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@sur-architecture.com Sent: Tuesday, 15 December 2020 4:20 PM To: Stephen Edge Stephen.Edge@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

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———

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