The building report showed a problem - what do I do? - Ask Susan

Send your questions to susan.edmunds@rnz.co.nz

I'm currently in the process of buying my first house. The building report has shown some problems with the house that need to be fixed - like a hole in the roof - but it's not enough to make me want to pull out of the purchase. Can I ask the seller to cut the price?

Assuming your offer was conditional on a building report, you can use an unsatisfactory one as a reason for pulling out of the purchase. But there are options, if that's not what you want to do.

You could ask your lawyer to negotiate with the seller's lawyer to have the repairs done for you before you buy the house, or you could ask for a price reduction. You'll need to be willing to show them the report.

There is no obligation on the vendor to do either, but it's worth a shot if it's not something that you have the budget for sorting yourself and you really want to continue with the purchase.

Sometimes, lenders might want to see evidence that you have the funds to fix any problems - and that it's not something that's going to make it hard to get insurance.

I am wondering whether the deposit compensation scheme will apply to investments PIE funds that look like bank accounts. These seem to be treated almost exactly like other accounts by some banks, and they also offer term deposit PIE accounts (but they might call them funds rather than accounts). Also, the scheme is for up to $100,000 per customer. Is a family trust considered to be a customer, or would the trustees be the customer, or neither? Could up to $200,000 be protected at one institution if half were in a family trust?

The regulations as they currently stand would include bank-sponsored PIE funds. (Just note those regulations haven't been approved by the Finance Minister yet.)

The legislation sets out how trusts are dealt with. There is this example given: A bank goes into liquidation. The Smith Family Trust has three trustees: X, Y, and Z. The trust has three deposits with B: $60,000, $30,000, and $20,000 ($110,000 in total). X, Y, and Z acting jointly in their capacity as trustees are treated under this Act as one person (A) that holds the deposits.

The total amount of the deposits is $110,000. This exceeds the $100,000 coverage limit under section 203. Therefore, the trustees (on behalf of the trust) are only entitled to compensation of $100,000 on B's liquidation.

The compensation is trust property. The entitlement of the Smith Family Trust is separate from any entitlement that X, Y, or Z may have in their personal capacity (or in a capacity as a trustee for some other trust).

If you had separate deposits with the bank in your own name you would also be able to have compensation for those as an individual.