Winter Newsletter 2021

AVIVA Seminar on Family Violence Reforms

JANICE COWDY / Director, Sales and Property Management

In recognition of the difficulties tenants experiencing family violence face in relation to their living situation, the government has amended legislation to allow victims of family violence to give two days’ notice to withdraw from a tenancy.

As a proud supporter of Aviva, Cowdy was pleased to hold a seminar in June featuring Aviva and Real iQ to inform landlords about the Residential Tenancies Amendment Act family violence reforms. Thank you to the large number of people who attended the event, from which all entry fees were donated to Aviva.

The seminar included information and guidance from Aviva representatives Luan and Trish around family violence and abuse, some of the signs, and how to support tenants who disclose family violence. David Faulkner from Real iQ also covered the changes to the law and the rights and responsibilities of landlords and property managers.

In summary, the legislation amendments are:

Victims of family violence can give two days’ notice to withdraw from a tenancy
Tenants can still withdraw from the tenancy even if the violence didn’t occur at the property and/or the violent party is not living with them (for example if a tenant has received threats of violence by someone who knows where they live)
If no other tenants are on the tenancy agreement, the tenancy terminates
Where there are multiple tenants on the tenancy agreement, the tenancy will continue with the withdrawing tenant removed from the agreement
If there are remaining tenants who can’t make rent payments without the prior tenant and can prove their financial hardship would be greater than the landlord’s hardship, the tenancy may terminate
The withdrawing tenant’s liability will end but they will still be responsible for anything prior to their withdrawal
Any remaining tenants are eligible for a two-week rent reduction which is calculated proportionately (for example, if you have four tenants and one has left, the remaining tenants should have one quarter of their total rent deducted)
It is illegal to disclose any part of their withdrawal or any qualifying evidence other than under specific circumstances
Landlords have the right to ask for evidence.

While landlords do have the right to ask your tenant for evidence of family violence, Aviva and Real iQ recommend not doing this. You must be mindful that these situations are highly sensitive and should be dealt with compassionately. If, however, you feel you need to ask for evidence, it is suggested that you do not give any criteria for what qualifies and that you accept your tenant’s evidence as it is presented.

There are a lot of preconceived notions within our society as to what constitutes violence. The evidence presented to you may seem innocuous or may not match your expectation of what violence is, but could be part of a wider pattern that is hard to recognise without proper training.

Any remaining tenants are eligible for a reduction in rent for two weeks. This reduction is proportionate to the number of tenants who have left due to family violence. For example, if you have four tenants and one has left, the remaining tenants should have one quarter of their total rent deducted.

It is illegal to disclose any part of the withdrawal or any qualifying evidence unless:

You are given consent to do so by the tenant
It is for the purpose of seeking legal advice
It is in connection with any legal proceedings to settle a dispute between you and the tenant or guarantor in relation to the tenancy
You are required to share the information by rule of law

As the landlord, you have the right to ask your tenant for evidence of family violence, but Aviva and Real iQ recommend not doing this. You must be mindful that these situations are highly sensitive and should be dealt with compassionately. If, however, you feel you need to ask for evidence, it is suggested that you do not give any criteria for what qualifies and that you accept your tenant’s evidence as it is presented.

Admitting you are experiencing or using violence is a highly difficult process. Violence is often hidden and unseen even to those closest to the person experiencing it, so it may be shocking to hear someone you never expected is going through it. However, by asking that person for evidence, you may unintentionally imply that you do not believe them, which could prevent them from following through with their request or from coming forward in the future.

Aviva also highlighted the need to remember that those living with violence are often living under another person’s strict control and may not have evidence to give. Furthermore, violent behaviours often escalate when a person decides to leave. Asking your tenant to collect evidence could put them at further risk if the person using violence against them finds it.

If a tenant is planning to leave a violent situation and approaches you about withdrawing from their tenancy, this could be a very high-risk time for them. You can encourage them to contact a support service like Aviva on 0800 AVIVA NOW (0800 28482 669).

Although there are privacy requirements around sharing information about your tenant’s withdrawal, you are still able to contact Aviva yourself for advice on how to better support tenants in general, or for advice on dealing with a violent tenant.

You can read more about what family and sexual violence is on Aviva’s website here.

The Bright-Line Test

On 23 March 2021, the Government passed its amendments to the residential property bright-line test under urgency and without consultation via a Supplementary Order Paper (SOP).

Previously, the bright-line period applied to anyone who sold a residential property within five years of acquiring it, unless it had an exemption.

The new bright-line test extends the period to 10 years for any existing property acquired on or after 27 March 2021. If an offer was made by a purchaser on or before 23 March 2021, provided the offer could not be revoked before 27 March 2021, then it will still fall under the five year bright-line test.

Properties which have been inherited or have been the owners’ main home for the entire duration of ownership, will continue to be exempt from all bright-line tests.

While the bright-line test for new builds will also continue to be five years, there will be consultation around what will qualify as a ‘new build’ and retrospective legislation is intended to be introduced. It is anticipated that a new build will include properties acquired within a year of receiving their code compliance certificate under the Building Act 2004.

What do these changes mean for you?

If you acquired a residential property on or after 27 March 2021, you will not pay tax under the bright-line test on any gain in value if you sell the property more than 10 years after acquiring it (or five years for a new build).

If you sell the property within 10 years of acquiring it (or five years for a new build), and it was your main home for the entire duration of your ownership, you will not pay tax under the bright-line test on any gain in value. If the property was your main home but was used for other purposes for longer than 12 months during your ownership, you must pay income tax on the profit from the gain in value of the property.

You will pay tax under the bright-line test on any gain in value if you sell the property within 10 years of acquiring it (or five years for a new build).

For further information on the bright-line test and to determine if a property you are buying or selling is taxable under any of the property rules, we recommend visiting the IRD website.

The Fight to Save Christchurch’s NG Building

For nearly a decade, the historic NG building in Madras Street, central Christchurch, has been the subject of a power struggle between its owners and the Crown.

The Crown wanted the land underneath the building for Christchurch’s new $473 million, while the property’s owners, Roland Logan and Sharon Ng, wanted the building saved.

The 115-year-old building survived the Canterbury earthquakes and is now the last building standing in the way of the new stadium.

In March this year, after another round of failed negotiations, the Crown resorted to emergency powers granted after the February 2011 earthquake to force a sale and take the building from Logan and Ng. The change of ownership was set for 4 May this year, but six days before the deadline, Logan and Ng went to court and won a reprieve. After an urgently convened hearing in Wellington, Justice Andru Isac ordered an interim injunction to stop the building’s legal title changing until the case went to trial. The judge said there was “sufficient merit” in Logan and Ng’s claims against the Crown, so it was necessary to “preserve their position pending trial”.

When Logan and Ng filed their injunction, more than 3,000 days had passed since the beginning of the saga back in July 2012. Plans for the city’s revitalisation were revealed publicly, showing a stadium that would be built across three city blocks. The NG building was among the properties that would need to be acquired.

A few weeks later, Logan and Ng received an encouraging update from Canterbury Earthquake Recovery Authority (Cera) boss, Roger Sutton. In a letter, Sutton said it may be feasible to incorporate the NG building into the design of the stadium.

When Cera was wound up in 2016, the responsibility for land acquisitions shifted to Land Information New Zealand (LINZ). In November 2016, LINZ was briefed on the situation with the eight unacquired properties on the land earmarked for the new stadium – including the NG building.

The briefing said at the end of 2014, negotiations with all properties had “effectively stalled” due to instructions from a unit within Cera to “stand down”. It noted that Cera had advised Logan a decision on the incorporation of the NG building would not be made until the design of the stadium was finalised, adding “this has not yet occurred”.

Despite the briefing, LINZ decided in February 2017 to restart the acquisition programme and sent letters to Logan and Ng, along with the owners of the other unacquired properties, outlining their intentions to buy their buildings by agreement.

In May 2017, LINZ sent a sale and purchase agreement to Logan and Ng to spark negotiations. The pair responded, outlining how the building “could and should” be incorporated into the stadium.

By the end of 2017, LINZ was prepared to resort to compulsory acquisition.

Logan says he was always open to negotiate with LINZ if it considered incorporating the building into the stadium, but the agency refused to entertain the notion.

The fate of the NG building was still up in the air in mid 2020, despite work on the stadium powering ahead. A tender was released for the design and build contract and a funding agreement was signed off with the government, along with a new city council company formed to manage and oversee the project.

That company, CMUA Project Delivery Ltd, had until the end of September 2020 to confirm if the NG building land was required for the stadium. On 11 September, backed up by two reports by stadium architects Populous, director and chair of CMUA Project Delivery Murray Strong wrote to LINZ unequivocally declaring that the NG building would be acquired. The property was needed “urgently” he said, and it was already having “negative impacts” on enabling works.

Logan and Ng have long maintained their building could be incorporated into the stadium development or shifted to a different part of the site. Officials say incorporating it would lead to a “sub-optimal” position for the stadium, while shifting it would not meet “practical and financial considerations”.

Finally, on 29 June, it was announced an out-of-court agreement had been reached. This agreement allows Ng and Logan to shift their building 200 metres north behind the Cardboard Cathedral within a year, despite this being deemed impractical by officials just a few months ago.

Logan says works are already in motion with deconstruction of the neighbouring property beginning next month, and they aim to move the building in May 2022. We look forward to seeing the iconic building in its new location next year.

Welcome to the Team

Welcome Dannielle Meekin, Georgie Mackay-Stewart and Miriam Davids to the Cowdy team. Having previously worked at Cowdy as a personal assistant to Sam and Nick Cowdy, we are thrilled to have Dannielle back, working in Commercial Leasing and Sales. Miriam and Georgie are new to the business and have joined our Property Management team.

Here is a little more about our new team members.

Commercial Sales & Leasing Consultant

Dannielle Meekin:

Position at Cowdy: Commercial Sales & Leasing Consultant.

How long have I lived in Christchurch: Christchurch has always been home.

Education: Bachelor of Arts in Theatre, Film and Art History.

Family: While a majority of my family live in the North Island, I have a tight-knit relationship with my parents who are also in Christchurch and my brother who is in Auckland. We get together whenever we can and are often catching up for dinner – we all like food!

Personal statement: Having worked at Cowdy Real Estate for 4.5 years as a personal assistant to Sam Cowdy & Nick Cowdy, I am excited to be returning after spending the last nine months developing my skills in sales. Joining Sam and the commercial team is an exciting new opportunity packed with knowledge & expertise that I feel privileged to be taking up. The brand and culture at Cowdy resonates with me and I look forward to helping my clients with their real estate ventures.

Previous jobs: Area Account Manager, Personal Assistant to Sam Cowdy & Nick Cowdy.

In my spare time: I enjoy catching up with friends, reading a good book or painting.

The charity I support the most: I Am Hope.

Favourite home cooked meal: Mum’s famous mac and cheese.

Favourite restaurant: Chiwahwah – you can’t beat the fried chicken & frozen margaritas!

Favourite holiday destination: Viña del Mar, Chile.

Favourite thing to do in Christchurch: Christchurch Farmers Market on a Saturday morning – get yourself some posh porridge!

Favourite book: Any good book by Mark Manson.

Favourite TV show: I’m a bit late to the party, but I am currently watching Scandal.

Property Manager

Georgie Mackay-Stewart:

Position at Cowdy: Property Manager

How long have I lived in Christchurch: I grew up in Rolleston and moved into town once I started studying. I now live in St. Albans.

Education: I studied at Lincoln University and completed a four year bachelor’s degree in Land and Property Management.

Personal statement: After finishing my degree, I could not think of a better company to start working for than Cowdy, where I get to work with a great team of people while further growing my passion for property management.

In my spare time: I play hockey for my local hockey club, Harewood. I also play for Canterbury and age group New Zealand teams.

Favourite home cooked meal: Any Thai food.

Favourite restaurant: Mexicanos.

Favourite holiday destination: Coromandel.

Favourite thing to do in Christchurch: Getting out and exploring our backyard! I love going on walks and tramps.

Property Manager

Miriam Davids:

Position at Cowdy: Property Manager.

How long have I lived in Christchurch: I’m new to the region – I’ve only recently relocated to Christchurch from Taranaki.

Family: I have no family in New Zealand, I live with my partner, Adam, and my kitty, Yogi, in Burnside.

Personal statement: I regard myself as a passionate achiever who thrives at being challenged to deliver nothing but excellent results. My experience in customer service, conflict resolutions, and excellent negotiations allowed me to steer my career into the Property Management industry. I am a motivated team player with a keen interest in building long lasting relationships with people from all walks of life.

Previous jobs: Property Manager in Taranaki. Prior to joining the Property Management industry, I was an Operations Manager in the Car Rental Industry.

In my spare time: I enjoy reading, yoga, and exploring new areas.

The charity I support the most: The SPCA.

Favourite restaurant: I am not too fussy – as long as there’s an awesome vibe!

Favourite holiday destination: Lake Taupo in the North Island.

Favourite thing to do in Christchurch: I have not explored enough to pick one, but if I had to choose, I would say exploring the markets and rock climbing.

Favourite book: The Alchemist by Paul Coelho.

Favourite TV show: The Americans.

What to know about Rateable Values

NICK COWDY / Residential Sales Consultant

Sometimes rateable values (RVs) are right, but often they’re very wrong.

Councils are required to value all properties for rates purposes, and this is called rateable value or capital value. These valuations are supposed to reflect the value of the property at the date of the valuation, but they don’t include unknown improvements to the property, nor do they include chattels – things like carpets, drapes and light fittings.

Valuations are split into two parts – the land value and the improvement value. This is a mass project carried out on every single property in Christchurch, meaning the valuation is only as accurate as the information the council has. Most properties are not actually inspected, therefore it becomes more of an educated guess.

From a buyer’s and seller’s perspective, it’s important to be aware that the council may not have all the information about a property. For example, a complete renovation of an entire property may have been carried out, but if the project didn’t require consent, council wouldn’t necessarily have been notified and the rateable value would not reflect the renovated property’s value.

On the other side of the coin, rateable values might not take into account a property’s state of disrepair or maintenance issues that are required. It also may not account for the ground conditions of the property.

As values have increased across the city since rateable values were last set in 2019, a majority of the time we expect to see properties selling above their RVs. New RVs are set to be struck in July 2023, the results of which will be very interesting to see.

All in all, RVs can be a great place to start, but they should not generally be considered to reflect market value. As always, we recommend you seek your own professional advice.

House Prices Continue Record-Breaking Streak

The average asking price for a house in New Zealand increased by 28.7% from $637,000 in June 2020 to $820,000 in June 2021, according to the latest data from the Real Estate Institute of New Zealand (REINZ).

The number of residential properties sold in June this year across New Zealand was the highest number of properties sold in June for five years, with 7,345 properties sold. Canterbury saw a 7.8% increase in sales volumes, jumping from 952 to 1,026, the highest June total in 15 years.

The REINZ House Price Index (HPI) for New Zealand, which measures the changing value of property in the market, increased 29.8% year-on-year to 3,844 – a new high on the index. This is the highest annual percentage increase in the HPI since records began and is the 13^th consecutive record-breaking month, showing the continued strength of the market.

The Canterbury region reached a median house price of $569,000 in June 2021, a year-on-year increase of 21.1%. Houses are also selling at their fastest pace (28 days) for a June month in five years. First home buyer activity has been less prevalent over the last couple of months while investor activity has eased slightly as government restrictions come into effect, but activity is still busier than this time last year.

Comparing the growth in house prices in New Zealand to other countries, we are running at the second-fastest rate in the world. The Knight Frank Global House Price Index shows in the first quarter of this year, house prices globally were up 7.3%. New Zealand hit 22.1%.

That was the fastest rate of increase recorded since the last months of 2006, reflecting the runaway market growth seen in many countries. In April this year, it was reported that the property market in New Zealand was one of the least affordable in the world, while the annual Demographia International Housing Affordability report ranked the market in Auckland the fourth least affordable in the world.

High Density Building Regulations Bill

A bill reforming regulations for apartments, townhouses and other types of high-density property looks set for an easy ride through Parliament.

Drawn up by former National MP Nikki Kaye and then-Housing spokesperson Judith Collins in 2018, the bill seeks to strengthen the governance of body corporates and clean up other unit title fishhooks.

It being positioned as one among many solutions to New Zealand’s housing crisis. It is meant to make buying units more attractive by updating regulations around unit titles.

The bill was drawn from the ballot in July last year when it was in the name of Judith Collins. It was later adopted by National MP Nicola Willis and backed by Labour at the first reading, allowing it to progress to select committee stage.

Currently the bill is working its way through select committee, where it has received broadly positive feedback from councils, the legal community and insurers. Some submitters, however, have been concerned the new rules would be costly and time-consuming to implement.

Big changes include greater disclosure about a building to prospective purchasers; financial records, general body corporate minutes and details of insurance cover. The bill would seek to improve the professionalism of body corporate managers and require them to be members of an industry organisation. It would also require the drawing up and funding of a long-term maintenance plan to avoid any nasty surprises for residents who buy into a building only to learn they are on the hook for expensive building work to replace things like lifts, or to bring the building up to code.

Poto Williams, the Associate Housing Minister, wrote to Willis in April asking whether the government could adopt the bill. The offer was rejected by Willis, telling Williams the adoption of the bill would be “of little or no benefit” as “it will not widen the scope of potential amendments, but would risk further delaying what is already an overdue piece of legislative reform”.

Willis said she wanted to continue working with Poto Williams in a “constructive way”. Williams’ office has accepted this offer and was hoping that any concerns the government has with the bill could be worked through at the select committee stage.

The offer to adopt the bill as a government bill would come with the benefit of putting government resources behind its drafting and give it more time to be debated in the House. Willis, however, was concerned that effectively resetting the legislative process for the bill would unravel the urgency that has built up around the reform.

“What I’ve heard loud and clear from people is they have waited too long for these changes,” Willis said.

While Willis said it was “fantastic news” that the government was keen to continue supporting the bill, she didn’t want to stall the legislative process any longer.

Mid-Century Modern Gem

At the end of the cul-de-sac on Newbridge Place, Ilam, is arguably the highest concentration of 1960s architectural houses in Canterbury. Here the Henderson House, designed by Minson, Henning-Hansen & Dines, enjoys the company of two highly celebrated Christchurch icons: the Fletcher House and the Messervey House, along with blocks of flats by Warren & Mahoney and another by Don Cowey.

The Henderson House had largely stayed out of the limelight until now. With few owners and little exposure to the public, most people would not be aware of it. Furthermore, houses designed by Minson, Henning-Hansen & Dines are hard to come by.

If you are not familiar with Minson, Henning-Hansen & Dines’ work, one of their most prominent buildings is the CoCA Gallery, formally the Canterbury Society of Arts (CSA). Another notable building was the Christchurch Transport Board building (The Heritage later) which was fell victim to the earthquakes and now reduced to a bare shingle carpark in Cathedral Square.

Back to the house at hand. As Newbridge Place was intended to be an architectural utopia for academics and university alumni, it seems only fitting that Professor A.E. Henderson commissioned the house. Minson, Henning-Hanson & Dines was a fine choice, bringing the experience of local vernacular with the authentic Scandinavian style of Holger Henning-Hansen.

What is incredible about the Henderson House is that there is no exterior façade that is unconsidered, showing the house to be attractive from every angle. Most of the house is almost hidden from sight, with only the driveway giving views of the hipped roof over the bedrooms and garage below.

A pond teases the onlooker to what is behind the block & shuttered timber walls by extending ever so slightly beyond the shutter, while the Ficus and other planting disguises the brutal material it covers.

Although the original fireplace has been removed, bi-folding doors take its place and allow the gabled building frontage to flood the interior with light, only interrupted by timber slatting that breaks up the façade, much as you would see in a contemporary building.

Inside there is an incredible amount of detail. I am confident in saying the Henderson House would be among the best detailed houses of the era still in existence today. The timber work on the ceilings is spectacular and I have no doubt the builder of the time would have been very proud of their work.

Sightlines throughout the house are very impressive and connect via the hallway to both living and bedroom areas of the house. Around every corner there is something to admire, with exquisite detail after detail.

For such a special property there is no surprise that we were able to attract significant interest. We were thrilled to have over 200 visitors, and in total there were 15 registered bidders on the day with a result that reflected the high level of interest.

During the marketing we were very happy to be contacted by the Henderson family and relations of the architects involved in the design. Furthermore, the quality of the imagery attracted interest from a leading lifestyle magazine which we hope to see published sometime soon in print, and on stuff.co.nz.

We can confidently say that the careful consideration of the marketing of this property could have only been achieved by Cowdy, the Christchurch architectural specialists.

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