Ho Ho Ho!
Is it just me, or do we all feel equally as shocked with the advancement of Christmas each year, heralded by faux Christmas trees, tinsel, postal queues, sales galore and staff functions?
With December just around the corner, it’s a good time to reflect on the past year and to look forward to opportunities for change and improvements to the way we have done things for so long.
Exemplary Change to Damage Claims for Landlords
It was interesting to read the Tenancy Tribunal Statistics recently which state that almost 50% of tenant applications against landlords contained a claim for exemplary damages from the landlord but less than 0.5% of landlord’s applications were for exemplary damages.
Exemplary damages are an award that the Tenancy Tribunal can make against a party to the hearing. It’s like a fine however it goes to the other claiming party rather than the Crown. Why is there such a disparity? It would appear that Tenancy Services’ hand holding of tenants means they know their rights about claiming exemplary damages more than landlords.
One example of a landlord's entitlement is abandonment of rental properties by tenants who owe money. This became an unlawful act in 2010 with the Residential Tenancy Amendment Act changes. This meant that for the first time consequences could actually apply against a tenant who abandoned the property owing money where previously the law almost encouraged tenants to give abandoning the property a go. Even if they were caught they only paid back the money they already owed. Now up to $1,000 in exemplary damages can be applied against tenants.
In addition to making sure that landlords claim these exemplary damages, we need to make sure that tenants know that they may be up for them if they do abandon the property owing rent.
Quite a few new and upgraded unlawful acts were against tenants in the 2010 RTA changes, so the following is a list and the maximum exemplary damages that you can claim:
- Tenant’s failure to comply with a termination order ($1,000)
- Using or permitting the premises to be used for unlawful purposes ($1,000)
- Harassment of other tenants or neighbours ($2,000)
- Assigning or subletting the property when prohibited to do so without the landlord’s written consent ($1,000)
- Abandonment of the premises without reasonable excuse and while the rent is in arrears ($1,000)
- Interference with the means of escape from fire ($3,000)
- Exceeding the maximum number of residents in the property ($1,000)
As the tribunal cannot award these damages unless you claim them, it is definitely in your interest to do so.
IRD numbers for property sales
October 2015, all vendors and purchasers of property, other than their main home, must now provide an IRD number as part of the land transfer process.
Offshore buyers must provide a New Zealand bank account number before they can obtain a New Zealand IRD number. And all non-resident buyers and sellers must provide their tax identification number from their home country, along with current identification requirements such as a passport.
Where a family’s main home is owned by the family trust, the trust is not exempt from providing an IRD number.
It’s quite common for a trust to own the family home, protecting the family from business or other relationship property risks. Up till now family trusts haven’t needed IRD numbers unless they had taxable income, like a business or rental properties. Now, when the family home is transferred into the trust or when the trust buys or sells property, the trust needs an IRD number regardless of income. Trustees’ own personal IRD numbers aren’t acceptable.
The new requirements also affect changes of title. So, if a trustee dies or retires and the new trustee’s name needs to be registered on the property title, the trust needs an IRD number to register the change.
If you are arranging for the family trust to buy, sell or transfer property, please contact us
. If the trust does not already have an IRD number we can take care of this. Otherwise you could face costly and stressful delays while you sort out the paperwork.
Countdown to 2016
Someone once said that the definition of insanity is repeating the same thing over and over again but expecting different results. Too often business owners fail to do adequate planning and end up stuck in the same rut year after year.
The New Year is the perfect time to stop and reflect on your trials and triumphs over the past year. As a business owner, this is the time to work ‘on your business’ instead of ‘in your business’. Rather than taking a ‘business as usual’ approach, make resolutions for a new direction.
Business owners who invest time in goal setting and annual planning typically outperform similar businesses that merely react to market forces as they occur. Those business owners probably sleep better at night because they know they're prepared for what may come.
1. Learn from the past
Review the previous year’s trading, looking at the strategies that worked, those that didn’t, and look at the ‘whys’. What changes could you make in 2016 to ensure mistakes aren’t repeated, and opportunities aren’t missed?
The next step is to set some specific and inspiring goals around key areas of your business development. Ask yourself what you will stop
doing as well as start
doing in 2016.
2. Prepare a Business Plan
A solid business plan will help you make better business decisions about the strategies you need to continue to operate and grow. A plan doesn’t need to be fancy or long – there just should be one. Stay on track by making business planning a weekly or fortnightly task. Know what you need to do to break-even, with a budget (preferably showing a profit) and a cash flow. In business, cash is king, and a sale is not a sale until the money is in the bank so careful planning is essential.
3. Don’t spread yourself too thinly
You may try to be all things to all people, the IT person, administrator, delivery person and perhaps even the tea maker. Wearing many hats can be exhausting. Avoid micromanaging employees. Delegate wisely. Consider outsourcing some tasks, so you can spend more time on growing the business.
4. Embrace technology
Don’t rely on what worked five, ten years ago. Consider using mobile apps, online business management tools and
cloud-based accounting software like Xero and Saasu. Today’s business technologies can save you time and money.
Reassess your online brand; google your business! Is it time for a more current headshot or even a fresh new website? This is a great time to tweak your online strategy. Your website is your business! Out-marketing your competitors could give you an edge.
5: Get it in writing
In the past, business was carried out on a handshake. Those days are long gone. These days you must have a written contract. These should include written quotes, sales terms on invoices, signed terms and credit term agreements, not forgetting employment contracts with your staff. Money spent with professionals getting these in place can save much angst and money later.
6. Get to grips with your Financial Statements
Business owners are often too busy to check out or understand financial statements. Get savvy with profit and loss statements, balance sheets and cash flow statements and don’t shy away from the numbers. This will give you greater control, a clearer picture of your business performance and can help you make smarter decisions and improve communication with your business advisers.
7. Look after yourself!
Relax and unwind – you’ve earned a break!
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