Articles and News

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Happy Clients Keep Coming..

There is no boring day in a Conveyancer’s life…

Mayara is a first home buyer who struggled to find a property in Covid-19 market. When she contacted us she was confused, uncertain and frustrated. As a Conveyancer for more than 10 years i learnt very valuable lesson “Conveyancing is not about paper work, it is about Community first and foremost” I found myself obliged to guide Mayara on every step of the way, from choosing the right property to giving her the Congratulations..
“Fred assisted me with purchasing my very first home , honestly he made the process so smooth so thankful for his work and honestly if you’re looking for someone affordable and great service Fred is the one !!”
Mayara De Braga

Thank you to all our clients who inspire us to do more and more in improving our service.

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Changes to Off Plan Contracts

The New South Wales Government has announced the Conveyancing Legislation Amendment Bill 2018, which, amongst other things, proposes to:

  • introduce a requirement for vendors of off-the-plan contracts to attach a disclosure statement to their contract before commencing their marketing
  • extend the cooling-off period for off-the-plan contracts to 10 business days (up from five business days)

The Bill had its second reading in the Legislative Council on 17 October 2018. While the Bill must now make its way through the Legislative Assembly, developers selling off-the-plan should start to think about what changes they will need to make to standard contracts so they are ready should the Bill pass.

Disclosure statement

The vendor under an off-the-plan contract will be required to make a disclosure statement available for inspection, with the contract, before the property can be advertised for sale.

The disclosure statement will need to include a copy of the draft subdivision plan and other prescribed documents. Exactly what other prescribed documents will be required is unknown but they are likely to include proposed strata by-laws, proposed community or neighbourhood management statements and perhaps a schedule of finishes, as applicable.

Once a contract is exchanged, if the vendor becomes aware that the disclosure statement contains inaccuracies in a “material particular”, a notice of changes must be served on each affected purchaser at least 21 days before completion of the contract. Each purchaser will have the right to rescind if any change notified in the notice of changes is such that the purchaser would not have entered into the contract had the purchaser been aware of the change and would be materially prejudiced by the change.

In a practical sense, the disclosure statement and the material attached to it will not differ greatly from the documents and information already provided by most developers. In essence, the new obligation prescribes a minimum standard of information that all developers will need to meet. However, the legislative changes will cause developers to consider more deeply, in the early stages of a project, matters such as by-laws which may not be as important to the developer but will be of great interest to potential buyers looking for a future home. In addition developers who go to market without a development consent will need to be confident consent conditions when granted will not cause issues.

Cooling-off period

Another proposed change will be to the statutory cooling-off period. Currently, the legislation provides purchasers a five business day cooling-off period that commences on the day the contract is exchanged. This will be extended to 10 days for off-the-plan contracts.

The new legislation still provides a mechanism for the cooling-off period to be waived if a solicitor signs a section 66W certificate which states that the contract has been explained to the purchaser. The position will not change in regards to the purchaser forfeiting 0.25 per cent of the purchase price of the property to the vendor.

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First Home Buyers Need To Learn in 2021

So how can you improve your saving and spending habits to turn the property dream into reality?

Source: Domain Website

1. Learn the art of delayed gratification

Founder of the We Find Houses Group Paul Wilson says people need to tackle what he calls the instant gratification factor.

“We all want instant gratification,” he says. “We don’t want to sacrifice anything these days, and we can talk ourselves into rewarding ourselves too soon.”

So instead of rewarding yourself daily, make spending money on these discretionary items a weekly or monthly event.

2. Think like a bank

Mortgage Choice chief executive Susan Mitchell says that if you’re serious about buying a home and securing a loan to do so, you need to take a considered approach to your spending.

“To start, print out a month’s worth of statements attached to your everyday bank accounts and your credit cards and go through each transaction,” she says. “Ask yourself if you can explain each transaction, debit and credit to your accounts.”

“Highlight anything you’re unsure of. If you find yourself questioning transactions, chances are the lender will as well. This will help you identify where you can cut back and allow you to set and work to a clearly defined budget.”

Mitchell says it’s worth noting that some lenders will ask to see up to six months’ worth of statements when you apply for a home loan.

3. Stick to a budget

The hardest part of a budget is identifying and cutting out unnecessary expenses. Start by writing down your monthly costs, such as rent, transport, energy bills, insurance, groceries and childcare. If you want a more accurate snapshot, consider tracking your expenses on a free app.

Now subtract this amount from your income. Whatever is left over is what you could potentially save for your deposit.

Sticking to a budget will also pay off when you approach lenders for a home loan.

4. Go old school

Mitchell is an advocate for limiting the use of online services that allow ultra-convenient shopping, eating and commuting.

“If you plan to apply for a home loan in the next six months, limit your use of buy-now-pay-later, online food delivery and ride-sharing services,” says Mitchell. “Unfortunately, using these services on a regular basis can give lenders the impression that you are an impulsive spender who doesn’t manage their money wisely.”

5. Save a home-loan repayment each month

This tip from Mitchell might sound premature if you don’t have a home loan yet, however, if you can diligently save the same amount of money each month, it will demonstrate to a lender that you will be able to keep up with your home loan repayments.

“Speak to your local mortgage broker to learn what your borrowing power is so you have a clear sense of the amount you should be saving each month,” Mitchell says.

6. Chase new income streams

You cannot get ahead with a nine-to-five business mentality, says Wilson.

“People should investigate the opportunity to earn more,” he says. “Ask yourself if you can convert your spare time into an income-producing activity rather than a brain-dead activity, How much time do you spend on Netflix or scrolling social pages? Why not come up with a business idea instead?”

Wilson says first-home buyers who are truly passionate about saving a deposit will examine their skill set and see where else it might be applied.

7. Consolidate your debts and cut up the credit cards

If you know you’re not responsible with your credit card, consolidate the debts you have, make a plan to pay off the debt as soon as possible and then cancel the card, says Mitchell. This will remove temptation and help you avoid getting into high-interest debt.

8. Research more ways to save on everyday expenses. 

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Changes to off-the-plan residential property contracts in NSW

In November 2017 the NSW Office of the Registrar General released a discussion paper which identified a set of reform proposals designed to strengthen protections for consumers purchasing off-the-plan properties.

Following on from this paper the Conveyancing Legislation Amendment Bill 2018 (NSW) was submitted and assented by both Houses of Parliament on 22 November 2018. Although passed by both houses, the changes as they relate to off-the-plan purchasers will not take effect until a proclamation date to be determined by the NSW Government.

The changes will include:

  • A 10 business day cooling off period to purchases of residential property off-the-plan.
  • Developers will be required to attach a disclosure statement to the contract for sale. The disclosure statement must include a copy of the draft subdivision plan and other prescribed documents contained in the regulations. The regulations have yet to be introduced.
  • If a developer becomes aware that the disclosure statement contains inaccuracies in a “material particular”, a notice of changes must be served on the affected purchaser at least 21 days before completion of the contract. The purchaser may, after receiving a notice of changes, rescind the contract if a change notified in the notice of changes is such that the purchaser:
    • would not have entered into the contract had the purchaser been aware of the change, and
    • would be materially prejudiced by the change. (Resource Kells Lawyers published on Mondaq website)

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Buying A Property? Five Essential Checks

For most of us, it’s the biggest purchase we’ll every make, yet many home buyers don’t complete the necessary due diligence before signing a contract.

Research conducted by Australian bank ME last year revealed 26 per cent of 1000 property owners surveyed discovered issues with their property post-purchase, with 23 per cent experiencing a degree of buyer’s remorse.

If you want to avoid that sinking feeling, add these oft-forgotten tasks to your home-buying checklist.

1. Visit the house at different times

The ME survey found 58 per cent of property owners spent less than 60 minutes checking out the property they went on to purchase and 36 per cent said they missed picking up issues with a property because “they fell in love with the property and overlooked them”.

It’s important to spend as much time at the property as you can and don’t be shy about requesting a viewing outside the advertised opens.

In her newly released book SOLD!, buyer’s advocate Nicole Jacobs lists inspecting the property outside normal open times as one of six must-dos.

“People often fall in love with a home and don’t think of all the practicalities,” she told Domain. “They can be swept away with emotion.”

Jacobs advises buyers to go back for a private viewing, sit on the lounge and contemplate if the space feels right.

“Don’t be afraid to move the furniture, open up the blinds and turn off the lights,” she says.

Buyer’s Domain principal Nick Viner agrees.

“Agents pick the sunniest time on a Saturday morning to show the home so go back later on in the day and on different days of the week,” he says.

“You’ll also want to check out the traffic. It may be fine on the weekend but it may be a rat run through the week.”

Viner also recommends a check on flight paths to find out what kind of noise you’ll be in for overhead.

2.  Talk to the neighbours

We’ve all heard stories about “the neighbours from hell”, so it makes sense to see who’s living next door before you outlay hundreds of thousands of dollars on a home. Not only does this give you the opportunity to size up your future neighbours, these people have front-row views to the house that may become your biggest asset.

“Neighbours are gold,” says Jacobs. “Knock on their door and see how they like living in the area, ask if they rent or own, and see if they know why the vendors are selling.”

Viner also makes a habit of touching base with other agents in the area on behalf of his clients, especially if they were invited to do a listing presentation for the vendor.

“Those conversations can be very revealing,” he says. “They may have information on the neighbours, or knowledge about price expectations or any problems with the property.”

3. Talk to the local council

REIA president Adrian Kelly says making an appointment to chat with the town planner at the local council can save a great deal of hair-pulling down the track.

“It’s always good to find out what’s happening nearby,” he says. Your neighbours may be planning major renovations or your street may be earmarked for a zoning change.

Jacobs suggests using online tools to pinpoint what’s planned for the area. She uses landchecker.com.au to check the zone, approvals and rejections for Melbourne properties and there are similar tools available in other states, such as the NSW government’s planningportal.nsw.gov.au.

“It’s really critical,” says Jacobs. “You don’t want to buy a beautiful home and then find out they’re building a block of apartments next door.”

Viner gives the example of properties within spitting distance of Westconnex, a 33-kilometre motorway connecting Sydney’s M4 and M5.

“If you look on the map you can see that there are provisions for tunnels to go straight under properties,” he says. “This is where local knowledge of the area is imperative, and if you don’t have it then you should speak with someone who has.”

Kelly also advises buyers to confirm that boundary fences are actually on the boundaries and to check properties for any unapproved works.

“The owners might have a deck that has been added, or a shed or workshop built in the backyard without approval or they might have added an extra bedroom or an en suite,” he says. “You need to know what you’re getting into because council can ask you to demolish unapproved structures.”

4. Investigate commute times

It’s not uncommon for people to move house specifically to be closer to their place of work, but don’t just rely on Google Maps or Trip Planner to crunch the commute time.

Consider doing an actual commute from the property you’re interested in, says Jacobs.

“Arrive in the morning at the time you might leave and then commute to work from there and see how that feels,” she says.

Jacobs also recommends a thorough walk around the neighbourhood to figure out how long it takes to get to schools, shops and cafes.

5. Check mobile and broadband coverage

Most of us would be lost without reliable access to our mobiles, computers and other devices yet there are still plenty of neighbourhoods across the country where access is limited, patchy or slow.

Viner says with more and more people working from home, poor coverage could potentially be a deal-breaker.

You’ll need to find out if NBN has been implemented in the street and if not, you’ll need to investigate other internet connectivity options such as via cable, ADSL and mobile broadband.

It’s also a good idea to test your mobile reception in different parts of the property as coverage can vary considerably between providers or you may find yourself in a mobile blackspot with no coverage at all.

 

The Source: Domain Website 

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Building Contracts Traps

Anyone building a new home has to sign a contract, and while the builder says it is “standard paperwork”, to most people, it’s anything but.

Building contracts are written by experts accustomed to building terminology and trade practices. And it’s likely that the people who have put together the document you are told is there to protect you, was, or is, a builder or industry professional.

The phrase “you can’t a poacher and gamekeeper be” springs to mind.

Contracts are a necessity and provide remedies in the event of problems. However, signing one should only ever be done having sought good advice.

These are some of the key issues you need to be aware of when signing a building contract.

Inclusions and exclusions

Make sure that the plans, specifications and any other documents important to you are listed in the contract. Most contracts include an exclusion clause stating that only matters covered in the contract will be relied on.

Sales patter and deals to incentivise you to sign up are almost always left out (to see if you pick up on it), so double and triple-check that anything you were told, or want to rely on, is in the document.

Don’t leave it to chance that the salesman’s promise of a six-month build is in there somewhere, as it most likely won’t be.

Price and provisional sums

Is the contract a fixed price or does it allow for price variations? A reasonable builder will know how much to allow to cover likely price rises in the time it takes to build your home, and will have included that in the cost. Checking this avoids any nasty late additions due to a price rise that the builder says he didn’t allow for.

There will likely be items called “provisional sums” in the final total. These are estimates for work where the actual cost is impossible to know beforehand.

Before signing up, ask a professional if the provisional sums are enough. It’s a very old trick to keep provisional items low to entice a client, only to find that halfway through the build the actual costs have escalated. It’s then too late to argue.

Ideally, exclude all provisional items and get fixed prices for as much as you can in advance.

Timelines and payment stages

It’s unlikely that everything will run like clockwork. Building sites rarely do. However, this shouldn’t stop a reasonable builder agreeing on a timetable with you.

If a deadline is essential to you, make sure you agree on timelines before you sign, allowing some slack time to cover for bad weather or delays beyond the builder’s control. Never sign a contract without an agreed timeline.

Building contracts work on milestone-payment terms, meaning payment is made when the builder reaches a certain point in the process.

Don’t rely on the builder to tell you when that point has been reached. Instead, appoint an independent professional to look at the work and confirm that what you are paying for is worth the money, and is complete to building codes.

If a builder goes bust and you have overpaid at any stage, you will end up paying a replacement builder for work you’ve already forked out for.

Money spent checking on quality and progress is worth every cent.

Sign and counter-sign

As a matter of course check that every page and every blank space has been filled in correctly, or lined through as not applicable.

Have the contract witnessed properly, and initial every single page and document that you will be relying upon to complete your project, and make sure that the builder follows suit.

Counter-signing means that both parties have had a meeting of minds at the time of signing, and means pleas of lack of understanding, or responsibility, can’t be used later down the track.

The golden rule with the contract-signing process is check twice, and sign once. If you are unsure of a clause, don’t sign until you are 100 per cent comfortable that you have ensured as much certainty as possible.

Nobody wants to have to enforce a contract, but if you end up in a dispute you will be thankful you took the time to make sure things fall in your favour.

 

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Changes to Property and Conveyancing Laws in NSW in 2017

Duty (formerly known as “stamp duty”)

On 30 June 2017 the NSW New Home Grant scheme ended. That scheme provided a grant of $5,000.00 to purchasers of vacant land who intended to commence construction of a new home on the property within 26 weeks of the date of settlement. (See New Home Grant scheme.)

On 30 June 2017 the NSW Office of State Revenue – First Home – New Home scheme ended.

That scheme provided that no duty was payable for the purchase of a new home by a first home buyer up to the value of $550,000 and concessional duty was payable between the value of $550,000 and $650,000.

The scheme also provided that for the purchase of vacant land by a first home owner to construct their new home, for vacant land up to the value of $350,000 no duty was payable and for vacant land between the value of $350,000 and $450,000 concessional duty was payable. (See First Home – New Home scheme.)

From 1 July 2017 the First Home Buyers Assistance scheme was introduced. This scheme provides duty exemptions and concessions for first home buyers whether they are purchasing a new home or an existing home.

No duty is payable by a first home buyer on the purchase of a first home up to the value of $650,000. Concessional duty is payable by a first home buyer on the purchase of a first home valued at between $650,000 and $800,000.

No duty is payable by a first home buyer of vacant land on which they intend to construct their principal place of residence, for vacant land valued up to $350,000. Concessional duty is payable by a first home buyer on vacant land on which they intend to construct their principal place of residence, for vacant land valued between $350,000 and $450,000. (See First Home Buyers Assistance scheme.)

Investors entering into contracts to purchase properties off the plan from 1 July 2017 will now have to pay duty within three months of the date of the contract, unless the property being purchased is intended as their principal place of residence. If the property being purchased off the plan is intended to be the purchaser’s principal place of residence, then the purchaser will have 15 months from the date of the contract to pay the duty. (See Transfer of land or business duty.)

For foreigners purchasing residential property, from 1 July 2017 Foreign Person Surcharge Purchaser Duty, payable in addition to duty, will increase to 8%. (See Surcharge purchaser duty.)

First Home Owner’s Grant

There is still a First Home Owner’s Grant available for first home buyers purchasing new homes only. This grant is not available for first home buyers purchasing existing homes.

The First Home Owner’s Grant of $10,000 is available provided that the new house price does not exceed $600,000.00; or, if buying vacant land with the intention of building a home, the land and building price do not exceed $750,000. (See First Home Owner Grant (New Homes) scheme.)

Foreign Person Land Tax Surcharge

For foreigners who own residential property, from 1 July 2017 the Foreign Person Land Tax Surcharge will increase to 0.75%. Foreign Person Land Tax Surcharge is payable in addition to Land Tax. (See Land tax surcharge.)

Foreign Resident Capital Gains Withholding Tax

For all contracts exchanged after 1 July 2017, the Foreign Resident Capital Gains Withholding Tax requirements will apply to contracts having a price of $750,000 and above.

Vendors will need to obtain from the Australian Taxation Office a Foreign Resident Capital Gain Withholding clearance or variation certificate if the contract price is $750,000 or more. If an ATO clearance or variation certificate is not available, the rate of Foreign Resident Capital Gain Withholding Tax is increased to 12.5%.

The Foreign Resident Capital Gain Withholding regime applies to Australian citizens who are foreign tax residents, as well as to non-Australian citizens. (See Foreign resident capital gains withholding payments.)

Office space and Building Energy Efficiency Certificates

From 1 July 2017 the requirement to have a Building Energy Efficiency Certificate (BEEC) applies to more properties.

Commercial building owners and commercial landlords will be required to provide a BEEC when selling or leasing commercial office space when the building’s nett lettable area is greater than 1000 square metres. Sellers and lessors must acquire a BEEC from the Department of the Environment and Energy before putting the property on the market for sale or lease.

The BEEC discloses the building’s energy efficiency rating and must appear in all forms of advertising material for the building. It must be provided to the buyer or tenant at the time of sale or lease.

Failure to comply may result in fines up to $210,000 and fines of up to $21,000 per day of breach for subsequent offences. Compliance is monitored and penalties will apply to any sellers, landlords and agents who do not comply with these disclosure obligations. (See the federal government’s Commercial Building Disclosure Program.)

Vendor disclosure obligations

From 1 September 2017, there are additional vendor disclosure obligations affecting contracts and options for the purchase of property. A vendor is now also required to attach the following to the contract or option:

  • An additional sewer diagram where necessary to show the location of sewer lines in relation to the property
  • All strata by-laws in force for the strata scheme of which the property is a part
  • A new warning statement alerting potential purchasers to the possible presence of loose-fill asbestos in certain properties

(See Changes to vendor disclosure requirements from 1 September 2017.)

Vendor warranties in contracts

From 1 September 2017, vendor warranties implied in contracts include a warranty (or promise) that at the contract date, the strata scheme of which the property is a part has not passed a motion that a Strata Renewal Proposal warrants further investigation, a Strata Renewal Committee has been or is required to be established to give effect to such resolution, which is not recorded in the minutes of the meeting recording such resolution. (See Changes to vendor disclosure requirements from 1 September 2017.)

Foreign owners – unoccupied residential property

The recent federal budget also announced that foreign owners of residential properties left unoccupied or unavailable to rent for six months in any one year or more will pay an annual charge equivalent to the Foreign Investment Application Fee paid by the foreign investor when they purchased the property. The minimum fee payable is $5,500 per year

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What happens if i cannot afford to buy my land when it registers?

This is an extremely common question that we are asked when we have clients purchasing unregistered land.

It is therefore extremely important that when you purchase unregistered land you should be aware of all of the changes in circumstances that may occur while you are waiting for your land to register, such as:

  • Loss of job
  • Death of a party to the contract
  • Separation
  • The block of land losing value (worth less than what you are paying)

Unfortunately, none of these circumstances allow you to get out of the contract. You are still legally bound to complete your purchase.

WHAT ARE THE CONSEQUENCES IF I THEN DO NOT COMPLETE MY PURCHASE?

The consequences are quite severe and include:

  • You will be issued with a legal notice by the developer/vendor giving you a specific time in which you need to complete (settle) called a Notice to Complete.
  • If you then still do not settle, the developer/vendor can terminate the contract and claim the deposit that you paid when you first purchased the land.
  • On top of the loss of your deposit, the developer/vendor can commence legal action to recover any further losses they suffer.

From this you can see how important it is to be sure of your decision and circumstances when you are considering purchasing unregistered land.

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Interest Rate on Hold

As widely anticipated the Reserve Bank’s decision today was to once again leave the official interest rate on hold at 1.5 Percent. It is however expected that rate rises are coming, in a shock announcement this week RBA board member John Edwards warned there could be as many as eight interest rate rises in the next two years as economic growth picks up.

We know though that banks are also increasing their Mortgage Rates at their discretion despite the official rate’s lack of movement. It is sure to be an interesting run to the end of 2017.

As always, if we can be of any assistance to you in the coming month please don’t hesitate to reach out.

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Lease or License?

Understanding the difference between a lease and a licence in property is important when considering what type of arrangement is best for you and your business. Whilst both allow another party to operate from a premises, there are key differences between the two. If you’re thinking about creating or being bound by a lease or licence, here are a few things you need to know.

What is a lease?

A lease is a formal contract between an owner of a property (the landlord) and the occupier of the property (the tenant) which details the specific obligations of each party in the arrangement. A lease outlines the key terms of the occupation of the premises such as the rent amount and length of occupancy, along with the responsibilities of each party to keep the premises in working order.

There are three elements which need to be satisfied in order for it to be considered a lease:

The landlord and the tenant must have a mutual intention to enter into a legal relationship;
The tenant must have exclusive possession of the property; and,
There must be a fixed term of occupation with a fixed rent/rent review process.
What is a licence agreement?

A licence agreement is a contractual agreement between a licensor and licensee commonly used when the licensee uses only a specific part of the property or has temporary access to the licensor’s property.

There are two elements which need to be satisfied in order for it to be considered a licence agreement:

The parties have a mutual intention to enter into a legal relationship; and,
The licensee doesn’t have exclusive possession of the property.
Pros and cons of a lease

The key advantage of a lease is that it offers tenants far greater rights and protections. For example, if the landlord decides to sell the premises, the tenant’s rights are protected. A lease also offers security of tenure for the tenant through an option period. In addition, tenants may also be protected under legislation, for example, if it is a retail lease, the Retail Leases Act will provide extra protections. However, under a lease, the tenant is obligated to restore the premises to its original state once the lease has expired.

Pros and cons of a licence

If the licensee only requires access to part of a property on more casual terms, a licence is far more beneficial and simple to operate. A licence is also much easier to control if you are a licensor due to less onerous obligations placed on each party. However, a licence agreement offers far less protection for the licensee compared to a lease since the licensee doesn’t have a legal interest in the property.

Which is best for you?

Deciding whether to enter into a lease arrangement or a licence agreement can be a tricky task If a tenant only needs access to a property on more flexible terms and/or only part of the property, a licence is far more favourable. However, if a tenant requires exclusive occupation of a property along with more concrete protections, a lease is the best option. A lease also includes more rights and obligations, and is usually the more common arrangement in a property occupancy arrangement.