Keeping Pets in Strata Schemes

Keeping Pets in Strata Schemes

Keeping Pets in Strata Schemes – Can You Have Pets in an Apartment?

Have you ever been forced to choose between keeping your pet and living in a strata building? You are not alone. Did you know that Australia has one of the highest household rates of pet ownership in the world? Yet more and more Australians are living in apartments and townhouses, where their strata schemes may not allow pets.

In this article, we explore the NSW Strata laws in relation to keeping pets in a strata building. But first, a quick recap of strata schemes.

Strata Laws, By-Laws and Owners Corporation

If you live in an apartment or townhouse, then you are probably living in a strata scheme. The Strata laws (Strata Schemes Management Act 2015 (NSW) regulate an Owners Corporation’s rights and responsibilities. All the owners in a strata scheme make up the Owners Corporation.. Owners Corporations can adopt the model by-laws that are set out in the Act, or they can amend them or write their own.

Can I Keep My Pet in a Strata Scheme?

This depends on the by-laws that apply to your strata scheme.

Previously, the model by-laws excluded pets unless the owner was given permission. The new strata laws amended the model by-law to be more pet-friendly, as it encourages schemes to allow pets rather than ban them altogether.

The new model by-law for pets includes two options for new schemes to choose from:

  1. Option A– An owner or occupier may keep a pet if they give the Owners Corporation written notice.
  2. Option B– An owner or occupier may keep a pet with the written approval of the Owners Corporations. The Owners Corporation cannot unreasonably refuse the owner or occupier permission to keep their pet.

What if I am a tenant living in a strata scheme?

If you are either a prospective tenant or currently a tenant living in a strata scheme, you will still need permission from your landlord to keep a pet in your apartment or townhouse.

Seek Legal Advice

It is important to be fully aware of your obligations under your strata scheme in relation to retention of pet. If you would like further information regarding strata schemes or general strata law advice, please do not hesitate to contact one of our experienced solicitors on 9963 9800 or via our contact form here.

The Five Step Approach to Property Settlement after Separation

The Five Step Approach to Property Settlement after Separation

One of the fundamental issues which require addressing during the process of a breakdown of marriage or de-facto relationship is the subject of a ‘property settlement’. A property settlement is an arrangement which is made between the separating parties when dividing assets, liabilities and financial resources (such as a trust, bank deposits or future inheritance). There is no presumption in family law whereby each party receives an equal division of assets in a property settlement.

Each case is unique and varies depending on a set of circumstances which are set out in in the Family Law Act 1975. For this reason, property settlements should be approached in a bespoke manner to ensure a just and equitable result in achieve for the parties. In assessing this criteria, there are five steps that the courts consider when parties are contemplating a property settlement at the end of a marriage or de-facto relationship. This article will explain these 5 important steps.

The Five (5) Step Approach:

Step 1: Identify the assets available for division

The first step is to determine the net asset pool of the relationship. This will involve identifying whether the current assets and liabilities of each party are held jointly with the former partner or separately.

It is prudent that parties provide full and frank disclosure of their personal property, including real estate, vehicles, furniture, shares and bank accounts, as required by the legislative principles. It is also important that parties account for other financial resources such as whether they are beneficiaries under a trust or a Will. Whether a property forms part of the main asset pool to be divided will depend on the degree of control and interest exercised by each party.

Similarly, joint liabilities must also be taken into account, including mortgages, personal loans and credit card balances.

Step 2: Contemplate whether it is ‘just and equitable’ to make an adjustment

The Court must then consider whether it is ‘just and equitable’ to intervene and make any adjustment to the property division before assessing individual contributions by the parties.

Step 3: Consider the contribution of each party to the relationship

Both financial and non-financial contributions made by each party will be assessed by the Court. This includes contributions from the time of commencement of co-habituation through to after separation.  The main categories of contributions are recognised as follows:

  1. Financial

Monetary contributions made during the relationship, including:

  • Income and wages;
  • Property acquired during the relationship;
  • Assets owned at the commencement of co-habitation;
  • Gifts and prize winnings;
  • In some cases, inheritances.
  1. Parent/Carer and Homemaker

Contributions to the welfare of the family are significant and can be seen as equal compared to a party working full-time. Some examples include:

  • Caring for children;
  • Caring for elderly;
  • Homemaking;
  • Housework;
  • Cleaning;
  • General parenting responsibilities;
  • Grocery shopping and cooking;
  1. Non-financial

This category recognises that non-financial value can be contributed to the relationship.

  • Renovations or landscaping work done to the family home or an investment property;
  • Unpaid work in a family business;
  • Contributing to start up a business.

Step 4: Identify the future needs of each party

After assessing the contributions of each party, the Court must have regard to the current and future needs of each party to the relationship. The factors which the Court considers are detailed in Section 75(2) of the Family Law Act which include:

  • Age and state of health;
  • Income and future earning capacity;
  • Property and financial resources;
  • Parental responsibility of children;
  • Caretaking responsibilities;
  • Duration of the relationship or marriage.

Step 5: Review whether the final proposed division is ‘just and equitable’

In the final step, the Court will consider whether the proposed percentage distribution and allocation of assets and liabilities is fair. In this step, the Court may consider making an adjustment under section 75(2) of the Family Law Act which may vary the end result.

Seek Legal Advice

Property settlement and family law proceedings can often be complex. If you would like further information regarding property settlements or if you have any general family law enquiries, please do not hesitate to contact one of our experienced solicitors on 9963 9800 for a confidential discussion or via our contact form.

Residential Leases during COVID-19: What You Need to Know

Residential Leases during COVID-19: What You Need to Know

Coronavirus has undoubtedly had a substantial impact on the Australian economy. This unfortunately means that some residential tenants are struggling to keep up with their rental payments, due to increased unemployment or standing downs. However, the NSW government is introducing measures to support landlords and tenants and encourage them to work together through this difficult time. In this article, we explore some of these measures to help you understand landlord and tenants obligations under these new initiatives.

New Measures:

The new measures include an interim 60 day stop on landlords issuing termination notices or applying for a NSW Civil and Administrative Tribunal eviction order due to rental arrears, where tenants are financially disadvantaged by COVID-19. This will be followed by limitations for 6 months for rental arrears evictions for tenants financially disadvantaged by COVID-19.

For Tenants:

To meet the requirements for the 60 day stop on evictions, residential tenants needs to demonstrate that they are impacted by COVID-19. A household is impacted by COVID-19 if:

  1. one or more rent-paying members of a household have lost employment or income (or had a reduction in employment or income) due to COVID-19 business closures or stand-downs, or
  2. one or more rent-paying members of a household have had to stop working or reduce work hours due to illness with COVID-19 or due to COVID-19 carer responsibilities for household or family members, and
  3. the above factors result in a household income (inclusive of any government assistance) that is reduced by 25% or more.

What are the obligations for a tenant?

  • To be honest and act in ‘good faith’ in negotiations with their landlord
  • Provide the landlord with relevant information and proof regarding their situation if they have been impacted by COVID-19
  • Tenants should have regard to the landlord’s financial situation, including whether they rely on the income to cover expenses such as mortgages
  • Tenants must work towards achieving a mutually satisfactory outcome.

All tenants who are not impacted by COVID-19 are expected to honour their existing tenancy agreements and continue to pay all rent and charges in full.

For Landlords:

It is important for landlords to have regard to the tenant’s situation and be considerate of the financial burdens they are facing due to COVID-19. However, this must be weighed against the landlord’s personal financial situation and how a rental reduction may impact their income.

What are the obligations for a landlord?

  • To negotiate a rent reduction if their tenant has been impacted by COVID-19
  • Landlords can only seek to give a termination notice or apply for an eviction after the interim 60-day stop if it is fair and reasonable in the context of the specific case
    • Only after negotiations have failed can a landlord seek to terminate the agreement. The NSW Civil and Administrative Tribunal (NCAT) will have discretion to assess whether it is fair and reasonable to evict in the circumstances of each case
  • To be honest and act in ‘good faith’ in negotiations with their tenant
  • Landlords should be honest and frank about their financial situation, including whether they rely on the income from the tenant to cover expenses such as mortgages
  • They must work towards achieving a mutually satisfactory outcome with the tenant.

Fair Trading will also be able to assist landlords and tenants trying to reach an agreement if needed.

Further Information

It is important to be fully aware of your obligations under your residential lease agreement. If you would like more information on how we can assist you with your matter, do not hesitate to contact us on 9963 9800 or via our contact form. Check out our blog here for further more information and analysis on the restrictions and rules in place during COVID-19.

How will COVID-19 impact your property settlement?

How will COVID-19 impact your property settlement?

Falling asset prices, changed court procedures and a pessimistic future economic outlook are valid factors which may negatively impact the outcome of your property settlement. Within the context of the COVID-19 pandemic, you should consider whether it is possible to put your property settlement on hold. If you decide to continue with a property settlement, be aware of the risks in relation to asset valuations, and consider the following three points.

1. Use percentages for the division of your assets

The financial crisis caused by the pandemic has resulted in a sharp drop in the value of shares, property, interest rates and superannuation. There is a way that you can still obtain a fair division of the assets that are included in a property settlement by using percentage division instead of predetermined dollar value.

In the case of property, there is a risk that the sale price does not reach the expected value due to the current limitations on open houses and the cautious buyer sentiment. For example, if orders were drafted so that the sale proceeds of the family home were split where one party receives the first $150,000 and the other receives the remaining sale price, the parties would be disadvantaged if the house sold for less than expected.

The better alternative in times of economic uncertainty is to divide the sale proceeds between the parties by way of a percentage split. In the previous example, one could allocate 65% to one party and 35% to the other party. This is a more realistic approach and enables both parties to bear the risk of an unsettled economy. However, you should still seek financial advice from a professional as to whether it is the best time to liquidate your assets or sell your property.

2. Take advantage of alternative dispute resolution

Due to health concerns and social distancing, the courts have delayed hearing non-urgent matters, which may result in the prolonged delay of hearing your settlement matter. However, alternative dispute resolution options remain open, including mediation and settlement conferences. The options of negotiation and mediation settlements have opened more time and cost effective pathways to resolving property settlements during this time.

There are a variety of technological tools available to facilitate alternative dispute resolution including Zoom, Skype and telephone conferences. Ultimately, this means that parties in property settlement matters, including their legal representatives, are able to participate in mediations without putting themselves and the health of others at risk.

Once you come to an agreement, this can be finalised by way of consent orders filed in court. Currently, consent orders may be filed online with the court electronically. Most courts are not allowing in-person attendances due to the COVID-19 restrictions.

3. Wait to value your business

In light of the economic turndown and closure of many non-essential businesses, it may be best to place potential valuations of businesses on hold until the economy recovers. Even if you have experienced profitability in the previous years, it is likely, due to the pandemic, that losses have resulted from reduced demand, office closures, staff being let go or stood down (see our article on standing down employees here) and affected supply chains. Some industries have experienced profit during this time, and if this is the case of your business it could be the perfect time to seek a valuation. We advise that you seek financial advice as to whether this is the best option for you.

Further Information

We know that a fast and cost-effective resolution is the most desirable in the circumstances. If you would like more information on how we can assist you with your property settlement matter or any other family law matters, do not hesitate to contact us on 9963 9800 or at law@etheringtons.com.au.

Commercial Leases during COVID-19: What You Need to Know

Commercial Leases during COVID-19: What You Need to Know

There has been a lot of dialogue in the media regarding the Federal Government’s initiatives to combat the impact of COVID-19 on Australian businesses. It can be confusing to understand what exactly your responsibilities are as a tenant or landlord in the circumstances.

In this article, we break down these initiatives for you and explain your responsibilities as either a landlord or tenant during these uncertain times.

Tenancies

The Mandatory Code of Conduct (the Code) applies to commercial tenancies, including properties which are:

  • retail
  • office
  • industrial

For Tenants

The Federal Government announced the introduction of the Mandatory Code of Conduct (the Code) which will apply to commercial leases for eligible small to medium enterprise (SME) tenants.

How do I know if I qualify?

The Code will apply to SMEs that:

  1. are suffering ‘financial stress or hardship’; and this means that you must demonstrate the ‘company’s inability to generate sufficient revenue as a direct result of the COVID-19 pandemic that causes the tenant to be unable to meet its financial and/or
    contractual commitments’
  2. are eligible for the JobKeeper program; and
  3. have an annual turnover of up to $50 million.

What are my obligations under the Code?

  • You must remain committed to the terms of your lease (subject to any changes to the rental agreement as a result of negotiations with your landlord due to the Code).
    • Any failure to not properly abide by the terms of your lease will mean you forego any protections provided to you as a tenant under the Code.
  • You must negotiate in good faith.
    • This means to act in a sincere and fair way to ensure your interests as well as your landlord’s interests are considered.
  • Provide accurate information.
    • It is your responsibility to provide truthful financial information for the purposes of negotiation with your landlord. For example, you must provide evidence of your financial position such as accurate turnover figures and other relevant financial statements.
  • You must have regard to your landlord’s financial situation and ability to provide additional waivers and deferrals of rent.
  • Pay back your rental deferrals.
    • Payment of rental deferrals by the tenant must be paid in instalments or transferred over the balance of the lease term and for a period of no less than 24 months.
  • Consider your insurance policy.
    • Contact your insurance provider to find out whether your insurance policy will apply in the current conditions.
  • You must work towards achieving a mutually satisfactory outcome with your landlord.

For Landlords

Once the Code takes effect, ‘eligible’ tenants may be able to receive rent reductions, either in the form or waivers or deferrals by their landlords. A “waiver” means the liability no longer exists, whereas a “deferral” means the liability remains but is paid later.

What are my obligations under the Code?

  • You must offer tenants proportionate reductions in rent payable in the form of waivers and deferrals of up to 100% of the amount ordinarily payable, based on the decrease in the tenant’s trade and profit during the COVID-19 pandemic period.
    • Rental waivers must constitute no less than 50% of the total reduction in rent payable.
    • Tenants may decide to waive the requirement for a 50% minimum waiver by an agreement with you.
  • You must not terminate your lease with your tenants due to non-payment of rent during the COVID-19 pandemic period.
  • You should provide to the tenant an opportunity to extend their lease for an equivalent period of the rent waiver and/or deferral period.
    • This is intended to provide the tenant additional time to trade, on existing lease terms, during the recovery period after the COVID-19 pandemic concludes.
  • You must discuss relevant issues to the tenancy, negotiate appropriate provisional leasing arrangements, and work towards attaining a mutually satisfactory outcome for you and your tenant.
  • You must act in an open, honest and transparent manner.
  • You must provide adequate and correct information within the context of negotiations.
  • You must communicate and pass on any reduction in charges (e.g. land tax, council rates). This is important if the lease obliges the tenant to contribute to “outgoings”.
  • You should, where appropriate, attempt to waive recovery of any other expense (or outgoing payable) by a tenant, under lease terms, during any period in which the tenant is not able to trade.
  • You must agree to a freeze on rent increases for the duration of the COVID-19 pandemic (except for retail leases based on turnover rent).

A copy of the Mandatory Code of Conduct can be found here.

Further Information

It is important to be fully aware of your obligations under your commercial lease agreement. If you would like more information on how we can assist you with your matter, do not hesitate to contact us on 9963 9800 or at law@etheringtons.com.au. Check out our blog here for further more information and analysis on the restrictions and rules in place during COVID-19.

Etheringtons Solicitors extends our deepest sympathies to those experiencing hardship or health concerns during this difficult time. Further information about COVID-19 can be found at: www.health.gov.au.

COVID-19: Commercial and Retail Leases

COVID-19: Commercial and Retail Leases

Due to the recent outbreak of COVID-19, businesses and individuals are being forced to navigate a myriad of challenging issues which they have never had to face before. One of the most common questions businesses may ask is “I need to shut my business but what happens to the leases?”

To answer that question, the starting point is your lease agreement.

Tenant perspective

Businesses which rely on overseas supplies, tourists and overseas students, are experiencing a significant disruption in operations and a major decline in revenue. This will not only put a strain on their ability to deliver products but also on the cash flow thus making it challenging to keep the business afloat. In these circumstances, businesses are considering shutting their operations until the COVID-19 crisis is over.

Rent is a major expense for most businesses – particularly for retail shops in shopping centres. Tenants may be bound by long term leases which do not provide for early termination. One may look to the doctrine of frustration of contracts. Frustration of contract occurs when an event (beyond the parties’ control) occurs that makes the performance of the contract impossible. A frustrating event will end the contract early and allow each party to be discharged from future performance of the contract. Is COVID-19 a frustrating event? Frustration is incredibly difficult to prove and it is unlikely that a court will find COVID-19 to be a frustrating event but it depends on the circumstances of a particular case. If the government orders a lockdown, whilst difficult to prove, there may be an option for one of the parties to argue frustration.

‘Force majeure’ means an unforeseeable event that prevents you fulfilling a contract. Force majeure clauses allow parties to a contract to end the contract early where a party is affected by an unavoidable or unforeseen event such as destruction of premises or a natural disaster. Typically leases do not contain force majeure clauses. If it does, however, the clause may list lockdown as one of the force majeure events. If the government orders shopping centres to close in order to slow down the spread of virus, it may constitute a force majeure event allowing early termination.

Force majeure clauses are contractual terms which the parties agree upon execution of contract. They are express terms which cannot be implied. Frustration, on the other hand, is a common law principle.

You may want to continue operating, however, your landlord may decide to shut the building to prevent the spread of COVID-19. Your lease agreement should contain a clause in a tenant’s favour allowing a reduction in rent if you cannot reasonably access the premises. You may also consider a claim against your landlord for breach of quiet enjoyment of the premises.

Landlord perspective

Your tenant may unilaterally decide to shut their business or store due to spread of COVID-19 and demand a rent relief for the period of closure. Tenants do not have a right to unilaterally shut their business and demand rent relief, without an express condition in a lease allowing the tenant such a right unless they can successfully argue ‘frustration’ or ‘force majeure’.

Your retail tenant will be required to shut if the government requires retail shops to close. Both parties are required to adhere to notices or orders issued by public and statutory authorities. A failure to comply with government notices or orders constitutes a breach of your lease.

You tenant does not have a right to withhold rent under any circumstances. Recently, however, in response to the COVID-19 outbreak, legislation has been passed to regulate or prevent the exercise or enforcement by a retail lessor of a right that they have under the lease or the Retail Tenancies Act or Retail Leases Act. This includes prohibiting a lessor from taking possession of the premises. These measures will last no longer than six months commencing 25 March 2020.

Practical approach to leases

As the COVID-19 situation is evolving daily, we recommend that you check your lease documents and consider the actions you should be taking to minimise the damage to your business, if you are a tenant; or to your investment, if you are a landlord. You should also be reviewing your insurance policies to ascertain what losses are recoverable under your policy, if any.

Further information

If you would like further information regarding leases or simply corporate and contract law advice, please do not hesitate to contact one of our experienced solicitors on 9963 9800 or via email at law@etheringtons.com.au