Jun 18, 2022 | Property Law
A survey report is commonly requested during conveyancing. It shows any recent improvements on a parcel of land, the boundaries of the property, and the dimensions of the property (including aspects such as fences, garages, and pools). To put it simply, a survey report allows the purchaser to see issues that they could not observe from a physical inspection of the property.
What are the benefits of survey reports?
Issues involving fences are a common problem that a survey report can highlight. In theory, a fence is a physical representation of the outline and extent of your property. However, in practice, fences are not always accurate in defining the boundary of your property and may encroach on neighbouring properties. The survey report will highlight this and will make the purchaser aware if there is an encroachment from a fence onto or by a neighbouring property.
The survey report will also show if there are any easements between multiple properties that are not registered on the title. A common example of an easement would be a common driveway that is shared between two properties. One property may legally own the driveway, and the other has been granted an access easement over the driveway so they may use it as well. Easements pass with title, and thus it is necessary for any new purchasers to be aware if there is an easement on their property, or if their property has access to an easement. If there is no easement registered, then a transfer granting an easement may need to be lodged to ensure that the easement is recorded on the title. A surveyor will assist with this by preparing a plan to be lodged with the transfer granting an easement.
Another important part of a survey report is that it sets out the distances and measurements of improvements. This will allow a purchaser to see if the property is compliant with the local council’s regulations. If there is a possibility of non- compliance, then the purchaser can apply to the Council for a building certificate. This allows the Council to inspect the property and see if the improvements on the property meet its requirements. An up-to-date survey report is required to obtain a building certificate from the Council. Building certificates prevent the Council from making any orders relating to that improvement.
Get legal advice
These are common examples of issues that a survey report can expose. It enables a potential purchaser to become more aware about the nature of the property that they are buying and remember that an informed purchaser is always a good purchaser. To discuss your property matter, please contact Etheringtons Solicitors on 9963 9800 or via our contact form here.
Jun 17, 2022 | Family Law, Property Law
When parties separate, it is important to make sure that assets are protected before a family law property settlement is formalised. One way that matrimonial assets can be protected is through the lodgment of a caveat.
What is a caveat?
A caveat is a note that is recorded on the title of a property that protects any interest that the maker of the caveat may have on the property. This notice can be used as a way to delay a property transaction. If your ex-partner is the registered owner, a caveat can prevent them from adversely dealing with the property such as by selling, transferring, mortgaging or encumbering it until the court has determined whether you have an interest in the property. A person who lodges a caveat is known as the ‘caveator’.
When should a caveat be lodged?
A caveat may be lodged if a party has a caveatable interest in the property. This may occur if both parties to a relationship have an interest in the property but there is only one party’s name on the title of the property. This interest may be present if, for example, both parties contributed to paying the mortgage or have contributed to the property through other means throughout the relationship. This can include non-financial means such as property maintenance. If the person making these contributions does not have their name registered on the title of the property, then it is likely that they will not gain any benefit from that property, if it were to be sold by the proprietor.
How is a caveat lodged?
A caveat is lodged by way of a caveat form, which can be completed for electronic lodgment by a solicitor or conveyancer, or in hard copy with NSW Land Registry Services. Basic requirements of the caveat include the name and address of the person lodging the caveat, the name and address of the person who owns the property and the interest claimed by the person lodging the caveat. It is important to complete the caveat correctly the first time as once it is lodged as you cannot lodge another caveat on the same grounds unless you are granted leave by the court.
What happens after a caveat has been lodged?
Once a caveat is lodged NSW Land Registry Services will then examine the documentation, and if an interest is adequately made out, they will record the caveat against the title of the property. They will then serve notice to both the caveator and the registered proprietor of the property. Subsequently, the registered proprietor will be entitled to serve a lapsing notice on the caveator, requiring them to commence court proceedings immediately in order to establish their interest to that property. Failing to attend to this within fourteen (14) days will result in the caveat lapsing.
How do you remove a caveat?
A caveat can be removed by bringing an application to the Registrar of Titles. This application must be in writing, and have a supporting certificate signed by a legal practitioner. This application must also include a statement confirming that the caveator does not own the property and has no claim to it. If proceedings are not commenced by the caveator to protect their caveat, then the caveat will lapse after three months as a result of the application lodged with the Registrar. Once the caveat has lapsed the owner of the property can then lodge a form to formally remove the caveat.
Family law matters can get very complex. Get Legal Advice.
When drafting a caveat, it is important all proper protocols are followed to ensure that the caveat is permitted by the relevant authority.
Our experienced family lawyers are ready to assist you with your matter and take the stress out of your divorce or other family law matters. If you need any assistance please don’t hesitate to contact Etheringtons Family Lawyers in North Sydney via this form or on 02 9963 9800.
Jun 11, 2022 | Property Law, Strata Law
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. Australia has one of the highest household rates of pet ownership in the world, and yet more and more Australians are living in apartments and townhouses, where strata schemes may prohibit 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:
- Option A– An owner or occupier may keep a pet if they give the Owners Corporation written notice.
- Option B– An owner or occupier may keep a pet with the written approval of the Owners 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 or current living in an already established 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.
May 15, 2022 | Property Law
The usual procedure in contracts for sale of land
During the usual procedure for the exchange of contracts for a property, the purchaser gives to the vendor’s agent the cheque for the deposit. The deposit is consideration given by the purchaser to the vendor and it is what makes the contract valid. The amount can vary, but is usually 10% of the purchase price. This is typically held in the trust account of the vendor’s selling agent, or in some cases by the vendor’s solicitor. On settlement, the purchaser’s solicitor sends an order to the selling agent (via the vendor’s solicitor) to authorise the release of the deposit to the vendor. The selling agents will deduct their commission from the deposit and the balance is released to the vendor.
Release of Deposit Clauses
A release of deposit clause is sometimes requested before the contracts exchange. This clause allows for the vendor to have access to the deposit funds before completion. This is usually requested because the vendor wants access to the funds to use in their own property purchase. The funds can be used to either pay for stamp duty or to pay for the deposit on a property the vendor is purchasing. The funds may also be requested to be released simultaneously with settlement because the mortgage balance on discharge is higher than the balance payable on settlement. On some occasions, the estate agent will ask the vendor to request it, so they are able to get their commission quickly.
The release of deposit clauses are heavily cautioned by the Law Society. The reason why the release of deposit clause is discouraged is because it can become difficult to recover if the contract falls over because of the actions of the vendor. The recovery can have significant legal costs involved. Some of the situations which can occur where it may be difficult to recover the deposit are if the vendor dies, or they go bankrupt.
Get Legal Advice
It is important to seek the advice of a solicitor about these issues if you are going to purchase a property. 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 message us here.
May 14, 2022 | Property Law
Disclaimer: Since the publishing of this article, the New South Wales State Government has announced a 20 year plan to replace stamp duty with a property land tax. Please use caution if you are citing legislative material from this article as laws are subject to change. We recommend that you seek the most up-to-date law.
Avoiding the Hidden Costs of Buying a House
Buying a property in Sydney is expensive enough as it is – don’t leave yourself open to the hidden costs of buying a house. Here are 5 issues you should consider before purchasing a property, to avoid unexpected costs.
1. Capital Gains Tax
If you are purchasing an investment property, you should always be mindful of being liable for Capital Gains Tax (CGT). CGT applies when you sell your property, if you’ve rented it out.
If you rent out a property for a few years to help with the mortgage and then decide to move into the property, you should only be liable for CGT for the time the property was rented out. There is a CGT discount method, which means that by living in a property for 12 months, you can reduce your capital gains liability by 50%.
2. Stamp Duty
Stamp duty is a levy charged on the transfer of land in New South Wales. It needs to be paid before the completion of the contract can occur. The amount is based on the purchase price of the property, and payable within three months of the contract date (the date of exchange). There is an exception for off-the-plan properties, whereby it can be delayed by twelve months.
Stamp duty can be a large sum and it is important that you factor in this amount when purchasing a property.
3. Organising Your Finances
Once you have exchanged contracts (both you and the seller have signed) you will be bound to complete the contract on or before settlement. You should liaise with your broker or receive some form of pre-approval from your financier before you purchase a property. If the preparation of the financial approval and the signing of the loan documents is left to the last minute, it can delay settlement. If you delay settlement you will become liable to penalty interest on the balance of the purchase price.
The seller may also be able to rescind the contract, meaning you will lose the property and your deposit. It is therefore vital that you liaise with your broker or financier to ensure that the finances will be ready in time for settlement.
4. Pest & Building Report
An informed purchaser is a good purchaser, which is why it is important to obtain a pest & building report from a reputable company. The report lists the issues and damage that is found on the property and the cost in repairing it. This is important for a purchaser as it will show the additional cost behind the purchase of the property — detailing pipes and cracked tiles that will need to be repaired, as well as any leakages or dampness around the property. It will also show if there is any evidence of termite or other insect damage to the property. Relying on a set of reports supplied by the selling agent can have its risks, that is why we recommend using an independent builder who has a reliable track record.
5. Survey Report
A survey report is useful for houses or vacant land. It shows the boundary of the property so you know if the neighbour’s fencing or structures encroach onto your property or vice versa. This can also be useful for a purchaser who will be building a structure on the property and will require council approval, as this is one of the important documents the council will need.
Consulting a Solicitor
These are some of the issues that can befall home buyers. It is important that a prospective purchaser speak to a solicitor who knows the process and can help the purchaser navigate these issues. To discuss your property matter, please contact Etheringtons Solicitors on 9963 9800 or via our contact form.
May 13, 2022 | Property Law
If you are a director of a company entering a commercial or retail lease, a landlord will likely require you to give a personal guarantee for the company’s obligations under the lease. In such cases, directors should fully comprehend the extent of the guarantee they are providing and obtain appropriate legal advice to minimise financial exposure.
There are two court cases that are important reminders of the risk that a director takes when guaranteeing the performance of a company’s obligations.
In Lin v Solomon [2017] NSWCA 328 the landlords were entitled to recover personally from the guarantor after the lessee company defaulted under the lease. The landlords, who owned the CircaRetail Shopping Centre at Bella Vista, were awarded damages comprising unpaid rent, outgoings, contributions to the retail centre’s promotional levy and GST.
The guarantor claimed that he was ‘induced to enter into the guarantee of the lease by misleading and deceptive representations’ made by the leasing agent. The alleged misrepresentations were that the leased premises, comprising a newsagency, would soon attract increased foot traffic due to the predicted employment of some 1,500 people at a nearby site.
The Court found the misrepresentations as pleaded were not established and, in any event, there would have been no reliance on such representations as the guarantor was an experienced newsagent. In fact, apart from paying a deposit and providing a bank guarantee, the lessee company failed to make any lease payments or outgoings under the five-year lease which commenced in May 2009 and was terminated by re-entry by the lessors in December 2012. The primary decision was upheld on appeal and the guarantor was ordered to pay the respondents the sum of $602,178.35 plus interest and costs.
In NB2 Pty Ltd v P.T. Ltd [2018] NSWCA 10 the lessee challenged the primary judge’s decision to award payment of damages to the landlord after the lessee company breached the lease. The lessee had entered a ten-year lease for a fruit and vegetable shop at Westfield Shopping Centre, Miranda. After the lessee failed to pay rent, the lease was terminated by the landlord who then sued the lessee company and the guarantors under the lease.
In the primary hearing, the appellant claimed that it had been misled by the landlord during negotiations after expiry of its previous lease, when it promised the lessee exclusivity as the ‘sole independent speciality fruit and vegetable retailer’ within a defined area at the centre. Subsequently, nearby Franklins re-opened its refurbished premises selling fresh fruit and vegetables, which detrimentally affected the lessee’s turnover.
The alleged misrepresentations were not made out. The Court considered that the expression ‘sole independent fruit and vegetable retailer’ did not constitute retailers such as Franklins as it was not a ‘specialty retailer’. The primary judge entered judgment in favour of the landlords for $3,537,040.50 against the two directors of the lessee company. This was upheld on appeal and the appellants were ordered to pay the respondent’s costs.
Joint and several liability
As many companies have more than one director, both or all directors are usually required to guarantee the company’s performance of a contract with a third party. In such cases, it is important to understand that the third party will be able to call upon either one or all of the joint guarantors for the outstanding liabilities of the company.
The third party need not exhaust all options to recover the debt against the company and will usually pursue the director/s in the most favourable financial position.
Directors who give guarantees should seek legal advice regarding appropriate asset management to safeguard personal assets.
Conclusion
A guarantor is at considerable risk of personal exposure if the company is unable to meet its responsibilities under a contract, and in such cases may face financial disaster.
Personal guarantees for lessee companies can seldom be avoided. However, the risk for guarantors may be minimised by paying a higher bond or arranging a bank guarantee in exchange for limiting the guarantor’s financial exposure. Companies and their directors are advised to obtain legal assistance before entering a leasing arrangement and regarding the extent of their personal obligations under this agreement.
It’s easy to let the prospect of a new venture curtail a comprehensive review of the terms of a lease, however these cases provide thoughtful insight into the importance of treading carefully when it comes to guarantees.
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 here.
