December 2020 - Ucol-shareholders

Toiora Cohousing Agreement for review
by Warren Hurley 16 Dec '20

16 Dec '20

Hi Everyone Here's our Cohousing Agreement in its current form plus a page of explanatory notes. We've got more than a month to read & digest this. See you all on Saturday 30 January to take this another step forward. Happy Holidays ! Warren

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bnz
by Roz Wilson 16 Dec '20

16 Dec '20

Subject to our getting a valuation and proving income bnz have approved our mortgage. I asked if anyone else could contact the lady who has helped us and this is her reply plus contact details. And only took a very short time. regds roz If any of the other people are seeking to approach BNZ they could do that by making contact with me or via the contact team on 0800 275 269 Kind regards, Lisa Densie Banker Partnership Banking TEL: 0800 275 269 E: <mailto:Lisa_Densie@bnz.co.nz?Subject=> Lisa_Densie(a)bnz.co.nz

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Urban Cohousing Otepoti Limited....
by Miriam Frances 16 Dec '20

16 Dec '20

Morena Directors, Having read your email I am left confused and not placated. Maria's information exchange with Stephen Edge was verbatim. The imperative of Urban Cohousing Otepoti Limited shareholders is to achieve settlement. I am deeply concerned. Arohanui Miriam

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No Covenant required by our Resource Consent to be Cohousing
by Maria Callau 16 Dec '20

16 Dec '20

Hi all, 1. Lets be clear that WE ALL agree that we are building a cohousing community. 2. We have gone through our Resource Consent requirements (and our planner has confirmed over the phone) that there is NO requirement to have a covenant on the title. It is not written in our RC. The conditions are for our development to be a cohousing and we can choose how to ensure this is possible: it can be outlined on our Toiora agreement and/or our Body Corp. It DOES NOT need to be attached to the title. 3. Our unit title is almost ready to go to LINZ. The surveyors are doing this and they said that there is no need to add covenants or body corp to the documents going to LINZ. This is something that our UCol lawyers have to have ready for February. 4. Our lawyers have indicated that we are able to work on the final documents for February (review, reword, delete, etc.). This is good news as we still have this windows of opportunity to do this to meet our needs and requirements for the banks. 5. Most banks have indicated they will not approve our homeloan applications. Kiwibank has indicated that banks will not take our units as security for our mortgages because of the conditions in our Covenant and Body Corp. Stephen Edge (kiwibank) said that if we remove the Covenant and keep our internal Toiora Cohousing Agreement to ensure our cohousing operates as we want, the banks are likely to take our units as security. 6. From what I understand, our body corp rules can be reviewed every year and we can remove/delete/add things. So we can provide a simple, perhaps one page body corp rules with the minimum required to get started. We can then add 10 pages next year if we feel like. Note that we have 7 or 8 householders that need mortgages, adding to around NZ$2,300,000. We need approval from the banks before we can settle and return the UCOL loan to the bank, close UCOL company and become Toiora Cohousing Body Corp... If we don’t return the loan by March, all shareholders will have to put extra money every month to pay accumulated interest to the bank... My opinion: I believe that our intention of being a cohousing is stronger than a piece of paper. So let’s not loose our focus and let’s keep it simple. I support the idea of removing the Covenant & providing a simple outline for our body corp rules to start with. The Toiora Cohousing agreement will ensure that we are what we want to be. And we can add things to the body corp rules in the future. This will (hopefully) enable us to settle on time. Of course this needs further discussion but hope this helps to visualise a possible scenario... Thanks, Maria Maria Callau 0211847490 SUR Architecture Limited Sent from my iPad

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Email from Kiwibank related to Homeloans
by Maria Callau 16 Dec '20

16 Dec '20

Hi all, FYI This is the email I received from Kiwibank related to the home loans. Please note his comments are shown in CAPS. Also, other 2 previous emails shown below. Maria Callau 0211847490 SUR Architecture Limited Sent from my iPad Begin forwarded message: > Sent from my iPhone > > My comments in reply in CAPS below > > Cheers, Stephen > > -----Original Message----- > From: Maria Callau <maria(a)sur-architecture.com> > Sent: Tuesday, 15 December 2020 4:20 PM > To: Stephen Edge <Stephen.Edge(a)kiwibank.co.nz> > Subject: Re: Kiwibank > > Hi Stephen, > > Thank you for the update. I appreciate your input and time on this. > > I think we can all achieve the 70% loan to value ratio. OK NOTED > Happy to go with 3 units if this is what is on offer. OK NOTED - ARE THERE MORE THAN 3? HOW MANY IN TOTAL? > We'll wait to hear back from you for the business banking options. I'M LOOKING INTO THIS > > I also have a question: What if we are able to remove our covenant all together? FROM A LENDERS PERSPECTIVE THAT WOULD BE GOOD BUT WOULD ALSO NEED AMENDMENTS TO THE BODY CORPORATE RULES. IDEALLY THE GROUP SHAREHOLDER AGREEMENT SHOULD BE VOLUNTARY AND BE COMPLETELY SEPARATE FROM THE LAND DOCUMENTATION > I have been talking with our Planner (for our Resource Consent > Requirements) and with our lawyers and we are exploring this option. > Our Resource Consent does not require us to have a Covenant; it was our choice. > It looks like there are ways that we can be what we want to be without needing to have a covenant on the title... > If we do this, we would remove the 5% capital gain contribution. > > Is this something that would simplify things? SHORT ANSWER YES, IF THERE'S NO COVENANT AND STANDARD BC RULES ARE BEING USED > Would this avoid the need for a policy change? MY VIEW IS YES > > We haven't issued the titles yet so we are still on time. > As we are UCOL shareholders, we can work on this if necessary. > The unit title will go to LINZ in January so we can decide if a covenant is attached to it or not. > > I just need to understand if this path is worth exploring further. YES I THINK YOU SHOULD LOOK AT OPTIONS - IT SEEMS ALL THE BANKS HAVE ISSUES WITH PROVIDING PERSONAL HOUSING LOANS AND TO FUTURE PROOF THE OVERALL PROJECT WITH RE-SALES AND EASE OF FUNDING THERE MUST BE A BETTER WAY? > I will meet with our lawyers in the coming days and would appreciate your feedback. > > Thank you, > Maria > > > > > Kind Regards, > > Maria Callau > 0211847490 > > SUR Architecture Limited > www.sur-architecture.com > ————- Previous emails: Hi Maria, I have bullet pointed below a short summary to update you on individual housing loan progress to date: A policy change will be needed inside Retail Banking before individual housing loans can be progressed – this will require a lot of time (many months) I’m thinking a maximum loan-to-value ratio of 70% would be likely, but could even possibly be lower I’m thinking a maximum number of units within the development would also be likely, I’m picking 3 until there have been some re-sales and market awareness is tested My present fall-back position for people struggling to arrange finance would be to try and organise individual finance via the Business Banking side of the bank. I’m presently exploring options on how to achieve this Do you have any updates for me on how people are getting on? Cheers, Stephen Stephen Edge Senior Manager Property Finance DDI 07 571 3846 | M 027 8395 057 | F 07 571 3845 www.kiwibank.co.nz Kiwibank Limited, Level 1, 41 The Strand, P O Box 13333, Tauranga 3110 This email, including any attachments, is confidential. If you are not the intended recipient, any use, distribution or copying of this email or the information contained in it is prohibited. If you have received this email in error, please notify us immediately and delete it. Please consider the environment before printing this email. ——— Hi Maria, From what I can gather the major issues impacting Retail Banking policy include: The Covenant registered on the title (and Body Corporate rules) requires the bank to take this into when assessing security risk The 5% levy on re-sale is problematic because the bank cannot control/monitor this within our present systems The co-housing market is still new and untested from a re-sales point of view The bank has no present policy for personal lending on individual co-housing properties, i.e. valuation requirements, LVR levels, ability to identify this type of security in our systems From a lending point of view there would ideally be no land covenant and only standard BC rules (i.e. no reference to cohousing). The cohousing agreement would stand as a completely separate document and opting in to the group would be an option only. However I completely understand why the covenant is there, to preserve the integrity and sustainability of the community into the future. The problem we have is “the banks” aren’t geared up for it just yet. I’m waiting to hear back from someone in our credit department but nothing is going to happen quickly here. I will try and give you a call tomorrow. Cheers, Stephen Stephen Edge Senior Manager Property Finance DDI 07 571 3846 | M 027 8395 057 | F 07 571 3845 www.kiwibank.co.nz Kiwibank Limited, Level 1, 41 The Strand, P O Box 13333, Tauranga 3110

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Minutes UCOL meeting December 10 attached
by Donald Shand 15 Dec '20

15 Dec '20

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Draft Minutes for comment by Wednesday please.
by Donald Shand 13 Dec '20

13 Dec '20

Kia ora Toiora whanui Find attached draft minutes from last week for your consideration. Ka kite ano. Donald

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5% capital gain levy
by Rainer Beneke 12 Dec '20

12 Dec '20

Hi Susan and everyone After our discussion about the 5% capital gain levy on our title, and my suggestions of levying the improvement fund through monthly contributions, I set down and put it into the attached table. For the table below I have assumed a housing price increase of 10% per annum. This seemed too high for the Dunedin market 3 years ago, but recently we have had increases of far more than 10 % p.a.. You have to double the numbers in the table if you want 20% increase in property value or half it if its only 5%. I was startled to find that the total of annual contribution would be $65,000, compared to the provisional body corp fee as calculated by Min of $76,000 (see our most recent body corp rules). So Susan, I do understand your strong reservation to a monthly improvement contribution! As this Improvement Fund is only to be used to improve the common, and that indefinitely into the future as it is a covenant on the title, the common will be improved indefinitely. At an assumed annual 10% increase of property values, Toiora would have improved the common by the equivalent of $657,000 (or the cost of an Alva Street unit) within 10 years. This calculation is also valid for collecting the capital gains levy through sales as per our covenant on our title, though the money would come in big lump sums whenever someone sells on. The first 10 years will be easy to spend the money: finish the kitchen, the heritage fence, tunnel house, skylights to the dining room together with better insulation and lights, solar panels to Alva Street, solar panels to High Street, common electric car, 10 electric bikes, 2nd common electric car. Eventually, though, we will have to get golden taps for the guest bedrooms. On the other hand, no-one might sell and we have to wait longer to do any of the former listed improvements. At present we bought (and any new owner now will buy) a dwelling with the bonus of a good common ownership in cohousing. Through the indefinite 0.5% improvement per annum to the common, some time in the future people will buy into Toiora for their part of the common ownership with a nice dwelling attached. We might be changing from a ‘neighbourhood' into a ‘commune' (dare I say it, and I don’t mind commune, though I know lots don’t even like the word community). I’m sure that bankers, who are very used to calculating capital gain and creating wealth (often on fractions of percentage points), can see our scheme much clearer, than we ourself, and are wary of it. Don't misunderstand me, I am very much in favour of a common development fund. But I would like to see a setup whereby we can regulate the contribution per annum up or down, pending on need, and independent from relying on sales of units. This is in accordance with the act section 121 (b) as stated by Simon Milne in his most recent letter to us. The banks must be fine wit it. Happy thinking Rainer Please call me if you need an urgent reply. Rainer Beneke +64 21 144 7700 rainer.ucol(a)gmail.com

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FW: wilson application
by Roz Wilson 10 Dec '20

10 Dec '20

Thought people might be interested in the email we have had from Westpac. They have turned us down for a small mortgage and say kiwibank and asb are taking the same position. Regds roz From: Hayden Olsen <Hayden.Olsen(a)westpac.co.nz> Sent: Thursday, 10 December 2020 4:46 pm To: Roz Wilson <michael.rosemary(a)xtra.co.nz> Subject: RE: wilson application Hi Roz I was looking at this application subject to CT and any conditions/covenants/restrictions being suitable to us however in the meantime we have received a handful of applications from a mortgage broker in relation to lending against these properties and additional information was supplied to us and an opinion sought from our Senior Managers as to whether Westpac was willing to take these properties on as security for lending. Unfortunately the decision Westpac has made is that we are not willing to accept these properties at this stage as security for lending as the conditions that go alongside ownership make them a risk the Bank is not willing to take at this time. I would suggest the family members might be best to look at using their own equity to buy the investment property as likely to be cheaper for them to obtain against their existing properties. However if finance is still required I would suggest contacting a mortgage broker who would be able to explore other options, possibly with a second tier lender rather than a bank. Also, It is my understanding from what the mortgage broker has told us is that KiwiBank and ASB have the same stance as Westpac, SBS Bank, BNZ and ANZ are looking into it/wanting to know more information. Kind regards Hayden Hayden Olsen Mobile Mortgage Manager Mkt Segm & 3p Management Tel: + 64 3 425 9182 Mob: +64 27 586 8932 Email: <mailto:hayden.olsen@westpac.co.nz> hayden.olsen(a)westpac.co.nz Merry Christmas and Happy New Year I will be out of the office from close of business 24th December 2020 And I will be back in the office on Wednesday 20th January 2021 <http://www.westpac.co.nz/> Westpac New Zealand Limited 106 George Street, Dunedin, Otago 9016 <http://www.facebook.com/WestpacNZ> <http://twitter.com/WestpacNZ> <https://instagram.com/westpacnz/> <http://www.linkedin.com/company/289802> <http://www.youtube.com/WestpacNZ> Save a tree, don't print! Classification: PROTECTED From: Roz Wilson <michael.rosemary(a)xtra.co.nz <mailto:michael.rosemary@xtra.co.nz> > Sent: Wednesday, November 25, 2020 7:03 PM To: Hayden Olsen <Hayden.Olsen(a)westpac.co.nz <mailto:Hayden.Olsen@westpac.co.nz> > Subject: wilson application Hi hayden, did put notes on the forms but not a lot of room so story here. We are nearly ready to settle for the unit in town. We have a sale and purchase agreement for $446000 approx but that is two years old so market value would have gone up. we have already paid $180000 so, allowing for finishing etc, need another $290000 to settle. Our daughter and her husband are currently living overseas but wanted to be sure of having this place when we no longer want it. so we struck a deal. They would buy in for $290000 and we would be co owners of taieri mouth. This leaves us mortgage free and with the unit in town and 46% of the one at taieri mouth. Other family members want to buy an investment property but one not so keen on using his equity (the four of them have three houses). We offered to see if we could borrow enough for a deposit on an investment property using the unt equity. So that is what we are doing. Property not yet found, until we can work out if deposit comes from us or their equities. Thanks roz The contents of this email and any attachments are confidential and may be legally privileged. If you are not the intended recipient please advise the sender immediately and delete the email and attachments. Any use, dissemination, reproduction or distribution of this email and any attachments by anyone other than the intended recipient is prohibited.

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Fwd: Body corp rules, and how can banks view "draft" titles?
by Alex King 10 Dec '20

10 Dec '20

From the Lawyer, FYI Thanks, Alex -------- Forwarded Message -------- Subject: RE: Body corp rules, and how can banks view "draft" titles? Date: Wed, 9 Dec 2020 22:56:48 +0000 From: Simon Milne <simon(a)mcmillanco.nz> To: Alex King <alex(a)king.net.nz> CC: UCOL Directors <ucol-directors(a)list.king.net.nz> Hi Alex, Thank you for your email below. We have reviewed the Body Corporate Rules and generally we see no issue with the draft Rules you have provided apart from some minor points as per our comments below. Please also see my other comments in blue below regarding the other matters you have raised. Review of Body Corporate Rules: The only rule that we can see as possibly being problematic is that requiring attendance at meetings. Apart from that, there are a few corrections all as noted below. __ _Review of Body Corporate Rules against the Unit Titles Act 2010 (“Act”):_ *Rule 3 *- Principles of Occupation – Cohousing community group attendance, requiring the attendance of owners or occupiers at group decision making meetings. *Issue 1: *Are these in effect ‘body corporate meetings’, to be assessed against those relevant sections of the Act? *Issue 2: *Does compulsory attendance go beyond the powers conferred by the Act.** ** Section 106 (2) of the Act provides that additions to the body corporate operational rules cannot confer on the Body Corporate (BC) any powers that are not incidental to those conferred under the Act…. Phraseology which is open to interpretation. BC powers are listed in s 84 of the Act. In relation to BC meetings, under s 90 the only power conferred is the power of the chairperson to call a meeting. Arguably requiring attendance goes beyond the kind of powers conferred by the Act. If included in the rules it is possible that this rule may not be enforceable. Just something to be aware of but on balance Rule 3 can remain as is. *Rule 3 -* Principles of Occupation – Commons Development fund*, *requiring vendors to contribute 5% on sale to the Commons Development Fund.** Section 121 (b) of the Act states that contributions to be levied on unit owners in the case of any capital improvement fund, are to be calculated in proportion to each unit owner’s ownership interest. The Act obviously envisions each owner paying their proportionate share, which would not be the case for those owners who do not sell. It would be difficult to evidence so is not likely to be a problematic rule. _Other points of note:_ *Rule 17 (b)* requires the repair of leaks ‘as soon as possible’. It may be better to say ‘as soon as reasonably possible’. *Rule 21*– requires that firearms ‘should’ be stored off site. You may consider a change in wording if you intend this to be more than mere guidance. Replace “should” with “must”. *Rule 24*– refers to a section when it should refer to a clause (i.e. of a regulation). *Rule 25*– the rules don’t provide for the appointment of the mediation and dispute resolution team. *Rule 26(f)*– should refer to cl 11 not s 11, and ‘regulations’ not ‘resolutions’. *Rule 28*– requires breaches to be rectified in a reasonable time, or no later than 7 days after notice. 7 days may in itself not be reasonable? Regards Simon Simon Milne PARTNER AND NOTARY PUBLIC McMillan&Co. LAWYERS ˑ MEDIATORS ˑ NOTARY PUBLIC Level 5, Forsyth Barr House, 165 Stuart Street, The Octagon , Dunedin 9016; PO Box 5547, Dunedin 9054 P *+64 3 477 2238* <tel:+64%203%20477%202238> | M *021 729324* <tel:021%20729324> | F *+64 3 474 5588* <fax:+64%203%20474%205588> | *simon(a)mcmillanco.nz* <mailto:simon@mcmillanco.nz> | *www.mcmillanco.nz* <http://www.mcmillanco.nz/> Disclaimer: The information in this email is confidential and may be legally privileged. If you are not the intended recipient, please respect this and notify the sender immediately by telephone. Please also destroy this email. Thank you. CHRISTMAS HOURS McMillan&Co. will be closed for the Christmas period from Midday, Wednesday, 23 December 2020, with normal office hours resuming Monday, 18 January 2021. *From:*Alex King <alex(a)king.net.nz> *Sent:* Wednesday, 9 December 2020 1:30 PM *To:* Simon Milne <simon(a)mcmillanco.nz> *Cc:* UCOL Directors <ucol-directors(a)list.king.net.nz> *Subject:* Body corp rules, and how can banks view "draft" titles? Hi Simon, A reminder to let me know if our adopted BC rules are legally appropriate? Also we have another issue, that (some at least) banks wont give us an indication of whether they would likely lend before they have seen the title. Kiwibank are explicitly saying the 5% capital gain on resale and the covenant requiring participation in cohousing are problematic. I presume the reference to 5% capital gain is in fact to Rule 3 (Commons Development Fund). It is possible that some banks may not be happy with that requirement on resale and therefore you may want to revisit that requirement but my recall is that this provision was important to you all. The reason that a bank may not be agreeable with this is that say on a resale of $700,000 5% of that is $35,000 which depending on what equity a purchaser has this could reduce the loan to value ratio a bank might be working on for that particular purchaser. I guess it is going to depend on each bank and each purchasers situation. Generally there should be more than enough equity ( given the currently rapidly increasing prices in Dunedin) for that not to be a problem for most purchasers and their banks. I think we already have all the covenants drafted and information that will go into the titles? Is there a way we can gather this information and show the banks a draft of what title will be like? So we can find out if these things are going to be problematic and work on them now and not just prior to settlement date? Until the new titles issue we can’t provide a copy of what the title will look like but the banks can be provided with a copy of the surveyors unit title plan which lists all the new titles, unit numbers and accessory units and easements (as per the attached received from the surveyors). Our wider group meets on Thursday evening and it would be good to be able to reassure people about those matters before then. Thanks, Alex King Director, UCOL -------- Forwarded Message -------- *Subject: * RE: certificate of title *Date: * Tue, 8 Dec 2020 18:12:10 +1300 *From: * Roz Wilson <michael.rosemary(a)xtra.co.nz> <mailto:michael.rosemary@xtra.co.nz> *To: * 'Alex King' <alex(a)king.net.nz> <mailto:alex@king.net.nz> Thanks, realise the title won’t come till later but, from what we have been told, if we could produce some sort of independent notification about what the conditions of the title would be everyone might have another source of mortgages. Regds roz *From:*Alex King <alex(a)king.net.nz> <mailto:alex@king.net.nz> *Sent:* Tuesday, 8 December 2020 5:52 pm *To:* Roz Wilson <michael.rosemary(a)xtra.co.nz> <mailto:michael.rosemary@xtra.co.nz> *Subject:* Re: certificate of title Yep, I'll explain in an email to everyone, we should know more by Thursday, but titles probably won't be issued until January some time. Thanks, Alex On 8/12/20 4:38 pm, Roz Wilson wrote: Hi, did Catherine email you? we are trying to get a mortgage from Westpac, not to buy our unit, but for another project. Two months later they still haven’t given a decision and apparently not likely to until they can see what the conditions are on the title. We were wondering how soon the conditions will be known cos a long wait if we have to wait till settlement till we find out. A bit nervous about 6 people needing mortgages and the banks not being particularly helpful, we need those mortgages to clear kiwibank! Thanks roz

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Ucol-shareholders December 2020