Reverse mortgages: what you need to know

Becoming an approved Foodstuffs operator is a significant milestone. It is recognition that you are ready to take the next step into supermarket ownership. However, approval is only the beginning. Before you take ownership of a store, there is often substantial legal, financial, and structural work required behind the scenes. The decisions made during this period can have a long-term impact on your personal asset protection, financing arrangements, succession plans, and future opportunities within the cooperative. Every operator’s circumstances are different. Early planning with experienced legal and accounting advisers can help avoid unnecessary delays, satisfy Foodstuffs’ requirements, and create a strong foundation for long-term ownership success. Ownership starts before you buy a store Many approved operators assume the next step is simply negotiating a purchase price and signing a sale and purchase agreement. In reality, most important decisions occur before a store is even acquired. Questions to consider include: Who should own the shares in the member company? Should a family trust form part of the ownership structure? How should your equity contribution be structured? How will financing and guarantees affect your personal assets? What happens if your circumstances change in the future? Will the structure support future store ownership opportunities? Addressing these issues early is usually far easier than trying to restructure after settlement. Selecting the right ownership structure Unlike many privately owned businesses, Foodstuffs stores operate within a cooperative framework that includes specific ownership and control requirements. The cooperative’s constitutional framework is designed to ensure stores remain owned and operated by active supermarket operators rather than passive investors. Most operators will own their store through a member company. However, the way that company is structured requires careful planning. Issues such as shareholding arrangements, voting rights, governance and financing all need to work together while remaining compliant with Foodstuffs’ requirements. The right structure should achieve two objectives: Comply with Foodstuffs’ ownership requirements. Protect and support your personal and family objectives. Asset protection is not an afterthought For many operators, the purchase of their first store represents one of the largest financial commitments they will ever make. Foodstuffs funding arrangements commonly require personal guarantees, director undertakings and security arrangements. Trusts holding shares may also be required to provide guarantees. This makes asset protection planning critical. Depending on your circumstances, this may involve: Establishing a family trust; Reviewing an existing trust structure; Relationship property planning; Reviewing ownership of significant assets; Succession planning; and Coordinating with insurance advisers. An effective structure balances compliance requirements with protecting the wealth you are working hard to create. Using trusts in Foodstuffs ownership structures Family trusts are commonly used by operators as part of their ownership arrangements, but they must be carefully structured. Foodstuffs requires prior approval before a trust can acquire shares in a member company and has specific requirements regarding trustees, governance, guarantees and control. The Approved Operator must remain actively involved in both the member company and trust structure. Because trust arrangements can affect shareholder continuity, financing and governance requirements, it is important to obtain legal advice before implementing any trust ownership structure. Aligning legal, accounting and financing advice One of the most common causes of delays in ownership transactions is a disconnect between legal and accounting advice. Capital contributions, shareholder loans, company structures, trust arrangements, and tax considerations are all interconnected. Foodstuffs often requires a significant portion of an operator’s financial contribution to be introduced as share capital rather than entirely as debt, and any related-party lending may need to be subordinated. A coordinated approach between lawyer and accountant helps ensure the structure works commercially, practically and compliantly. Understanding the transaction process Once you have been approved and begin negotiating a store purchase, there is usually a substantial amount of documentation involved. Depending on the store and transaction, this may include: The business sale and purchase agreement; Membership and franchise documentation; Funding and security documents; Leases and lease assignments; Director and shareholder documentation; Insurance and licensing requirements; and Various Foodstuffs settlement requirements. Having advisers who understand this process can significantly reduce friction during an already busy period. Look beyond settlement Successful operators tend to think beyond the purchase itself. Before settlement, it is worth considering: Future store ownership opportunities; Succession planning; Governance arrangements; Wealth accumulation strategies; Family involvement in the business; and Exit planning. The ownership structure that works for your first store should ideally be capable of supporting future business growth and longer-term ownership ambitions as well. How Holland Beckett can help Holland Beckett regularly advises Foodstuffs operators on: Ownership structures; Family trusts and asset protection; Financing and guarantee arrangements; Store acquisitions and disposals; Leases and property matters; Governance structures; Succession planning; Future ownership strategies; and Relationship property matters. Becoming an approved operator is an exciting achievement. The next challenge is ensuring you are structured correctly before ownership begins. With the right advice and planning, you can move into ownership smoothly and build a platform for long-term success. Talk to Holland Beckett’s Property and Commercial team about building the right legal and financial foundations for your Foodstuffs ownership journey.

When purchasing a property, buyers often focus on the title, LIM report, building inspection and finance arrangements. However, from a property law perspective, there is often another layer of ownership and responsibility that can be just as important: the residents\' society. Residents\' societies have become increasingly common in New Zealand subdivisions, particularly for townhouse developments and other forms of higher-density housing. Understanding how these arrangements operate is becoming an increasingly important aspect of property law in New Zealand. Developers commonly use residents\' societies for practical and legitimate reasons. They may be required to satisfy council or resource consent requirements. They also provide a structure for managing shared infrastructure, landscaping and communal areas or facilities, and offer an alternative to body corporate structures in developments that do not sit comfortably within a unit title model. Membership is usually tied to ownership of a lot within the development and continues for as long as the property is owned. Property law due diligence before committing to a purchase Before committing to a purchase, it is worth understanding how the residents\' society operates and what responsibilities come with membership. Not all residents\' societies are the same Many purchasers assume residents\' societies operate much like a body corporate. In reality, they are governed by their constitution, land covenants, encumbrances and related documents. Incorporated societies legislation may also apply to some residents’ societies. As a result, the rights, responsibilities and costs can vary significantly from one development to another. The quality of the governance arrangements often depends on how well the documents have been drafted. What works well in one development may create practical difficulties in another. Questions every property purchaser should ask 1. What communal assets am I responsible for? One of the first questions a purchaser should ask is what assets the society owns or manages. Some societies may be responsible for little more than a landscaped entranceway. Others may own or maintain substantial infrastructure such as roads, drainage systems, lighting, access lots or recreational facilities. Understanding what is owned by the society, and what maintenance obligations exist, is critical to understanding the true cost of ownership. 2. How much will I be required to contribute? Most residents\' societies collect levies to fund maintenance, administration and future capital expenditure. Not all societies allocate levies equally. Some constitutions contain different levy arrangements for different categories of owners or properties. Purchasers should understand: •how levies are calculated; whether all owners contribute equally; what current levies are; whether there are any planned increases; whether there is a long-term maintenance fund; whether major expenditure is anticipated in the future; and whether owners are keeping up with levy payments. A society that has not set aside enough for future maintenance may simply be pushing costs onto future owners. Unpaid levies can also place financial pressure on other members. 3. Is there a professional manager? One issue that is often overlooked is who is actually responsible for the day-to-day operation of the society. A poorly run society can be a major source of frustration. Some residents\' societies engage a professional manager to arrange maintenance, collect levies, organise meetings, maintain records and generally ensure that the society operates effectively. Others rely entirely on volunteer owners. The existence of a professional manager and the operation of the committee are important matters to consider. Owner-run societies can work well, but they can struggle if there are insufficient owners willing to organise maintenance, enforce rules, collect levies or manage disputes. Deferred maintenance and poor administration can become significant issues over time. Purchasers should also consider the term and flexibility of any professional management arrangements. Long-term management agreements can provide continuity and stability during the development and early ownership phases, particularly while shared infrastructure is being established and responsibility is transitioning to owners. At the same time, if service levels decline, fees increase or concerns arise regarding independence, owners may want to understand what ability exists to review or appoint a different manager. Understanding the terms of any management agreement is therefore important. 4. Is the developer still in control? In developments that are still being completed, it is not uncommon for a developer to retain certain rights while construction and sales continue. These are often referred to as \"developer control\" or \"controlling member\" provisions. These issues can be particularly relevant in large-scale developments, where property development lawyers are often involved in structuring governance arrangements and shared ownership frameworks. These arrangements often exist for legitimate reasons. In a staged development, the developer may need to complete future stages, maintain design and operational standards across the development, coordinate shared infrastructure, and ensure ongoing compliance with resource consent requirements and subdvision requirements while the development is still being delivered. A purchaser should understand: whether the developer retains special voting rights; whether the developer can override decisions of members or the committee; whether the developer can appoint committee members or managers; when any special rights expire; and whether the developer\'s interests remain aligned with those of existing owners. Such provisions are not necessarily problematic in a staged development, but purchasers should understand who controls the society, why those rights exist and how decisions are made before committing to the purchase. 5. Incorporated or Unincorporated? Not all residents\' societies are structured in the same way. Some are incorporated societies with a formal legal structure. Others rely on private governance arrangements contained in land covenants, encumbrances, easements or contractual agreements between owners. Both structures are commonly used in subdivisions and can work well where the governance documents are clear and suited to the particular development. For unincorporated arrangements, the underlying documents are especially important because there is no dedicated legislative framework sitting behind the arrangement. The governance documents therefore need to set out clearly how decisions are made, how obligations are enforced and how the structure will operate over time. They also need to be sufficiently future-proofed. What appears to work when a subdivision is first established may need to operate in different circumstances 10 or 20 years later. If the society’s constitutional documents require changes in the future, purchasers should understand how amendments can be made and what level of owner approval is required. 6. Is the society financially healthy and functioning well? Purchasers should look beyond the legal documents and seek to understand how the society operates in practice. Questions worth asking include: Is there a functioning committee? Are levies being collected and paid on time? Are adequate funds being set aside for future maintenance and renewal? Are there any ongoing disputes between members? Is there a long-term maintenance or asset management plan? Meeting minutes, budgets and maintenance plans can often provide more insight into the health of a society than the title documents alone. 7. What happens if the society is wound up? Although winding up a residents\' society may be unlikely in most developments, it is still worth understanding the position where a society owns land or communal infrastructure. Many purchasers assume that those assets will automatically pass to the owners if the society is ever wound up. However, for an incorporated society, that position is influenced by legislation. At present, that legislation is problematic and may require distribution of the society’s assets to another not-for-profit entity. This is unlikely to be a day-to-day issue for most purchasers, but it is one of the matters that can be relevant to understanding what happens to society-owned land and assets if the structure were ever brought to an end. Documents to request before buying Before purchasing a property that is subject to a residents\' society, purchasers should consider obtaining: the society constitution and rules; all relevant land covenants, encumbrances and consent notices; the relevant resource consent conditions affecting the development; current levy information and recent financial accounts; maintenance plans, asset management plans and budgets; minutes of recent committee and member meetings; any management agreement with a professional manager; and confirmation of any levies or other amounts outstanding against the property. These documents often provide a much clearer picture of the practical operation of the development than the title itself. Final takeaway A residents\' society is not simply an administrative formality. It determines how communal assets are maintained, how decisions are made, what costs owners must contribute towards and what obligations continue long after settlement. Understanding the residents\' society is just as important as understanding the title itself. If you are considering purchasing a property in a development with a residents\' society and are asking, “What am I actually signing up to?”, we can help you understand the governance arrangements, ongoing obligations and potential risks before you commit to the purchase. A clear understanding of the residents\' society before you go unconditional can help avoid unexpected costs, disputes and surprises after settlement. Obtaining early property law advice can provide greater certainty and help identify risks that may not be immediately evident from the title alone.

From 15 January 2026, New Zealanders can build one small, standalone, single‑storey dwelling up to 70 m² (often called a “granny flat”) without a building consent, provided every condition of the new national exemption is met and the required process is followed. At the same time, a new National Environmental Standard allows one detached minor residential unit per site in most zones without a resource consent, provided the relevant planning standards are met. These two regimes operate side by side and you must comply with both. What changed for granny flats in 2026? Two separate legal changes now apply. 1. Building consent exemption (Building Act 2004) You may build a small, standalone dwelling up to 70 m² without a building consent if: the design and construction meet all exemption conditions; and the work is done or supervised by licensed building professionals (“LBPs”), and licensed plumbers, drainlayers, gasfitters and electrical workers. Before work begins, you must obtain a Project Information Memorandum (“PIM”) from your council. When the build is completed, you must submit final documentation to the council for its records. Councils do not inspect exempt work and do not issue a Code Compliance Certificate, but they will hold your documents on the property file. 2. Planning rules: National Environmental Standards for Detached Minor Residential Units (“NES DMRU”) The Resource Management (National Environmental Standards for Detached Minor Residential Units) Regulations 2025 make one detached minor residential unit per site a permitted activity in most residential, rural, mixed use and Māori purpose zones, provided national standards are met. These national standards cover: maximum size (≤70 m²); boundary setbacks; site coverage; and compliance with relevant district and regional plan rules (for example, natural hazards or infrastructure constraints). Councils may be more lenient than the national standards, but cannot be stricter. If any national standard or district/regional plan rule is not complied with, a resource consent is required. Why this matters? MBIE estimates that the 2026 changes can: save around $5,650 in direct consenting costs; and reduce build timelines by approximately four weeks. However, owners and professionals now carry greater responsibility for Building Code compliance, documentation and quality assurance. Councils may still collect development contributions at the PIM or notification stage. What conditions must be met to be eligible for the exemption? 1. Form & size The dwelling must: be new, detached and single storey; be no more than 70 m² internal floor area (an internal garage is allowed); not have a mezzanine floor. 2. Siting & placement (planning rules) Under the NES DMRU, one unit per site is permitted if the national standards are satisfied. These typically include: a maximum size of 70 m²; site coverage caps (often no more than 50% in residential zones); and boundary setbacks (commonly at least 2 metres in residential zones). District Plans may allow more generous rules, so always check your council’s website and your PIM for site specific requirements, overlays and hazards. 3. Structure & materials Construction must be simple and lightweight (e.g. timber or light gauge steel framing, lightweight roof, wall claddings within weight limits). Heavy, complex or experimental systems will usually trigger the need for a full building consent. 4. Building Code still applies The NZ Building Code applies in full. There are no waivers under the building consent exemption. All restricted building work must be carried out or supervised by LBPs, and designers must provide a certificate of work and builders and trades must provide records of work. 5. Process & paperwork Before construction: Apply for and receive a PIM using Form 2AA (a new prescribed form). During construction: LBPs must build to the plans and specifications, supervise unlicensed workers and keep records. On completion: Within 20 working days, submit final plans, certificates of work, records of work and trade certificates to the council. These documents are added to the property file and LIM. No code compliance certificate is issued for an exempt build. Common mistakes and compliance risks Skipping the PIM: starting work without one disqualifies you from the building consent exemption. Failing NES DMRU standards: breaching setbacks or coverage rules means a resource consent is required. Failing to meet Council standards: compliance with the NES DMRU permitted activity standards on its own is not enough. You need to ensure compliance with district/regional plan rules. Over‑complex design: features such as wet‑room tiled showers, level‑entry detailing or solid‑fuel burners may fall outside the “simple build” intent and trigger consent. Poor documentation: missing certificates or records of work can affect insurance, financing, valuation and resale. Unexpected fees: councils may still charge costs at the PIM or notification stage. How we can help 1. Site due diligence (before design) We review titles, easements, covenants, encumbrances, cross‑leases and unit titles to identify restrictions on a second dwelling. We also check LIM notices and assess NES DMRU standards alongside district plan rules, including natural hazard constraints. 2. Planning strategy and NES DMRU compliance If a proposal does not meet a national standard or a rule in a district plan (for example, a boundary setback), our environment and planning team can advise on consent pathways and available options. 3. Contracts with designers/builders (and LBPs) We review contracts to ensure risk is allocated appropriately and ensure: quality assurance checkpoints; delivery of all certificates and records of work; insurance, warranties and variation controls; and contract terms reflect the no inspection exemption pathway. 4. Wider advice: tax/tenancy, ownership, asset planning For family occupation, we can document occupancy arrangements and advise on trusts, companies, co‑ownership arrangements, property development issues or future subdivision pathways (noting subdivision rules are separate).