equipment, systems or devices which are included in the sale and which provide services or amenities to the property (e.g. security, heating, air conditioning systems) will be in reasonable working order on settlement, and otherwise in the same state of repair as at the date that the agreement is signed (fair wear and tear excepted). All electrical or other installations on the property will be free of any charge (for example, not subject to finance).On the settlement, there will be no arrears of rates, water rates or other charges. If the seller has done any works on the property, or arranged for anyone else to carry out works on the property, then all necessary permits and consents have been obtained, and to the seller’s knowledge the works were completed in compliance with those permits and consents, and a code compliance certificate was issued for that building work, if required. A code compliance certificate is a certificate from council confirming that any work authorised by a building consent has been satisfactorily completed in accordance with the terms of the building consent. Please note that just because a code compliance certificate has issued, it does not mean that a seller does not have any other liability under this warranty. The seller is warrantying that any building work completed in accordance with a building permit or a building consent, shall even if a council issues a code compliance certificate, and there is a problem with the building work, the seller can still be liable for faulty work. The time period during which a person can be sued for a breach of warranty is 10 years from the date the warranty is given, not 10 years from the date the work was completed. If the seller receives any notice after signing the agreement, the seller must give a copy of that notice to the buyer. The seller owns any chattels included in the sale. If you are selling a property, you should make sure any chattels listed in the sale agreement are in good working order. If they are not, you should not include them, or you should change the warranty to make it clear that they are not. If you are buying, you should check before you enter the agreement that the chattels are in good condition and record what the state of repair is, as you may not remember when it comes to settlement. If the property being sold is a unit in a unit title development (e.g. an apartment), the seller warrants that it is not aware of any claims made against the body corporate, and no special resolutions have been passed affecting the common property. If a crosslease property or unit is being sold, there will be no structures built which have not been authorised by the appropriate bodies or people. If you are not sure about whether any of the warranties which are contained in the agreement can safely be given, then you need to take appropriate steps to check, for example, you could check council records to make sure that all necessary code compliance certificates have been issued for building work which you have carried out. If you are buying a property, you should also read the warranties being given by the seller to see whether you can make a claim. A prospective purchaser should carefully inspect the property before settlement to make sure that all chattels included in the sale are of an acceptable standard and any issues are dealt with at that time. The warranty about work done to the property will not extend to work done on a property by a previous owner. A buyer should therefore carry out their own investigations rather than relying on the warranties contained in the agreement. Extra care should be taken if a property is a crosslease or unit title, as there may be additional requirements for any work carried out on these types of properties. ConclusionThe fine print of any agreement needs to be carefully considered and understood by all parties to the transaction. The implications or consequences of giving warranties that are not correct can be significant. If there are warranties that you cannot truthfully give, amendments to the warranties will be needed before signing the agreement. Consulting a lawyer from the outset is highly recommended. Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected]: 03 443 0900W: www.aspiringlaw.co.nzMike Toepfer is a Director of Aspiring Law.Please remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue.

Love ‘em or loathe ‘em, the Government recently confirmed 90-day employment trials are here to stay, albeit now only for businesses with fewer than 20 employees – which accounts for the vast majority of ventures in our area.While the provisions of the 90-day trial have ebbed and flowed over the years with the changing Governments, it remains a significant employment tool for businesses. Used ethically, lawfully, and underpinned by genuine good faith, a 90-day trial can serve its purpose extremely well, giving employers the opportunity to “road test” a new hire, check their suitability for the role, and, importantly, their fit within the company culture. Proponents say 90-day trials offer a “win-win”, giving employees the chance to score a job, a chance they mightn’t have otherwise been offered had an employer had to take them on untried, with the threat of a personal grievance if things didn’t work out. Used poorly, however, 90-day trials can be an absolute disaster – for both parties. It concerns me some employers aren’t bringing themselves up to speed with the requirements around conducting a trial properly. Some owners and managers hear that a 90-day trial allows them to hire an employee and terminate their employment within that period without having to justify it, and assume it’s as simple as that. It’s not. A 90-day trial is not some loose, casual arrangement. It must still be properly documented, and the prescriptive rules followed. Fail to do so, and, as an employer, you can find yourself deep in legal hot water, and very much out of pocket.The fundamentalsA 90-day trial is allowed under the Employment Relations Act 2000, but, remember, comes with strict provisos, including: The employer must be a small-to-medium sized employer – meaning an employer who employs fewer than 20 employees at the time which the agreement is entered into.The provision must be stated in the agreement.It must be for a specified period of no more than 90 days, starting at the beginning of the employee’s employment.The agreement must be signed by the parties.There are several other very important aspects of the trial period that are covered by the fundamentals of the employee relationship and that have been interpreted by the Courts, including:For the trial period to be valid, it must be agreed upon prior to the employee starting work.A previous employee who is re-employed cannot be subject to another trial period. The trial period must be agreed in good faith.Like most employment agreement terms, the trial period is negotiable. An employee doesn’t have to agree, or the parties may negotiate a shorter duration. Despite how critical it is to include the trial period’s terms in the agreement and ensure that it’s signed before the employee starts work, employers commonly overlook these vital steps … and walk right into personal grievance territory.  Take this common scenario. If an employee receives an offer or an agreement on Friday, starts work on Monday and then signs the agreement on Wednesday, even if the trial period is in the agreement, it’s not valid. In this situation, the employment relationship has commenced, and the employer can only dismiss the employee, like any other worker, on the grounds of performance, redundancy or misconduct – and not without following a fair and reasonable process, ensuring, of course, that they are acting in good faith.Trial time up?In practice, what does a valid, mutually-agreed 90-day trial period actually provide for?The employer may terminate the employee’s employment during the trial period without giving a reason.The employee cannot raise a personal grievance against the employer for being unfairly dismissed.However, the employee is still entitled to the same other minimum rights as all other employees. If the employer decides to terminate the employee during the trial period, they still must provide the notice agreed upon in the employment agreement. This applies even if it’s the last day of the trial. So, the employee must be allowed to work out the notice period or be paid out by the employer not to work.Other minimum entitlementsAn employee on a trial period is still entitled to all other minimum requirements in relation to health and safety, minimum wages, holiday pay, annual, as well as other forms of, leave. Again, remember, the employee must also be treated in good faith, and in the same way as other employees who are not on trial periods. Other personal grievancesEven though an employee cannot raise a personal grievance for being dismissed under the 90-day trial, the employee remains entitled to lay a claim against, among other things, being treated unfairly, harassment, discrimination and unjustifiable disadvantage; starting working before an agreement is signed; and, the lack of a trial period in the agreement.NoticeIf an employer decides to dismiss the employee during the trial, they must provide notice, as stipulated in the employment agreement, before the agreed period is up. So, say if there’s a 90-day trial period and a two-week notice period, an employer may give notice to the employee on the 89th day, but the employee’s last day will not be for another two weeks (unless the employer opts to pay out the worker instead).If the employer doesn’t give notice at the end of the trial, then the employee is no longer on a trial period and continues to be an employee. Some cases in pointIt’s amazing what a difference a handful of minutes can make. A worker on a trial period was told by his prospective employer on December 23 that he had the job, was sent his employment agreement and told to show up at 8am on January 18. He duly arrived that day around 7:45am, was introduced to staff and then taken back to the office to sign the agreement. Records show that he then clocked into work at 8:02am. The Employment Relations Authority determined that the employer had complied with the Act and that the worker had a trial period. However, if the man had started working prior to signing the agreement, the outcome would likely have been very different.Another situation involved a bakery worker. After a power cut, the employee was told to go home. When the power came back on the employer requested the employee return to work. The employee replied they were unable to return, to which the boss responded: “Bring your uniform back tomorrow; today is your last day, thanks”. The employer claimed to dismiss the baker under the 90-day trial clause. However, despite four weeks on the job, the baker still hadn’t actually signed an employment agreement. Therefore, the trial clause didn’t apply, and the employee was awarded $5000. In a nutshell …The 90-day trial period is available only to small-to-medium sized businesses with fewer than 20 employees. If an employer intends to rely on the provision, it must be included in the employment agreement, and that agreement must be signed by both parties prior to the worker starting. While, the 90-day trial does allow employers the added comfort of knowing that, if the employee doesn’t live up to their glowing references, that they may dismissed, employers still need to act with care – both legally and morally.In any event, every employment relationship is unique, and, if you’re planning to “swipe right” at any time, it pays to take legal advice first.Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected]: 03 443 0900W: www.aspiringlaw.co.nzJohn Mezger specialises in business, employment and immigration law at Aspiring Law.Please remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue.

The Queenstown Lakes District Council announced changes to short-term visitor accommodation rules, covering the likes of Airbnb, for certain zones earlier this year – but that didn’t cover all properties.Further areas are due to be looked at later this year, as part of “Stage 3” of the District Plan review.In our last article, we looked at the outcome of the Council’s “Stage 2” review of its District Plan in relation to short-term visitor accommodation rules, which included: residential zones (low and medium density), high-density residential and business mixed-use zones and rural zones.The “Stage 3” review will encompass:Township zonesGorge Road high-density residential zone Business mixed-use zones Industrial zonesRural visitor zonesBallantyne Road mixed-use zoneThree ParksA common question I’m fielding from property owners who rent out their properties on platforms like Airbnb and Bookabach in the zones that are yet to be reviewed is: “What rules should I be following?” The answer: The “old” short-term visitor accommodation rules will apply until the new ones are formally approved under the Council’s “Stage 3” District Plan review.From what I’m seeing, the staggered reviews have added an extra layer of confusion for property owners trying to navigate what, if any, consent they need to be compliant.If you own a property in one of the “Stage 3” zones, it’s really worth seeking advice as to whether it could be to your advantage to obtain a resource consent under the “old” rules, while you still can – especially if you think it’s likely the new regime is going to be less flexible than the current one. (Remember: as long as the scale and nature of your short-term visitor accommodation operation stays the same, and notwithstanding any other developments, a resource consent granted before any rule changes will endure.)Silver liningsWhat started for many as a way to earn a few extra bucks every now and then letting out a spare room, is now big business. Recent research estimates Kiwis pocketed more than $500m from the likes of Airbnb last year. Part of the reality of that has been councils dealing with the regulatory side and the pressures such sudden growth brings. Owners are also having to familiarise themselves with the compliance and business aspects, including the potential ramifications of a “bed tax”, which looks likely to be introduced in the not-too-distant future. While that takes effort and money, savvy operators know it’s worth committing the time to research and seek timely advice. Sorting out and shoring up resource consent might seem like an expensive pain in the proverbial, but for many it will be an investment. Many short-term visitor accommodation operators don’t realise that the resource consents run with the land, meaning that, if you obtain one for your property, come sale time, that benefit will pass on to the buyers. So, bear in mind, if you’re selling your property, and you’ve secured a resource consent, that likely has value and should probably be reflected in the sale price. From a prospective buyer’s perspective, it’s worth querying whether a property is consented as part of pre-sale due diligence. It might even pay, where there isn’t a consent, requesting the vendor secures one before the sale’s finalised.A final reminder, especially as we see more and more people adding to their property portfolio specifically targeting the short-term visitor market: not all areas have the same rules. For example, if you already have a property in the Central Otago District Council area, and then go and buy another in the Queenstown Lakes District Council patch, they might not be treated the same under the respective District Plan rules. If you’re already involved in providing accommodation on Airbnb or similar platforms, or are considering it, and you’re not sure of the implications of District Plan rules (or the other must-know regulations and considerations, for that matter), a little bit of legal advice will likely go a long way.Given the amount of change at play, the variables and also the fact that there are pretty drastic consequences for getting it wrong, I recommend you book a time with a property lawyer, who specialises in short-term visitor accommodation, bank, insurer and accountant to work through your specific situation and ensure you’re taking the correct steps and precautions at the right time.Feedback, comments and questions are always welcomed – please feel free to e-mail me on [email protected]: 03 443 0900W: www.aspiringlaw.co.nzSarah Ogilvie is an Associate and Property Law specialist at Aspiring Law. Please remember, this information is designed as a general guide, and should not replace specific legal advice on a particular issue.