Thanks maria, we have tried to get a mortgage through a broker and direct from a bank but the only document we have had to supply is the sale and purchase agreement. Is the covenant in that? So not sure it is the covenant about being cohousing that is putting lenders off, unless someone else who tried the same lender gave those docs? Regds roz
From: Ucol-shareholders <ucol-shareholders-bounces@list.king.net.nz> On Behalf Of Maria Callau
Sent: Wednesday, 16 December 2020 2:58 pm
To: UCOL shareholders <ucol-shareholders@list.king.net.nz>
Subject: [Ucol-shareholders] No Covenant required by our Resource Consent to be Cohousing
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