Luke Stewart

Qualifications

LLB, University of Canterbury 2000
Admitted to the Bar in New Zealand 2001

Community Activity

Honorary solicitor for the Tauranga Chamber of Commerce, Eastern Bay Community Foundation, and Bay of Plenty Deerstalkers Association.
Solicitor acting for Legacy Funeral Homes, AIMS Games, Sport Bay of Plenty, Tourism Bay of Plenty, EPIC Whakatāne, Tauranga Maritime Trust.
Previous board member and president of Tauranga Chamber of Commerce.
Previous board member Pillans Point Primary School.
Luke competed in the Coast to Coast in 2021.

Contact

DDI: +64 7 571 3835
M: +64 27 341 8234
E: luke.stewart@hobec.co.nz

Luke specialises in property, rural, business and asset planning law.

He joined Holland Beckett in 2006 and was appointed a Partner in 2014. Luke manages an experienced team across the Tauranga and Whakatāne offices.

Luke’s experience includes the following:

Residential and commercial conveyancing and structuring advice for private individuals and developers.
Negotiating large forestry, dairy and kiwifruit transactions for Māori trusts, private clients and corporate farming entities.
Acting for Foodstuffs Members in the purchase and sale of Pak n Save, Gilmours and Four Square stores throughout the country.
Advising high net worth individuals and medium size business owners on trust, leasing, farm sales, estates, shareholder agreements and restructuring matters.
Acting for property developers on commercial and property matters including multiple lot subdivisions.

Prior to joining Holland Beckett, Luke worked for the Department of Trade and Industry in London, and Langley Twigg in Napier in the commercial/property and employment teams.

Luke Stewart's Expertise

Rural & Agribusiness

Estate Administration

Trusts, Asset Protection & Estate Planning

Property Law

Commercial Law

Luke Stewart's News & Resources

Residential Care Subsidies

If you are approaching or have already reached 65 years and think you may require long-term residential care, did you know you may be entitled to a residential care subsidy? What is the average cost of residential care in NZ per annum? This annual cost of residential care varies based on a range of factors such as location, level of care and accommodation type. Health New Zealand – Te Whatu Ora sets a maximum contribution for reach region, being the highest amount a resident can be charged for standard care. Currently in Tauranga the maximum contribution is approximately $1,294.86 per week. What is a Residential Care Subsidy (“RCS”)? A RCS covers the difference between the actual cost of care and the applicant’s assessed contribution towards the care costs. The RCS is paid directly to the care facility by Health New Zealand – Te Whatu Ora. The subsidy covers the cost of standard residential care costs only, such as accommodation in a standard room, daily living assistance, nursing, prescribed subsidised medications, and routine GP visit. It is important to highlight that the subsidy does not cover premium accommodation charges for features such as private ensuites or superior views. An asset and income assessment is carried out to decide whether you are in a position to pay for yourcare yourself, and if not, your residential care subsidy entitlement. What is the asset assessment for a RCS? If you\'re 50-64 and single with no dependent children, you automatically meet the asset test. If you’re 65 or older, the asset limit for individuals or couples where you are both in care is $284,636 or less. If you’re 65 or older, and you have a partner who is not in long-term residential care you have two asset limit options: $155,873 or less, if you don\'t want to include the value of your house and car; or $284,636 or less, if you do want to include the value of your house and car. What is the income assessment for a RCS? An income assessment will be carried out to determine the applicant’s contribution towards the cost of care. For the purposes of the income assessment, income includes: NZ Super, Veteran\'s Pension or any other benefit. 50% of private superannuation payments. 50% of life insurance annuities. Overseas Government pensions. Contributions from relatives. Earnings from interest and bank accounts. Investments, business or employment. Income or payments from a trust or estate. The following is note included as income: Any money your partner has earned through work. A War Disablement Pension from New Zealand or any other Commonwealth country. Income from assets when the income is under: $1,236 a year for single people $2,472 a year for a couple when both have been assessed as needing care $3,707 a year for a couple where one partner has been assessed as needing care. Can I gift assets in advance of moving into residential care? You can gift assets to, say, family, friends, charity – but only up to a point. There are two allowable gifting limits: 1. Gifts made within the 5 year period: You are allowed to gift up to $8,000 of assets per couple per year in the last 5 years from when you apply for a RCS. This is a total of $40,000 of assets over the 5 year period with some spreading permissible during this period. If you and your partner apply for a RCS at the same time, this amount will double to $80,000. 2. Gifts made outside of the 5 year period: You are allowed to gift up to $27,000 of assets per couple per year outside of the 5 year period. It is important to note that before gift duty was abolished in 2011, the allowable gifting threshold which applied in the context of gift duty was $27,000 per person per year. This does not align with allowable gifting in the context of RCS and can often catch applicants out. Any gifting in excess of these limits will be considered as deprivation of assets. In addition, interest not charged on outstanding debts can be capitalised when assessing eligibility for a RCS as part of the financial means assessment. Will I be eligible for a RCS if I have a Trust? Whether you are eligible for a RCS when you have a Trust will depend on your gifting history. There is an expectation that trusts will voluntarily assist with long-term care costs. Where there is a closely held family trust with a history of providing for an applicant, trust income must be assumed to be available unless there are particular circumstances that demonstrate it is not. Will I get to retain any of my pension? If you are successful in applying for a RCS, a majority of your pension (or other NZ Superannuation or benefit) will be applied to their care costs. You will retain a personal allowance of $56.58 per week. In addition, you will receive an annual clothing allowance of $354.89 which is paid on 1 April in each year. Residential Care Loans What options do I have if I am unsuccessful in applying for a RCS? Where an applicant is unsuccessful in applying for the RCS, they can consider a Residential Care Loan (“RCL”). A RCL is an agreement with the Crown to provide a loan for the cost of an applicants care. To be eligible for a RCL, the applicant must own a property with an unencumbered title. A caveat will be registered against the property’s title which secures the loan. The RCL will be paid on the earlier of: The sale of the property; or Within 12 months of the date of the applicant’s death. Figures are assessed and updated annually on 1 July. These limits are accurate at June 2025.

Retirement Villages – Occupation Right Agreements FAQ’s

There are several things you need to have in place in order to move into a retirement village. Residents need to have a valid Will and Enduring Powers of Attorney in relation to Property and Personal Care and Welfare. Your solicitor will need to provide the village with copies of your Enduring Powers of Attorney prior to taking occupation of the unit. Moving into a village will also involve signing an Occupation Right Agreement (ORA) with the retirement village. An ORA sets out the terms on which you can live in the village and the rights and obligations of both you and the village. You will be required to pay an entry payment on settlement, being your purchase price to live in the Unit. You will not own the unit like a freehold property, instead, you are given a right to occupy the unit and to use the village’s common areas. Below we provide information to answer commonly asked questions around ORA’s. What if my Trust is funding my entry payment? Most villages don’t allow a Trust to be recorded as the licensee under the ORA. If the entry payment is being funded by a Trust, there will need to be background documentation which records how those funds are being advanced, for example, by way of loan or by way of capital distribution. If the Trust is advancing those funds by way of loan, Trustees need to consider the DMF and any additional charges that will be deducted by the operator on termination of the ORA and how that will be treated. Most villages have a direction for payment on termination form that can be completed to record that on termination, the termination proceeds are to be paid to the Trust. What if I change my mind? Residents under every ORA have the benefit of a 15 working day cooling off period. Residents can terminate the ORA within 15 working days of signing it without having to give any reason. The DMF will not be charged where residents terminate under the cooling off period. Some villages offer a 90-day money back guarantee. This guarantee allows residents to terminate the ORA within 90 days of the commencement date, if they are unhappy with their decision to move into the village or it does not meet their needs. The DMF will not be charged where residents terminate under the 90-day money back guarantee. Residents need to meet certain criteria to cancel under this right. What is a deferred management fee (“DMF”)? A DMF is the operators charge for managing and maintaining the village, your unit and the facilities. The DMF is charged as a percentage of the entry payment up to a maximum 30%. Some villages offer a choice in DMF at either 30% or 25% with the latter option having a higher entry price. The DMF accrues over time, generally between the first 2 to 5 years of residency. The DMF is charged on termination of the ORA, and is deducted from the monies owing to the outgoing resident. What is a weekly village fee? The weekly village fee is the resident’s share of the village outgoings which are payable by the operator. Generally, the weekly village fee is charged monthly by direct debit. Weekly village fees can be fixed, or subject to change. Generally, where a weekly village fee is subject to change, it is increased by the percentage change in CPI on 1 April in each year. When the weekly village fee ceases to be payable differs between villages. Commonly, the weekly village fee ceases to be payable on the termination date of the ORA, provided the resident has vacated the unit and removed all of their possessions. Will I incur any additional ongoing costs? Separately to the weekly village fee, residents will be liable for all utility costs consumed in respect of the unit, such as electricity, gas, telephone, internet and in some cases water. Some villages purchase such utilities in bulk and build these costs into their weekly fees. Where the unit is a serviced apartment, residents will also be liable for ongoing weekly service fees for services such as meals, laundry, cleaning etc. Additional services charges for services such as hairdressing and podiatry, will be charged in addition to the regular fees. What if I need a higher level of care? Residents and their families should make enquiries as to what facilities or options are available for higher levels of care, such as serviced apartments, care suites and hospital/rest home facilities. It is important to understand what terms apply to transfers within a village, for example, will you be charged a transfer fee and if so, how is this calculated. Where a village offers care suites under an occupation right agreement, residents need to understand the DMF structure which will apply. Generally, where residents transfer from an independent living unit to a care suite, the DMF that has accrued under the independent living unit will not be applied to the care suite, and a second DMF will be charged on the care suite. Often a DMF under a care suite will accrue at a faster rate, such as 12% in the first and second year of occupancy, and 6% in the third year. Some villages charge an initial % on the commencement date. Can I terminate the agreement? You can terminate an ORA at any time on giving the required notice and the ORA will terminate on your death or the death of the survivor of you (in the case of joint residents). There are limited grounds on which the operator can terminate an ORA, such as where you can no longer live safely in the village, if you breach the terms of the ORA in a material way, if you cause any serious damage or distress to someone in the village, or you have permanently abandoned the unit. When do I receive the money owing to me following termination? Generally, residents will not receive the monies owing to them until the unit is re-licensed to a new resident, that resident has signed their ORA, the cooling off period has expired and they have settled their entry payment. Some ORA’s provide that interest will be paid on the monies owing to a resident for the period from the date that is 6 months following the termination date until the date the resident is paid. Some ORA’s provide a village contribution rebate whereby the DMF starts accruing back/gets credited back if the unit hasn’t been re-licensed within 9 months. If you are thinking of moving into a retirement home, contact Holland Beckett’s team for expert advice on ORA’s and planning for this phase of life.

Bright-line Tax Changes – What You Need To Know

It is a bright day for some property owners this July with the relaxing of the Bright-line Test requirement. What is the Bright-line Test The Bright-line test sets a out a timeframe where if a sale of a residential property occurs, the profit gained may count as income and therefore be taxable. However, some exceptions or rollover reliefs may apply that sidesteps the Bright-line rule. The Bright-line Test Historically From its inception in 2015, the Brightline test was set for a period of 2 years. A first amendment extended the period to 5 years if residential properties were purchased between 29 March 2018 and 26 March 2021. A further amendment was then made for residential properties purchased between 27 March 2021 and 30 June 2024 to have the Brightline period for 5 years for qualifying new builds or 10 years for other residential properties. Bright-line Latest Changes As of 1 July 2024, the Bright-line period is reduced back down to 2 years. So, residential properties sold on or after 1 July 2024 that is outside the 2-year period from when it was purchased will not be subject to the new Bright-line test. However, other tax obligations may still apply particularly to those who make a living out of buying and selling residential properties. Tax obligations may also apply if caught by the “intention test”, the idea being that if you buy a property with the intention of re-selling it to make a profit, you can be taxed. Some Exceptions to the Bright-line Test The Bright-line test does not apply if you are selling your main home. However, the main home must have been used “predominantly, for most of the time” during the period you own it. The test also does not apply to residential properties transferred to the executors, administrators or beneficiaries of a deceased estate. Rollover Relief A rollover relief may also apply. This is when a transferee to whom the residential property is transferred is deemed to have acquired the residential property at the same time as when the transferor acquired the residential property. Rollover reliefs may apply between transferors and transferees who are associated persons such as transfers between certain family members, some transfers of trust property, transfers of relationship property or transfers resulting from separations. However, the associated persons must have been associated for at least 2 years prior to the date of the transfer of residential property. Conclusion Only so much can be said in this article regarding the tax implications in selling a property. It is always prudent to seek legal and tax advice from a qualified professional when doing so. But at least the time frames for Bright-line which was resulting in profits from many rental property sales being taxed have been reduced from 1 July 2024. Please feel free to contact us for specific advice on your rental property sales.

Reverse Mortgages

A reverse mortgage is a loan for people over 60 years of age that allows them to access equity in their property in order to release cash to them. We see plenty of clients that have benefitted from these loans in allowing them to e.g. fund necessary improvements or maintenance to their property to enable them to stay in their own home longer or for other purposes such as a more comfortable retirement in light of the increasing costs of living. The key attraction of a reverse mortgage loan is that you don’t need to make regular repayments, and generally repayments can be made at any time without penalty. Instead, they service the interest every week, the interest is just added to the loan balance and accumulates. Your total loan is repayable upon what is commonly called a ‘payment event’, which is where you may sell your property, move into a retirement village or upon your death. There is a limited ability to transfer the loan to another property if you move. Interest rates are generally higher than standard registered bank loans and borrowers need to understand the implications of these higher rates. In the current market, property values are not increasing as fast as they have in the past so the equity in your home could be depleted too fast given there are no increasing property values to offset losses. Due to the accumulation of interest at a higher rate, if you wish to sell your house and purchase a new house, or move into a retirement village in future, this may be more difficult to achieve as the equity you have left in your property may have reduced to an insufficient sum necessary for the subsequent purchase. Nevertheless, reverse mortgages can be an appropriate way of making funds available to you. The additional funds can support living expenses, healthcare costs or other needs. We are commonly instructed by banks to provide legal advice regarding these loans. Following our advice, our work involves discharging any existing mortgage, registering your new reverse mortgage and attending to any estate matters which may arise as part of our discussion. If you require any legal assistance on a reverse mortgage, please get in touch.

Understanding your obligations under the Consumer Guarantees Act 1993

The Consumer Guarantees Act 1993 (CGA) provides a consumer with remedies if a business has failed to provide them with goods or services to a reasonable standard, regardless of whether the consumer has a written warranty or guarantee from the supplier or manufacturer. The CGA is intended to foster a trading environment in which consumer’s interests are protected, businesses compete effectively, and consumers and businesses can participate confidently. Does the CGA affect me? If you supply products or services as a normal part of your business, you are likely to be considered \'in trade\' and the CGA will apply to your business transactions. The CGA will affect you if you are a manufacturer of products that are subsequently supplied to consumers, even if those products are indirectly supplied through distributors and/or retailers. Parties to business-to-business transactions can (and regularly do) agree to exclude or modify some or all of the default guarantees and remedies under the CGA, but such an agreement must be in writing and the parties will only be bound if it is fair and reasonable. A manufacturer of a product could exclude the CGA in a contract with a distributor, but that will not affect the rights of an end consumer of that product under the CGA against the manufacturer. What are my obligations under the CGA? As a business or person in trade, any goods or services you manufacture or supply must meet the minimum requirements outlined in the CGA. Goods must: Be sold with clear title free from security interests Be of acceptable quality Be fit for purpose Match their description Comply with samples Be reasonably priced, if there is no predetermined price If delivered by the supplier, be delivered on time Have spare parts or repairs available Services must be: Performed with reasonable skill and care Fit for purpose Provided within a reasonable time Priced reasonably, if there is no predetermined price For more detail on these obligations, see the guidance available on the Consumer Protection website. When might I be liable to claims under the CGA? If a supplier has breached a guarantee under the CGA, the consumer may have remedies including requiring the supplier to repair, replace or refund the purchase price. The consumers remedy will depend upon the severity of the breach and the type of product or service concerned. For smaller claims, if a consumer is unable to resolve the matter directly with a supplier, a cost effective approach may be to make a Disputes Tribunal claim. If you are would like to understand more about your rights or responsibilities under the Consumer Guarantees Act, Holland Beckett can provide you with advice and guidance.

New Firearms Registration Law

The second phase of the firearms reform process that began in 2019 reached a new milestone on 24 June 2023 with the introduction of the Arms Amendment Regulations 2023. The new firearms registry set up under the Regulations is administered by the Firearms Safety Authority. The Authority launched in late 2022. It works with the Commissioner of Police to provide a range of services related to firearms registration. The registry will progressively impose reporting requirements on New Zealand’s 240,000 licenced firearms owners over the next five years. For simplicity, in this article, we refer to “guns” and “weapons”. But these obligations apply to all “arms items”: firearms, magazines, pistols, restricted weapons, ‘major parts’, and pistol carbine conversion kits. The Regulations do not currently require the registration of other parts which require a firearms licence to purchase. This includes grips, frames, chassis systems, flash suppressors, and silencers. Firearms that are inoperative do need to be registered. The only exclusions are antique guns, and airguns (except for “especially dangerous airguns”). Guns are classed as antiques if manufactured before 1899, are held solely as antiques, and if incapable of firing rimfire and centrefire ammunition. Firearms dealers are subject to somewhat more onerous obligations, and required to register their stock before 24 June 2025. The Authority will proactively contact dealers to advise them how to register their stock. From 24 June 2023, gun owners can voluntarily register their weapons at any time, either by setting up a MyFirearms account on the Authority’s online portal (which allows use of the RealMe service already in use by IRD and other departments), or by phone (freephone 0800 844 431). To register, gun owners will require details of their firearms licence, and the identification details for their weapons (including manufacturer, year of manufacture, action, calibre/gauge, and serial number). Any custom made weapons or other items without identifying marks will need to be registered over the telephone. All gun owners will need to have registered their weapons with the Authority before the close of 31 August 2028 by the latest. However, an earlier deadline can apply in some circumstances. Gun owners will need to take care of registration earlier than 31 August 2028 if: They apply for a new licence, endorsement, or licence renewal. New licence holders will need to register their guns when they get their licence. Renewing owners have 30 days after the renewal to register their guns. They buy, sell, supply, or receive a gun. The item that changes hands must be registered as soon as practicable after the weapon changes hands, and they must register all of their guns (even those not changing hands) within a month after the transfer. They import a gun. That item must be registered within 30 days after the gun is released by customs, and all their other weapons must be registered a month after that same day. They manufacture or export a gun. That item must be registered within five days after the export or manufacture is complete, and all their other weapons must be registered a month after that same day. They notify the Police that they have lost a gun, had one stolen, or have destroyed a firearm. In that case, they will need to register that gun immediately, and their other weapons within 30 days after that gun was lost, stolen, or destroyed. Ammunition does not need to be registered. However, if a gun owner buys ammunition after 24 June 2025, they will need to register all weapons within their possession within 30 days after the purchase. There is no charge for registering a firearm. Where a gun changes hands, the obligation to register the change in ownership is with the person making the transfer (ie. the seller or person giving the gun away or exporting it). If a licenced firearms owner has no items in their possession, they will still be required to register and declare “No Arms Items”. Guns can only be registered to one licenced owner. If a person is responsible for a weapon for a club, range, organisation, or business, they will need to register the firearm against their licence. If a gun is being loaned or given for safekeeping to another licence-holder for less than 30 days, the transfer does not need to be registered. Any longer term loans will need to be registered by the person handing over custody of the weapon. Gun owners who fail to register their weapons in a timely manner face a fine of $10,000, even for unintentional breaches of the regulations. Deliberately failing to comply the rules can lead to fines of $20,000, or up to two years in prison. So, if in doubt, it will pay to seek advice. The information held by the registry (ie. the firearms owned by a licence holder) will be accessible by the Police when carrying out their lawful duties. Upon request, holders of firearms licences and dealer’s licences to view their own information and confirm/verify the licence, endorsement, and permit status of any person they are buying or selling firearms to. However, they will not be able to see what firearms are owned by the other party. If in any doubt over your registration obligations, or if you have any questions at all related to firearms and the law, Holland Beckett Law’s wide-reaching practice – from criminal to civil, from city to country – allows us to provide the answers you need.

Purchasing a Kiwifruit Orchard

Purchasing a kiwifruit orchard comes with lots to think about and plenty of due diligence to undertake. Often the purchase will be conditional on these further investigations, so what is important to consider? For most orchardists, water and compliance are key considerations. Often water is sourced from a bore, either on the land itself or from neighbouring properties pursuant to an easement or water supply scheme. However, to take water for irrigation or frost protection, you not only need the legal right to convey the water from its source potentially across your neighbours\' land but also consider the terms of this easement and rules around how you are to share pump maintenance and running costs with your neighbours. As well as ensuring there is the appropriate Resource Consent to draw either surface water or bore water at a sufficient rate to irrigate or provide the necessary frost protection. Resource Consents have strict allowable flows and volumes and require metering and monitoring to ensure compliance. In some cases water storage on site is necessary to make sure that sufficient volumes of water are readily available in times of peak demand without breaching the flow limits. In addition to water, overall compliance by the vendor is important, such as not exceeding their licensed plantable area, ensuring Global Gap compliance, maintaining the required spray programme and diary to Zespri’s export standard, etc. Another big factor is the ownership of the crop that may be on the vines or could have been picked. Special care is needed when a settlement is likely to take place around picking time as the treatment of hanging fruit can be different from picked fruit from a tax point of view. Most agreements will clearly state who retains ownership of the current crop and who is to benefit from the sale proceeds, even if it is already (or will be by settlement) picked and in the coolstore. With Zespri’s trailing payment method over the year following the picking of a crop, there can be significant cashflow impacts for a buyer if they don’t also buy the crop, as they may not get any income from the orchard until the following year\'s crop, starting up to 12 months later. In this case sufficient finance would need to be in place from the outset to fund orchard expenditure until income is received. Ultimately the ownership of the crop has an impact on the overall price paid for the orchard and a purchasers funding requirements. Other considerations include: Legal Title and any other registered interests or easements on the land Licence Ownership Any ongoing management agreements Your structure and ownership entity KPIN transfer Chattels and Improvements and the apportionment of values Zespri shares and many more. If you are contemplating purchasing your first orchard or expanding your existing operations, please contact us with any queries before entering into an agreement.

Upcoming Changes in Trust Law

Trusts are a firmly established mechanism for protecting and managing assets in New Zealand. The upcoming changes in trust law are long overdue. However, such changes are also sure to call into question the country’s fixation with family trusts. The Trusts Bill (“the Bill”) was introduced on 1 August 2017, following multiple reviews conducted by the Law Commission, which branded the Trustee Act 1956 (“the Act”) as out-dated and inaccessible. The Bill is to replace this Act and also the Perpetuities Act 1964. It is intended to make trust law more manageable by clarifying the key features of a trust, outlining trustees\' powers and obligations and streamlining administration processes. The Bill outlines 5 mandatory trustee duties which cannot be negated by the terms of a trust. Trustees will have the duty to know and act in accordance with the terms of the trust, act honestly and in good faith, act for the benefit of beneficiaries or to further the purpose of the trust, and to exercise their powers for proper use. The Bill also establishes 10 default trustee duties which must be performed by a trustee unless modified or excluded by the terms of the trust. These default duties largely reflect the current law. Both classes of duties will provide trustees with a clear understanding of their role and aid in beneficiaries holding trustees accountable for their actions, omissions and decisions. Trustees will have to come to terms with disclosure requirements in favour of beneficiaries; a courtesy many beneficiaries are not afforded today. Part 3 of the Bill incorporates the presumption that basic information in relation to the trust’s affairs must be provided to beneficiaries. The provisions specify core documents which must be kept and for how long and the factors to be considered when determining what information should be shared or withheld. Part 4 of the Bill contains provisions concerning trustees\' powers and indemnities. Trustees\' powers are currently minimal and scattered throughout the Act. The powers under the Bill are clear and flexible; providing trustees with more discretion in managing, investing and distributing trust property. In some aspects, the Bill endeavours to make trust administration easier and inexpensive. For example, costs are to be minimised through no longer having to apply to the court for straightforward or contested changes of trustee appointments. The High Court will still have jurisdiction to review a trustee’s act, omission or decision, extend a trustee’s powers and give orders. However, alternative dispute resolution is encouraged throughout the Bill. Whilst the Bill will undoubtedly modernise a considerably out of date piece of legislation, the focus on trustees\' mandatory and default duties, together with the new beneficiary disclosure requirements, will impose greater compliance obligations on trustees. The additional costs of compliance may cause some to question if the administrative hassle begins to outweigh the actual benefit of keeping or forming a family trust in certain circumstances. The Bill has yet to have its first reading, so it is crucial that settlors and trustees of existing trusts continue to be aware of the proposed changes outlined above in anticipation of the changes coming into force. Please do not hesitate to contact us if you have any queries. This article was written for First Mortgage Trust.