What is a Property Easement?

What is a Property Easement?

A property easement grants the right to owners of certain lots to use part of someone else’s land for a specific purpose, without awarding possession. Without an easement an individual can be made liable for trespass or causing a private nuisance. As such, easements are created and registered on title to protect people from unlawful or unreasonable interference.

The land which benefits from the easement is known as the dominant tenement whilst the land that is burdened by the easement is known as the servient tenement.

Positive and Negative Property Easements

Easements are broadly characterised as either positive or negative.

A positive easement allows one party to benefit from the access or modification of another party’s land in a positive manner.

negative easement restricts access or modification within the servient tenement.

Types of Property Easements

Different types of easements exist to simultaneously benefit the dominant tenement and protect the property rights of the servient tenement:

  1. right of carriageway easement permits an individual to access their property through another person’s property. This is a positive easement in which the shared use of the servient tenement’s driveway ensures that the dominant tenement’s property is not landlocked and inaccessible.
  2. Service easements permit the use of one person’s property to erect, maintain or repair services for another person’s property. This is a positive easement which allows for power lines, telephone lines, water pipes or sewage systems to be built on a servient tenement to ensure that the dominant tenement has access to these services.
  3. An easement of light and air preserves a property’s access to light, air or view. This is a negative easement which prevents the servient tenement from building walls or structures that might block the dominant tenement’s access to light and air.

Negative easements can be imposed if the use of land will restrict the property rights that the dominant tenement is ordinarily entitled to, cause excessive environmental harm, or damage the character of the neighbourhood.

How are easements created and enforced?

Easements fall under the jurisdiction of the Conveyancing Act (No 6) 1919 (NSW) and the Real Property Act (No 25) 1900 (NSW).

According to the NSW Land Registry Services (NSW LRS), a new easement ‘may be created by means of an appropriate dealing registered in NSW LRS or by the inclusion in a section 88B instrument lodged with a new deposited plan.’

The terms for creating, modifying or releasing an easement are dependant on the type of land involved. Requirements vary between easements if the dominant or servient tenement is Old System land, Crown land or Torrens title land. Requirements will also vary if the new easement is created by an agreement, statute or Order of Court.

An easement of necessity, for example, is created by an Order from the Court. The NSW LRS specifies that the Court may impose an easement if it is deemed reasonably necessary for the use or development of another parcel of land. This type of easement is commonly granted when services, drainage or land cannot be accessed without crossing the boundary of a neighbouring property. In this instance, the Court will ensure that compensation is paid to the owner of the servient tenement.

Extinguishing a Property Easement

Pursuant to Conveyancing Act (No 6) 1919 (NSW) s 89, an easement can be modified or wholly or partially extinguished if it unreasonably impedes the owner of the land subject to the easement or if the easement no longer holds practical benefit to the persons entitled to the easement. The Court may also classify an easement as abandoned if the land has remained unused for at least 20 years.

Contact Us

If you require assistance in creating, modifying or extinguishing an easement or seeking advice regarding property easement rights, please contact Etheringtons Solicitors in North Sydney on (02) 9963 9800 or via our online contact form.

First Home Buyer Choice: What you need to know

First Home Buyer Choice: What you need to know

The rate of young first home buyers has declined in New South Wales as buyers take more time to save funds for transfer duties (also known as stamp duty). Despite this, the Australian Bureau of Statistics (2021) indicates a 10-year national 72% capital gain on property prices. These high property prices, coupled with significant transfer duty fees, have contributed to a decline in homeownership across NSW, dropping from 70% in the 1990s to about 64% in 2022. Fortunately, a newly introduced scheme by the NSW State Government will further ease prospective first home buyers into the market.

Receiving assent on 11 November 2022, the Property Tax (First Home Buyer Choice) Act 2022 provides first home buyers with the choice between paying upfront transfer duty or an annual property tax. According to the NSW Government, “The scheme will offer support to about 97 per cent of all first home buyers, or about 55,000 people per year.”

Existing Laws – First Home Buyer Assistance Scheme

The current First Home Buyer Assistance Scheme was introduced on 1 July 2017. These existing laws entitle first home buyers to a concessional rate of transfer duty or an exemption from paying it altogether.

For new and existing homes under $650,000, first home buyers can apply for a full exemption, avoiding any transfer duties. For new and existing homes valued between $650,000 and $800,000, first home buyers can apply for a concessional transfer duty rate dependent upon the value of their home. In addition, when purchasing vacant land, first home buyers will not be required to pay transfer duty when the land is valued at less than $350,000. Where the vacant land is valued between $350,000 to $400,000, first home buyers will receive a concessional rate.

New Laws – Property Tax (First Home Buyer Choice)

The Property Tax (First Home Buyer Choice) Act 2022 will take effect from 16 January 2023 and, therefore, only apply to contracts that are exchanged on, or after, 16 January 2023. During the transitional period of 11 November 2022 to 16 January 2023, eligible first home buyers will still need to pay stamp duty if their purchase transaction settles before 16 January 2023. After this date, they may apply for a refund of the duty.

It is important to note that this scheme acts in addition to existing laws. Some first home buyers in NSW may already pay zero stamp duty or a concessional rate of duty under the First Home Buyer Assistance Scheme. The introduction of First Home Buyer Choice will not impact these stamp duty savings.

Under First Home Buyer Choice, first home buyers in NSW can now elect to pay either an upfront transfer duty prior to the completion of their property purchase, or an annual property tax. This property tax is levied each financial year, starting from the day after the property has been transferred into the buyer’s name at a pro-rata basis.

Eligibility to the First Home Buyer Choice

First Home Buyer Choice is only available on homes (new and existing) priced up to $1,500,000 or vacant land worth up to $800,000. Although there is no income threshold, eligibility to this scheme is determined upon the following requirements:

  1. The buyer must be over 18 years old
  2. The buyer must be an Australian citizen or permanent resident
  3. The buyer (and buyer’s spouse, if applicable) must not have owned any residential properties in Australia as an individual (as opposed to a company or trust)
  4. At least one of the buyers must move into the property within the first 12 months for a continuous period of 6 months.

Different rates for different types of ownership

The amount of property tax payable will be based on the land value of the first home buyers’ home. If the buyer wishes to use the property as an investment rather than owner-occupied (or vice-versa) RevenueNSW must be informed within 3 months of this decision in order to apply the appropriate property tax rate.

The tax rate for owner-occupiers for the 2022-23 and 2023-24 financial year is $400 plus 0.3% of land value. The tax rate for residential investors during the 2022-23 and 2023-24 financial year is $1,500 plus 1.1% of land value. In the following financial years, the tax rate will be indexed in line with average annual incomes, though the maximum increase in any given year is capped at 4%. In short, if the land value rises, so will the property tax.

When the property is sold

Once a buyer opts to pay the annual property tax and settles their purchase, the property will remain subject to the property tax until it is sold or transferred. The buyer cannot change to the stamp duty option after settlement.

When someone who is not eligible for First Home Buyer Choice purchases a property from someone who is paying the property tax under the First Home Buyer Choice, the purchaser will not be subject to property tax, but they will be subject to stamp duty.

Which is the best choice?

Each first home buyer should obtain independent advice from a financial or accounting professional.  It is important that buyers not only consider their current financial position and the national economic outlook, but also how long the buyer intends to keep their property. As opposed to a single upfront transfer duty, annual property tax payments continue to accumulate the longer the buyer owns their property. To further assist first home buyers in making their own comparisons, an online property tax calculator is available through Service NSW.

Contact Us

To ensure you make the right decision and maximise the benefit of the First Home Buyer Choice scheme, it is best to seek professional legal advice. If you would like to discuss your property matter with a legal professional please contact us on (02) 9963 9800 or at [email protected]

Take Care When Buying a Property ‘Off the Plan’

Take Care When Buying a Property ‘Off the Plan’

The term “buying off the plan” usually refers to purchasing a property that is not yet built yet.  Buying off the plan can also refer to the purchase of a block of vacant land that is part of a subdivision, or a house or unit being built for sale where the land on which the property stands is not yet registered as a separate title.

Selling property off the plan allows a land owner to negotiate lending rates with banks, as banks may be more willing to offer lower land development rates if some of the land, houses, or units have already been sold.

This is an advantage for the land developer and can also be attractive to a prospective purchaser who buys into an off the plan property in the early stages of the development.

There are however risks for the buyer of an off the plan property and a diligent purchaser should take care when entering into this type of purchase contract.

The Contract

A contract for the purchase of property off the plan likely will not have a precise competition or settlement date.

By contrast, a standard contract will have a precise date for settlement to occur (either an exact date in the future or a completion period say “60 days after the contract is dated”). An off the plan purchase contract will still have a timeframe but it is usually stipulated that settlement will occur within a number of days following completion of the building project and/or registration.

Off the plan contracts also often include a provision called a “sunset clause” which establishes a period within which the contract must be completed – say within 24 months of the date of the contract. This means that completion or settlement can be anytime in that 24 month period after the signing of contracts. If the date passes and the works are not completed, the parties may terminate the contract.

If you are buying a block of land off the plan in a subdivision the contract will usually include a clause allowing a variation in the area of the land that you will purchase on completion. This is because the local council and the land title registering authority have the final say on the area of the lots in the subdivision, and may require the land owner/developer to change the areas. This reduction is usually capped at “not more than 5% of the area” in the contract and does not normally occur, but if it does your land area may be reduced whilst the purchase price remains the same.

When houses or units are sold off the plan the construction of the property often will not begin until after you enter into the contract. The usual concerns with this type of purchase are that the progress of the building and the standard of the building work may be different to what you as the buyer contemplated.

Often the developer will have a demonstration or display home to inspect, showing you a model of how the buildings should look once completed, or they may have design guidelines and artist’s impressions of the building. These may not resemble exactly the finished building as some changes may be made during construction and you need to ensure that the contract provides some protection here. It is essential that you check the details of features, fixtures and fittings such as the stove, range hood, dishwasher, etc. and ensure that the quality of all finishes is clearly specified in a schedule that should be attached to the contract.

Market Fluctuations 

You should keep in mind that like the economy, property market conditions fluctuate and with long-term building projects such as luxury high-rise units, the value of the units may change prior to completion of the building and your contract. The price you agreed to pay stays the same regardless.

Paying a Deposit

Your deposit could be tied up for some time between signing the contract and settlement.

Paying a deposit by way of a Deposit Bond (not always available in all states) or bank guarantee may be a better choice than a cash deposit when buying off the plan. If you terminate the contract your bond or guarantee can be cancelled and you do not need to take steps to recover your cash deposit.

You should always seek legal advice if a request is made to release the deposit to the owner before the sale is settled. If you do pay a cash deposit you should stipulate in the contract who is holding the money and where it is being held. If possible it should be deposited in an interest bearing account by the stakeholder (often the real estate agent).

The Developer’s Financial Position 

Construction companies and land developers who become insolvent or go bankrupt during construction can leave a trail of destruction behind them. Rising building and material and labour costs may force a site closure and you may be locked into a contract for a home that is not finished within the timeframe you expected.

In some states the builder will be required to have insurance which may provide some compensation for defective work or loss due to a bankrupt builder. You should seek legal advice to see what protection is offered before signing a contract.

While an early buyer off the plan has the best choice of the land or homes available in a project and has a longer time to on-sell the property for potential profit, the strategy is not without risk. There are many factors to consider before entering into a contract and our property experts can help guide you through this process.

If you or someone you know wants more information or needs help or advice, please contact us on (02) 9963 9800 or via our contact form.

Release of Deposit

Release of Deposit

In the sale of residential and commercial land in New South Wales, it is common for vendors to insert a special condition into the contract which allows for the deposit to be accessed earlier by the vendor. This is known as a Release of Deposit clause. Although it is common, a Release of Deposit clause carries a number of risks to any potential purchaser.

A Typical Contract

Usually, when a purchaser enters into a contract with a vendor to purchase residential or commercial real estate in New South Wales, they are required to provide a deposit to the agent or to the vendor’s solicitor (if there is no agent), to hold on trust until the contract has settled. The deposit is not touched by the vendor or purchaser and is protected in that trust account until settlement occurs.

What is a Release of Deposit Clause?

A Release of Deposit clause allows the vendor to access this deposit before the completion of the purchase. There are many reasons why a vendor might wish to access the deposit before the settlement, such as:

  • The vendor is simultaneously purchasing a property and needs the deposit to pay the deposit on that property
  • They need to pay stamp duty on the property they are purchasing

Risks with Release of Deposit Clauses

The risk that results from a Release of Deposit clause is that if the contract falls over and the deposit is required to be returned to the purchaser, after it has been released to the vendor, the purchaser may have to sue the vendor to retrieve the deposit.

If the vendors have purchased another property and that deposit is now sitting in another agents’ trust account, or it is being used for the payment of stamp duty, then the recovery of the deposit increases in difficulty. Alternatively, if the vendor has become bankrupt, the likelihood of receiving any amount of the deposit back will also be impacted.

Minimizing Risk

Therefore, it is important for a purchaser to seek guidance from solicitors who can identify and request the removal of these clauses from a contract, as well as to look for other clauses which may be detrimental to a purchaser’s interests.

If the above sounds familiar and you wish to have a contract reviewed, or you require any other advice relating to the purchase and sale of commercial or residential real estate, please contact Etheringtons Solicitors.

Buying a Property At Auction – Things you need to know BEFORE auction day

Buying a Property At Auction – Things you need to know BEFORE auction day

Buying a property can often be an intimidating process, especially at auction where you are competing with other buyers and there is no cooling off period.

Many properties are sold at auction, particularly in a rising market, so it is important for buyers to understand the processes involved so they can bid confidently on the auction day.

There are many things that need to be done before the auction to ensure that your interests are protected and that you are fully informed about the property you are intending to buy; these things are outlined below.

Contract Review

The most important thing to do is to take the contract of sale to your lawyer well before the auction date.

Your lawyer will review the contract, advise you of any risks and help to protect your interests by identifying any terms that might need to be negotiated on your behalf such as longer settlement periods, reduced deposits and/or additional terms and conditions.

Your lawyer will also make sure you are buying exactly what you intend to and that the property is in the condition you expect. This will likely involve arranging pre-auction inspections, such as building and pest inspections.

If you are the successful bidder at the auction the reviewed contract can be signed with confidence.

Inspect the Property

You should thoroughly inspect the property before the auction day and satisfy yourself that all inclusions are in proper working order and that the gas, water and electricity are functioning properly.


Thoroughly research the area and surrounding suburbs before the auction day, so that you are comfortable about the amount you are prepared to pay for the property.


Make sure that you have your finances in order before making an offer. If you are obtaining mortgage finance, you should have this unconditionally approved not just pre-approved. Confirm with your lender the maximum amount you can borrow.

Pre-approval is not confirmation of how much the lender is willing to provide you, it is an indication of what you might be able to borrow depending on the value of the property, which is determined by a formal valuation after the auction.

It is important to ensure that you have adequate funds available to complete the purchase within the timeframe stipulated in the contract.


If you are the successful bidder, you will be required to pay a deposit cheque or deposit bond (usually 10% of the purchase price) immediately following signing of the contract.

Register to Bid 

To participate or bid at an auction, buyers must register with the selling agent and be given a bidder’s number. You can register with the selling agent at any time prior to the auction, such as when you inspect the property, or on the day itself.

To register you must provide ID – this must be a card or document issued by a government or financial institution showing your name and address. For example:

  • Driver’s license or learner’s permit
  • Vehicle registration paper
  • Council rates notice

If you do not have this kind of proof of identity you can use two documents that together show your name and address.


Make sure you have a strategy going into the auction and that you set yourself a maximum purchase price. Stick to that maximum price. If you feel as though you may be too emotionally attached to bid at the auction yourself, then organise with the Agent to have someone bid on your behalf. If you elect to do so, you must provide a written signed authority to the Agent authorising the person to bid on your behalf.

Successful Bidder 

If you are the highest bidder, immediately following the auction, you will be asked to:

  • Provide your contact details to the Agent;
  • Sign the contract of sale; and
  • Pay the deposit.

You will be entering into an unconditional and legally binding contract. There is no cooling-off period.

The signed contract will then be delivered to your solicitor’s office and they will contact you to discuss the next steps.


Getting the right advice, being fully informed and prepared before the auction day is a critical part of ensuring that the purchase of property runs smoothly.

The purchase of a property, at auction or otherwise, should not be unduly stressful and our expert team can help guide you through the process and make sure your interests are protected.

If you or someone you know is looking to purchase a property at auction and needs help or advice, please contact us via our form or on (02) 9963 9800.

5 Costs to Factor in When Buying a Home

5 Costs to Factor in When Buying a Home

Etheringtons Solicitors Note: In June 2022, the NSW Government announced legislation to reform transfer duty within NSW, moving to an ‘annual property tax’ system. These changes will take place over a number of years. For more information, click here.

If you are currently in the process of buying, looking or saving for a house, there are extra costs beyond the property’s price tag that you need to know about.

1.  Transfer duty (previously known as stamp duty)

When you purchase a property in NSW, you are required to pay transfer duty. This is a tax on property which varies depending on the value of the property. Generally, the more expensive the property you are purchasing, the more transfer duty you will pay. Transfer duty must typically be paid with 30 days of settlement, and may be a big upfront cost. It is important to factor your transfer duty costs into the other upfront costs you will need to make.

Some websites will help you calculate an estimate for what your transfer duty will be, to help you plan.

2.  Pest and building inspections 

Before purchasing property, it is recommended that you have pest and building inspections to determine the property’s condition. These inspections are especially important for older properties which might have long term problems that are not evident in a general inspection. Make sure you appoint a qualified person such as a licensed builder, surveyor or architect.

3.  Mortgage registration

You are required to pay a fee to formally register your mortgage in NSW. This mortgage registration payment is required by the state government to register the security for a home loan. This is important as it allows any potential buyers to check claims against the title of your property.

4.  Loan application or establishment fee

When you take out a home loan, you may be required to pay an establishment fee. However, some lenders will waive this fee, so it is worthwhile to around and see what your options are.

5.  Mortgage insurance

If you are borrowing more than 80% of the property value, you may be required to pay ‘Lenders Mortgage Insurance’ (LMI). The lender’s valuation of the property determines this fee.

Further Information 

It is important that buyers are aware of any additional costs which may be required when purchasing a property. If you have any questions or concerns, we can provide additional information and advice to you regarding your situation. If you would like to discuss your concerns with a legal professional please contact us on (02) 9963 9800 or via our contact form.