NSW progresses to digital conveyancing

NSW progresses to digital conveyancing

The Registrar General of New South Wales (NSW) has declared that from 11 October 2021 (‘Cessation Day’), there will be no more paper certificates of title (“CT”) in the NSW land title system, becoming  entirely electronic instead. The Real Property Amendment (Certificates of Title) Act 2021 will amend the Real Property Act 1900 (NSW) from 11 October in two main ways:

  1. The legal effect of paper certificates of title will be cancelled and the requirement to produce a certificate of title in some land transactions will be removed; and
  2. The electronic lodgement (eConveyancing) of all land dealings in NSW, including leases will be accepted.

Certificate of Title (CT) in the NSW Torrens Title system

In the NSW Torrens Title system, registration of a land dealing in the land registry constitutes conclusive evidence of ownership of property. A CT is a document issued by the land registry to record the owner of the property, as well other interests and dealings held by third parties over the property. However, advancements in technology have now made having rendered the use of actual paper CT unnecessary.  Cessation Day is indicative of NSW’s efforts to convert to an entirely digital conveyancing jurisdiction. This will modernise the NSW land title system, keeping it in line with other Australian jurisdictions including Queensland, South Australia and the Australian Capital Territory who already no longer issue paper CTs. However, the Torrens Title system will continue to reflect the ownership and interests in land.

Effects of the amendment on CTs

All existing NSW CTs for land will no longer be legally valid from 11 October 2021, and no new CTs will be issued. Instead, the NSW Land Registry Services (“NSW LRS”) will issue an Information Notice which will confirm the land title dealings registered and their date of registration. Additionally, in the event of a subdivision or consolidation of land, a new folio of the Register will be created.

But what are the practical implications for landowners?

  • If you are the landowner and hold a paper CT, you do not need to take any action in response to these amendments. We encourage you to keep your CTs to comply with any requisitions or outstanding notices which are not finalised ahead of Cessation Day.
  • If another party is holding the paper CT on your behalf, you may wish to have that CT returned to you. From Cessation Day, under the Real Property Act 1900 (NSW) a court may order for the CT to be returned to the NSW LRS and for the said CT to no longer have a legal effect.

Effects of the amendment on electronic lodgement

From Cessation Day, all dealings listed in the schedule of edealings (which accounts for 99% of all land transactions) must be lodged electronically. Lodging these land dealings in paper form will not be permitted. The remaining 1% of land transactions will need to be prepared on paper but also lodged electronically with a ‘dealing of exception’ attached.

This change to electronic lodgement means that parties to land transactions will need to engage experienced lawyers, such as those at Etheringtons Solicitors, and licensed conveyancers to register their land dealings. Parties will also need to prove that they have a right to deal with the land, which may involve proving your identity with current documentation and establishing your connection to the property from an independent source.

Benefits of digital conveyancing

In the past, CTs have been used to reduce the risk of fraud in the paper system and as security for financing arrangements. The amendments aim to create a faster and more secure process in their stead. The cessation of paper CTs will make land dealing transactions easier and a better experience for all parties. The NSW LRS makes electronic title searches available in a fast, cost effective way to anyone wanting to verify ownership records. This removes the hassle of finding an original paper CT which can be time consuming to locate and replace. All land dealings are now registered online using electronic settlement platforms (including PEXA), making electronic lodgement a logical progression.

How Etheringtons Solicitors can help

A solicitor at Etheringtons Solicitors can provide clarification of the relevant law and its relation to your individual circumstances. If you need further advice or assistance with property law matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.

Enforceable Covenants: Is the land readily identifiable?

Enforceable Covenants: Is the land readily identifiable?

Conveyancing is the process of transferring the legal title of property from one party to another, allowing the purchaser to be notified of any covenants (restrictions or rights) in advance of making their purchase. There are numerous requirements which must be met for a covenant to be enforceable against a purchaser. A recent case in the Victorian Supreme Court highlights the importance of making land affected by covenants readily identifiable, so that the covenant can be enforced.

What is a covenant?

Covenants are the obligations imposed during conveyancing, where the purchaser agrees to abide by the particular rules set out by the vendor relating to the property. There are two types of covenant:

  1. A positive covenant: which requires the owner of a parcel of land to conduct a certain act on or to the property. An example would be having to landscape the gardens.
  2. A restrictive covenant: which restricts the land from being used in a certain way. These types of covenants are far more common and can include things like no fences unless they are of a certain style or color, or no advertising signs to be placed on the property.

Covenants “run with the land”, meaning they apply to all of the successive owners, provided that the covenant benefits the land rather than any particular covenantee. Anyone can create and register a covenant to their property. They may be created by inclusion in a transfer or as set out in a deed agreement between the parties.

Covenants may be extinguished or modified if the owner of the land expressly releases the covenant or does so by implication where the changing nature of the land negates the covenant’s value. They may be extinguished where statute, such as the Conveyancing Act 1919 (NSW), requires the covenant to be released.

Enforcing a covenant

Covenants are enforceable against landowners under both the laws of contract and equity so long as the covenant “touches and concerns” the land, that is, the covenant requires an action that has some effect, direct or indirect, on what happens on the land. To be enforceable, the covenant must indicate that the land is “benefited” or “burdened”, meaning it must contain at least one clause that either includes a positive obligation on the owner or a restriction on the way the land is used.

Additionally, a covenant must touch and concern the land of the covenantee. A covenant which touches and concerns part of the land cannot be extended to benefit the entire land, meaning a covenant which restricts building on 18 acres does not restrict building across the entire 700 acre estate. A subdivision may benefit from a covenant if there was an intention to touch and concern the whole land. However, if the covenant does not benefit the subdivided part, the intention of the parties will be irrelevant and the covenant will be unenforceable.

The land must be readily identifiable to be enforceable: Re Ferraro [2021] VSC 166

In this matter, the Court held that the plaintiff’s land was no longer affected by restrictive covenants as they no longer readily identified the land to which the covenants conferred a benefit.

In 2019, the plaintiff became the owner of a parcel of land with two restrictive covenants preventing her from carrying out certain development plans which included the partial demolition and alterations to the existing dwelling on the land. The covenants were registered in 1907 and 1911 and prohibited the construction of certain structures, required the use of certain materials when building a dwelling house and required any development to be approved by a few named individuals.

The Court, in its findings, upheld the principle that a restrictive covenant will only run with the land if it is given for the benefit of land, not simply for the benefit of a covenantee, and such covenant must touch and concern the land. The wording of the covenants was also examined by the Court and it was found that the ambiguity as to who the transferees were meant that the benefited land could not be ascertained.

Contact Etheringtons Solicitors

We can help you navigate the process to ensure that you are able to obtain good title on any prospective property and that there are no unknown restrictions on the property before you buy. If you need assistance with a conveyancing matter (either buying or selling) or would like more information please call us on (02) 9963 9800 or via our contact form.

The Family Home Guarantee: Helping Single Parents Purchase Property

The Family Home Guarantee: Helping Single Parents Purchase Property

The Commonwealth Government introduced a scheme to support eligible single-parent families to enter the housing market that came into operation on 1 July 2021. Known as the Family Home Guarantee, this scheme is administered by the National Housing Finance and Investment Corporation (NHFIC), a corporate Commonwealth entity established under the National Housing Finance and Investment Corporation Act 2018 (Cth). By guaranteeing a participating lender up to 18% of the property’s value on behalf of the purchaser, the NHFIC allows a single parent to enter the housing market sooner.

What is the Family Home Guarantee?

The Family Home Guarantee (FHG) scheme supports eligible single parents with at least one dependent child to purchase a family home with as little as a 2% deposit as part of the purchaser’s home loan from a participating lender. The FHG is for a maximum of 18% of the property’s value (as assessed by the lender).

The guarantee itself is not a cash payment nor a home loan deposit, but it means that the eligible purchaser will not need to pay lenders mortgage insurance for having less than a 20% deposit. There are no costs or repayments associated with the FHG itself. However, scheduled repayments of the principal and interest of the associated home loan are required for the full loan agreement period, which must be no more than 30 years.

Eligibility for a property purchase with this scheme

From 1 July 2021 to 30 June 2025, 10,000 FHGs will be made available to eligible single parents. To be eligible for this scheme, at the time you are applying you must:

  1. Be an Australian resident who is at least 18 years of age and single – meaning without a spouse (separated but not divorced is not considered single) or de facto partner. This single parent must have a taxable income which does not exceed $125,000 per annum.
  2. Have a least one dependent child living with you – meaning you are the natural or adoptive parent of a child who is either under 18 years of age or 16-22 years of age and receiving a disability support pension, indicating that you are legally responsible for their care, welfare and development. 
  3. Not currently own a home in Australia – meaning you must not currently have a freehold interest in real property, a lease of land or a company title interest in land. It does not matter whether you are a first home buyer or have previously owned a home, as long as you do not currently own a home.
  4. Have the minimum 2% deposit available to pay for the residential property.
  1. Be looking to purchase a residential property – such as a house, townhouse or apartment. The type of home you purchase will determine the time frame of your eligibility. For example, if you are purchasing an existing dwelling, the contract of sale must be signed by you and dated on or after 1 July 2021 but other dates may apply if you are building the home.

Additional property price caps apply depending on your chosen location. In Sydney and regional centres within New South Wales, the property price threshold is $800,000. In the rest of the state, the property price threshold is $600,000. We have prepared another article on the hidden costs of purchasing property to ensure you do not encounter any unexpected costs in this process. Participating Lenders have additional property specific criteria which will affect your eligibility.

Applying for the Family Home Guarantee

All eligible purchasers need to consult with Participating Lenders as all applications for the scheme need to be made directly with them. Seeking legal advice from an experienced solicitor can help with this and also assist you to structure your loan agreement to best suit your personal circumstances.

How Etheringtons Solicitors can help

A solicitor at Etheringtons Solicitors can provide clarification of the relevant property law and its relation to your particular property purchase and individual circumstances. If you need further advice or assistance with property law matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.

Legal Considerations for Heritage-Listed Home Ownership

Legal Considerations for Heritage-Listed Home Ownership

Heritage-listed homes offer a unique glimpse into Australian history and are often filled with beauty and character. Despite the antiquity and romantic features of these homes being a point of value for some, it is important that current or potential owners are aware of the legal hurdles involved when owning or selling a heritage-listed property.

What is Heritage Protection?

If a home is listed on the State Heritage Register, it is recognized as being of historical significance to the state of NSW. Many council areas in Sydney, such as Ku-ring-gai and Hunters Hill, are abundant with heritage listed homes owing to their architectural or cultural value. To find out whether your home or homes near you are heritage listed, you can search the NSW Heritage database here.

A Heritage Conservation Area (HCA) protects an entire area, group of buildings or streetscape with values and characteristics that give it a distinct historical identity. These can include the original purpose or use of the buildings, integrity of the building materials or subdivision patterns. For example ‘The Spot’ in Randwick is a HCA due to its strong sense of identity dating back to its origins as “Irishtown” within the small commercial hub with buildings of character such as the Ritz Theatre.

The Benefits of Heritage Protection

The historical significance and notable architectural structure, which includes unique details and craftsmanship, is what draws many buyers to heritage-listed homes. Depending on the type of home, people may also pay more for the particular, protected style. For example, devotees of modernist classics and Victorian architecture actively pursue these homes and are willing to pay a high price.

Heritage listed property owners can take assurance in the knowledge that a large apartment block or multi-story carpark will not be freely permitted to be built next door, as the neighbourhood and privacy of these property owners are protected. Further, to compensate for some of the maintenance costs involved with heritage properties, homeowners may be eligible for reduced rates for council and land tax. This requires an application through Heritage NSW.

Renovating a Heritage-Listed Property

Despite their sound structural integrity and historical value, heritage protection and HCAs can be problematic if an owner wishes to renovate their property. Heritage protection can be restrictive and owners find themselves facing limitations that wouldn’t exist if their property wasn’t listed. Restrictions contained in the Heritage Act 1977 (NSW) include the following provisions:

  • You can make a heritage-listed property ‘liveable’ by making installations or repairs: You are allowed to make installations or similar adjustments to make the home suitable for modern living, provided that they do not detract from the property’s original appearance. Heritage property owners are obligated to ensure that the Minimum Standards of Maintenance and Repair are being met. Other changes will require an Integrated Development Application to be lodged with the local council or directly with the Heritage Council. Generally, upon lodging an application home owners may install contemporary kitchens or bathrooms but the structure of the home and the street façade must be preserved.
  • Emergency Fund: Older homes do come with the risk of hidden structural damages or other unpleasant discoveries. It is recommended that you keep an emergency maintenance fund in order to make necessary repairs. Home owners can apply for Emergency Works Grants through Heritage NSW for an amount up to $10 000 to address damage incurred during a natural disaster or emergency event, or for work directly related to a heritage benefit.

Valuing Heritage-Listed Properties

Owing to the above restrictions/provisions, there is a concern that a heritage listing will result in lower land values, as potential buyers will not be able to extend or modify their home. Heritage listings can also prevent existing home owners from making alterations or renovations that may markedly increase the value of the property.

Heritage listed homes can often attract more expensive insurance premiums due to the higher risk and cost of restoration and repair. Specialist insurance policies may be required to insure your home is not underinsured.

It is also important to note that a heritage valuation is based on the existing use of the land rather than its zoned development potential. For example, a house would be valued as a dwelling house, even if that property is located in a commercial or residential flat zone. However, a Productivity Commission study recently found that a heritage listing in the North Shore of Sydney can add 12% to a home’s market value.

Contact Etheringtons Solicitors

It is crucial to properly assess the potential benefits and consequences of a heritage listed property before making a financial commitment. As a property owner it is important that you are well informed about factors that may affect the value or structure of your home. At Etheringtons, we can assist you with your property law needs to ensure the best outcome for you and your family. Should you have any further questions, please do not hesitate to call (02) 9963 9800 or via our contact form.

What is Compulsory Acquisition?

What is Compulsory Acquisition?

New infrastructure in Sydney is continuously being developed to keep up with the demands of a growing population. To build such infrastructure, a public authority – such as the New South Wales government or a local council – may compulsorily acquire some or all of your property to create the space necessary for new construction. Some recent examples include the WestConnex project and the Victoria Cross Metro Station in North Sydney.

Why should I get legal representation?

Compulsory acquisitions can leave property owners feeling frustrated and helpless, and it can be an upsetting and confusing time. However, it is important to know you may have more power than you may think. An experienced solicitor can work with you to ensure you obtain the best compensation for your loss of property. A solicitor’s reasonable legal fees for assisting you in the acquisition process will be covered by the acquiring authority so you will have peace of mind knowing that you will not have to pay for the work performed in receiving advice.

A solicitor can help you through:

1. Finding out what your property is really worth

A solicitor will help you engage experts who can accurately calculate your property’s financial value. The public authority acquiring your land will retain a valuer to estimate what they believe your property is worth, but is often skewed towards the acquiring authority, which may not reflect your property’s true worth. It is important that you engage a solicitor who can help you ascertain a value that is more favourable to you.

2. Ensuring you receive the maximum payment

There are a number of costs associated with the compulsory acquisition of your property including conveyancing fees and real estate agents’ commission (for the purchase of a new property) and removalist costs as well as legal fees (for the acquisition of your property). The purpose of the compensation provided by the acquiring authority is to leave you in the same financial position you would have been in but for the acquisition. A solicitor will ensure that compensation includes the hidden costs of acquisition that are often unrecovered.

3. Negotiating on your behalf

A solicitor can help you to prepare for negotiations with the acquiring authority. Even though the acquiring authority will send you an initial offer, your solicitor can assist you with your negotiations to ensure that you receive a fair dollar amount for the acquisition of your property. Your solicitor will act on your behalf throughout the discussions and negotiations with the acquiring authority to ensure you achieve the best result.

4. Putting together your claim

Your solicitor can assist you with putting together all aspects of your claim to present to the acquiring authority. They can also ensure that you will present a counter offer which is well-supported and well-documented so that you have the best chance of achieving a fair result.

5. Guiding you through the process

One of the many benefits of engaging a solicitor through this process is that they will support you every step of the way and you can feel assured that you are in capable hands.

Etheringtons Solicitors has acted in numerous compulsory acquisitions cases for our clients, including for properties acquired for the Victoria Cross Metro Station in North Sydney, Martin Place and Pitt Street Metro Stations in Sydney CBD and Waterloo Metro Station in Waterloo. If you have been or think you will be affected by a compulsory acquisition and would like assistance in ensuring you are provided fair compensation, please contact us on 9963 9800 or via our contact page here.

Risks of Buying Off-the-Plan

Risks of Buying Off-the-Plan

For a long time, the ‘Great Australian Dream’ has been to own property. It is usually the largest asset you will own and provides you with a sense of freedom. However, this could be more akin to a pipe dream for some of us due to the huge price tags associated with home ownership. If this is you, you may think an off-the-Plan (“OTP”) property may be the alternative you are looking for. However, OTPs can carry some significant and inherent risks.

What Does Buying off-the-Plan Mean?

When you buy off-the-plan you commit to buying a property before it has been built. In general, prices are cheaper than buying an existing unit. One other benefit is that you will move into a brand new property. Most developers will have mock-up displays or presentations to show you what it will look like once built. However, you can’t be sure exactly what you’ll end up with.

Flexible Contracts

The interests of developers can be quite different to your interests as a buyer. Developers want as much freedom as possible in the terms and conditions of the contract. This is so they can make changes to the plans later. For example, their display model of the building might have parking allocated in a certain way. If this is not specified in the contract’s terms and conditions they can change this at a later date.

Restrictions of Use

When buying off-the-plan units they often come with restrictions on their appearance (covenants) and use (easements). For example, the external colours might be mandated. Make sure you check the contract for these restrictions.

Risk of Delays

When looking at buying off-the-plan you will be given an estimated time of completion. This could change due to unexpected circumstances. For example, suppliers could be out of stock or renting equipment delayed. Prepare for delays; make sure you have somewhere to live until your unit is complete.

Risk of Non-Completion

With OTPs there is also a risk that the building will not be completed and your contract becomes terminated. Lenders such as banks might provide developers with a preliminary loan approval before construction starts. The loan is likely to have conditions, such as selling a minimum number of units. If the developers can’t meet the conditions the loan won’t be granted and construction can’t continue. There are several reasons a contract might be terminated, which you should discuss with a solicitor.

Get legal advice

If you are looking to purchase an off-the-plan apartment we recommend you discuss the risks with a solicitor. We can provide advice and help negotiate the terms of the contract in your favour. For more information, please contact us on (02) 9963 9800 or send a message via our contact form.