You may have seen the term Portfolio Investment Entity or PIE used in the local newspapers and wondered what it was all about.  In this article we explain the reason for the provisions, and what they to do.

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Claiming Tax Credits on Donations to Charities supporting Overseas Causes

Many New Zealand based charities also support overseas causes – this is often a result of donations being “ear-marked” by donors as being for support of a particular overseas-based person or purpose.  Although these amounts usually make up a small percentage of the charity’s total spending, there appears to be some confusion as to the status of these donations.  Shedding light on this issue may help charities to increase the support base for persons they wish to support overseas.

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Is a GST Domestic Reverse Charge a Good Idea?

GST is a hazardous tax, not only for taxpayers, but also for the Government. Unlike income tax, the Government has a commitment to refunding GST, and this part of the GST mechanism leaves the tax open to manipulation. The hazard is greatest where the assets sold are largest.  The domestic reverse charge mechanism will to an extent reduce the risk the Government faces from being ripped off through the GST system.

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In the recent Court of Appeal decision Commissioner of Inland Revenue v Penny and Hooper [2010] NZCA 231 (4 June 2010) it was held that Mr Penny and Mr Hooper entered into a tax avoidance agreement when structuring their affairs in such a way as to avoid paying tax at 39% on the majority of their income.  The surgeons have now decided to appeal the case, but if not successful it will have significant implications for a broad sector of the New Zealand public. Read more

What are the transitional rules for the GST rate increase if I account for GST on a payments basis?

What are the transitional rules for moving to the 15% GST rate in New Zealand from 1 October 2010 if you account for GST on a payments basis? The transition rules applying to those on a payments basis are arguably the most complex part of the change to the GST rate. This article helps explain these specific aspects of the transitional rules.

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When purchasing a property, it pays to investigate the history of the buildings on the land. If there are no records of building consents having been issued by the council, then at best the buildings may have been constructed without council approval and may not comply with the building code. At worst, they may be dangerous for use and occupation.

Background To The Building Consent Process

The Building Act 2004 (“the Act”) governs all building works in New Zealand. It states that such work must comply with the building code. The code is made up of regulations which prescribe the functional requirements for buildings and the performance criteria they must meet for their intended use.

Before undertaking building work, the owner of the property must obtain approval from a building consent authority. Usually, the building consent authority is the local council. Council approval for building work is known as a “building consent”.

During construction and once construction is complete, the council will inspect the work to ensure compliance with the conditions of the building consent and the building code. If the council approves the work, then it issues a code compliance certificate. It is an offence to carry out any work requiring a building consent if the work is not in accordance with the terms of the building consent. Also, subject to some exceptions, until such time as a code compliance certificate has been issued, it is an offence to occupy the building.

What Happens When Building Work Has Been Done Without A Building Consent?

Building consents cannot be issued retrospectively. However, if the work has been completed and a building consent was required but not obtained, then an application to the council for a “certificate of acceptance” may be made. This involves the council inspecting the work to determine if it complies with the building code. If it does, then it may issue a certificate of acceptance. However, such a certificate cannot be issued if the building work was carried out prior to 1992 as the building code was not in existence prior to that date.

It is not uncommon to come across properties where the buildings on the land have been constructed with a building permit or consent but the work has either never been completed, or if it has, the council has not approved it. If the work was carried out prior to 1 January 1993 and provided that the building is not “dangerous” or “unsanitary” as defined in the Act, then the council cannot take any action to require the owner to complete the work in accordance with the original building permit.

Make Sure Your Contract is Conditional on Approval of a LIM Report

The best way to check that there are no unauthorised buildings on a property is to obtain a Land Information Memorandum (known as a “LIM report”) before you buy it. This includes a summary of all records held by the council in relation to the property including details of building permits, consents, code compliance certificates and certificates of acceptance. To protect your position, any sale and purchase agreement you sign should be subject to approval of a LIM report for the property.

It is worth remembering that although the absence of permits or consents may not pose a problem while you live in the property, it may well become a problem once you decide to sell it. For that reason, a LIM report is money well spent. It could save you a great deal more at a later date.

The information contained in this outline is of a general nature, should only be used as a guide and does not amount to legal advice. It should not be used or relied upon as a substitute for detailed advice or as a basis for formulating decisions. Special considerations apply to individual fact situations. Before acting, clients should consult their Parry Field Lawyer.

Most of us are used to living in an environment where there is a certain amount of noise. However, there are also times when noise can become excessive and interfere with the peace, comfort and convenience of other people.

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New Zealand’s Building Act 2004 (“Act”) impacts on vendors selling properties on which building work has been undertaken. Purchasers now often request evidence of compliance with the Act.  Parry Field Lawyers provide legal advice on a range of property matters including buying and selling property.

 

Building Code

One of the fundamental principles of the Act is that all building works must comply with the building code.  Compliance with the building code is mandatory regardless of whether or not a building consent is required for the work.  Even for minor building projects, householders need to check whether or not the building code is relevant and if it is, must ensure that the building work complies with the requirements of the code.

Evidence of Compliance

The most common way a building owner may provide evidence that work complies with the building code is by obtaining and being able to provide the purchaser with a Code Compliance Certificate (“CCC”). A CCC is issued where a building consent is applied for before building work is commenced. The CCC effectively provides that the consent authority is satisfied on reasonable grounds that the building work complies with the building consent. It is the building consent that is crucial in ensuring that the performance standards set out in the building code are met by the finished building product.

A building consent will lapse if work does not commence within 12 months of the date of issue. However, it appears that commencement of work within the first 12 months after the building consent is issued preserves the consent indefinitely.

Certificate of Acceptance

Sometimes a purchaser will ascertain that building work for which a building consent and CCC should have been issued, has not been completed in accordance with those requirements. The Act provides that in that situation a building consent authority can issue a certificate of acceptance.

A certificate of acceptance certifies, to the best of the building consent authority’s knowledge and on reasonable grounds, that, as far as it could ascertain, the building work complies with the building code.

Obviously this certificate conveys a far lower degree of quality assurance than a building consent or CCC. It replaces what was previously referred to as a “safe and sanitary” letter which followed an inspection by the Council certifying to the effect that the building was deemed to be neither unsafe nor unsanitary.

Building Warrant of Fitness

Another matter which may require consideration when purchasing a commercial building is whether or not a building warrant of fitness is required and is up to date. If a building contains systems or services that require ongoing maintenance in order to function at the level demanded by the building code, a compliance schedule must be established in regard to those systems to ensure that maintenance is routinely carried out. The compliance schedule sets out the inspection, maintenance and reporting procedures required to ensure that those systems meet performance standards. The building warrant of fitness confirms that the inspection, maintenance and reporting procedures set out in the schedule have been complied with for the foregoing 12 months. Accordingly, building owners bear responsibility for engaging an independent qualified person (IQP) to carry out an inspection and must display a copy of the building warrant of fitness in a public area of the respective building.  There are significant fines for a building owner who fails to obtain a compliance schedule or to display a current building warrant of fitness.

 

 

The information contained in this outline is of a general nature, should only be used as a guide and does not amount to legal advice. It should not be used or relied upon as a substitute for detailed advice or as a basis for formulating decisions. Special considerations apply to individual fact situations. Before acting, clients should consult their Parry Field Lawyer.

If you have any concerns that you may have a leaky home, it’s important that you act quickly to investigate your concerns.  Parry Field Lawyers provide legal advice on a range of property matters including leaky home claims.

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Shading from trees can be a common source of tension between neighbours.  Have you ever purchased a property and later discovered that your neighbour’s trees will eventually block your view or prevent your property from having the benefit of sunlight? Parry Field Lawyers provide legal advice on a range of property matters including disputes with neighbours.

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Christchurch CBD

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Christchurch 8013, New Zealand

POSTAL ADDRESS:
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PHONE: +64 3 348 8480

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Christchurch 8041, New Zealand

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Rolleston

PHONE: +64 3 348 8480

PHYSICAL ADDRESS:
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Rolleston, 7614, New Zealand

POSTAL ADDRESS:
PO Box 8020, Riccarton,
Christchurch, 8440, New Zealand

Hokitika

PHONE: +64 3 755 8673

PHYSICAL ADDRESS:
127 – 137 Revell Street,
Hokitika 7810, New Zealand

POSTAL ADDRESS:
PO Box 44,
Hokitika 7842, New Zealand

Auckland

PHONE: +64 9 930 4340

PHYSICAL ADDRESS:
Level 7, 50 Albert Street
Auckland, 1010

POSTAL ADDRESS:
PO Box 8020, Riccarton,
Christchurch, 8440, New Zealand

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