We have a new website and new Blog format!- Dont miss out on new blogs

We have a new website and new Blog format!

Tisher Liner FC Law's new website

Visit our new and improved website at www.tlfc.com.au. It is more user friendly, sets out the services we provide clients and has useful information for clients and potential clients. You can also view the entire contents of our website (and blog) in Chinese (both simplified and traditional). For a list of our services click here (for an English version) and click here (for a Chinese version).

Don’t miss out on our blog- Have you signed up to our new site?

Our website now also integrates our Business and Property Law Blog. We post regular items of interest for those in business and property (including owners, tenants, estate agents, owners corporations and developers). Its complimentary and quick to subscribe to. Just enter your email address and click on Subscribe in the Blog section of our website.

If you were signed up to this blog and have recieved our new format Blog (sent on 20 January 2015) then you are already signed up and no need to do anything. If you missed our blog on 20 January 2015 then you will need to sign up again on our new site Blog section .

 

Regards

Phillip Leaman

Tisher Liner FC Law Pty Ltd

www.tlfc.com.au

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Real Estate Contract changes in depth analysis

Further to our previous posts on this topic we include below a paper presented by Ron Cohen with a more a detailed analysis on the changes to the sale of land act which are important for vendors and estate agents to comply with.

The Sale of Land Amendment at 2014 (“Amendment Act”) came into effect on 1 October 2014.

1. The main purpose of the Amendment Act is to “re-enact, reform and modernise” Vendor Statements provided under Section 32 of the Sale of Land Act and to make consequential amendments to other relevant legislation.

This has resulted in a new form of Section 32 Statement (Vendor Statement) being used on and from that date.

2. The Amendment Act also introduces a new requirement for Vendors (or their real estate agent) to provide a Due Diligence Checklist to prospective purchasers of residential land from the time that the land is offered for sale.

3.​There is also a new form of Contract of Sale of Real Estate prescribed by the Estate Agents (Contracts) Regulations 2008 (“Regulations”) which updates the previous prescribed version.

This paper is intended to briefly highlight these updates and how they may affect real estate agents in particular, including some suggested action points.

Also, just a quick note to advise that whilst the Amendment Act and the new form of Section 32 Statement commenced on 1 October, there are transitional provisions which allow an old form of Vendor’s Statement to be used in certain circumstances, namely where:

1. The relevant property was “on the market” for sale prior to 1 October; and

2. An old form of Vendor’s Statement was prepared and signed prior to that date.

However, it is suggested that where possible the new form of Section 32 Statement should be used even during the transitional period.

NEW FORM OF VENDOR (SECTION 32) STATEMENT

By virtue of the changes brought about by the Amendment Act, a new format of statements under Section 32 of the Sale of Land Act has been developed, as well as a range of changes to the information and documentation attached to the Statement.

This paper does not propose to detail all of these changes but will highlight some important features in the new document.

These changes include the following:

1. The new format of the Statement requires the names and signatures of both the Vendor and the Purchaser (as well as the date of signing) on the first page rather than at the end of the Statement. (The Amendment Act also allows the Vendor to sign the Statement by “electronic signature” but does not specify what constitutes an electronic signature).

2. It requires a search statement (i.e. a title search) to be included rather than a mere photocopy of the duplicate Certificate of Title.

3. It only needs to disclose services that are not connected to the property.

4. It only requires relevant information regarding any Owners Corporation affecting the land to be included and an Owners Corporation Certificate is no longer mandatory. (However, I am of the view that it is still prudent to attach an Owners Corporation Certificate where possible).

​BUT NOTE – in the event that the Owners Corporation is inactive (and this includes a situation where the Owners Corporation has not within the last 15 months held an annual general meeting, fixed any fees and not held any insurance) no Certificate or information is required. The Vendor Statement simply needs to disclose that the Owners Corporation is inactive.

5. For an Off-The-Plan sale the latest version of the Plan of Subdivision must be attached.

6. Only notices, orders, declarations, reports or recommendations that “directly and currently” affect the land which the Vendor is expected to have knowledge of need to be included.

7. The Section 32 Statement no longer needs to be attached to the Contract.

8. An Additional Vendors Statement is required when the land is sold subject to a mortgage or under a terms contract.

9. Only one counterpart of the Section 32 Statement is required.

Failing to use the new form of Section 32 Statement from 1 October may entitle a Purchaser to exercise rights to rescind the Contract prior to settlement.

DUE DILIGENCE CHECKLIST

The Amendment Act now makes it a requirement for a Vendor (or a licenced estate agent appointed by the Vendor) offering vacant residential land and/or land with an existing residence for sale to make available to all prospective purchasers a Due Diligence Checklist (“Checklist”) from the time that the land is offered for sale.

Note that the “vacant residential land” is very broadly defined to include any vacant land on which the construction of a residence is permitted.

The Checklist must be in a form approved by the Director of Consumer Affairs Victoria. Consumer Affairs has already developed a form of Checklist which is available on its website (www.consumer.vic.gov.au/duediligencechecklist) and a copy is provided with this paper.

The Checklist contains information similar to the warnings appearing on the previous form of Vendor’s Statement as well as a variety of information that a Purchaser should consider and investigate when buying a residential property.

The Amendment Act specifically provides that where the Vendor has appointed a licenced real estate agent, the obligation to provide the Checklist falls on the agent rather than the Vendor.

Failure to provide the Checklist may incur a liability to a fine of up to 60 penalty units (currently, $8,856.60).

However, the Amendment Act does not appear to give the Purchaser any rights if the Checklist is not provided.

So, how is the Checklist made available? The Amendment Act provides that it is to be made available if:

(a) Copies of the Checklist are on display or offered to prospective Purchasers at an open for inspection; and

(b) If it is available (either directly or by a link) on any internet website maintained by the Vendor or the Vendor’s estate agent.

NEW FORM OF CONTRACT

With the new form of Section 32 Statement also comes a new form of Contract of Sale of Real Estate (published jointly by the Law Institute and Real Estate Institute of Victoria).

The form is substantially the same as the previous form but there are a few amendments and updates which agents should familiarise themselves with.

Agents should be aware that Section 53A of the Estate Agents Act allows them to fill in a standard form of Contract prescribed by the Regulations, and also to fill in a Contract prepared a legal practitioner or licensed conveyancer.

CONCLUSION/ACTION PLAN

So now that you are aware of these significant changes in the law, what should you do?

I would recommend some or all of the following:

1. Review your existing listings which commenced prior to 1 October. If the Section 32 Statement is in the old form, check whether it has it been signed by the Vendor prior to 1October.

Regardless of whether or not it has been signed, you should confirm with the Vendor’s Solicitor whether an updated Section 32 Statement is required. (My recommendation is to use a new form of Section 32 Statement wherever possible).

2. Ensure that the new form of Section 32 Statement is used for any listing commencing from 1 October.

3. In most cases ensure that the Vendor’s legal practitioner prepares the Contract of Sale.

4. If you, as selling agent, are required to prepare the Contract, you should only use the form prescribed by the Regulations.

5. Where only one Section 32 Statement is available, obtain written confirmation from the Purchaser that a signed Section 32 Statement was given prior to the Contract being signed (and if possible photocopy the Statement after it has been countersigned and dated).

6. For residential sales, make sure that you make the Checklist available both at open for inspections and on your website. I would also recommend that when you send property information to prospective Purchasers for example by way of an information memorandum, tender process, brochure or email, you should include the Checklist (or a link) as part of these materials.

7.​Keep a written record of how and when you made the Checklist available for each of your residential listings.

For assistance on property law matters speak to Ron Cohen, Jonathan Tisher, Frank Tisher or one of Tisher Liner FC Law’s property law team. See our website www.tlfc.com.au for further details on the services we provide clients.

TISHER LINER FC LAW

Level 2, 333 Queen Street ( Cnr Latrobe Street), Melbourne VIC 3000 | DX 181 Melbourne

Ph: +61 3 8600 9333 | Fax: +61 3 9670 6359 | Email: info@tlfc.com.au

Web: www.tlfc.com.au

NOTICE: This blog is for information purposes only and the material appearing on this blog is not intended to be nor should it be relied on as legal advice or a substitute for legal or other professional advice.

Purchasing real estate by an SMSF and the implications from an Estate Planning perspective

Self-managed superannuation funds (“SMSF”) are becoming a common vehicle to invest in real estate particularly for residential real estate. The income of an SMSF is taxed at the rate of 15% however any income derived by the SMSF whereby it qualifies to be in pension phase is exempt from income tax altogether. In addition to income tax benefits, there are also capital gains tax benefits in using an SMSF to purchase real estate whereby capital gains tax is at a maximum rate of 15% and once the SMSF reaches the pension phase, there will be no capital gains tax payable.

There are therefore compelling reasons to consider using an SMSF for the purchase of real estate but the advantages and disadvantages must be carefully considered.

To purchase real estate in a SMSF, the SMSF either has to have all the funds available for the purchase price, or if it wishes to borrow funds, there are very strict guidelines for such borrowings. These must be considered before a Contract of Sale & Vendor’s Statement is signed.

Borrowing by an SMSF requires that the real estate is purchased by a separate entity and such entity must enter into an agreement to hold the property as bare trustee for the SMSF. It is the separate entity that borrows for the purpose of purchasing the real estate. It is a specific requirement that the security for the borrowing is to be limited to the single asset being acquired and that no other assets of the SMSF can be placed at risk (this is called a limited-recourse loan). The bank may also require a personal guarantee to be provided. The loan is different to the usual loan that a bank will provide.

It is important to note that once the SMSF has purchased the property, it cannot change the nature of the property and cannot borrow further funds for this purpose. In addition, if an SMSF purchases residential real estate, such property cannot be lived in by a member of the family. It is also important to be aware of what the SMSF can do so that there are no breaches. Any breaches may results in the SMSF becoming non compliant and its assets being taxed at a much higher rate (up to 46.5%).

One must also be aware that there are additional expenses in establishing the SMSF and the structure for the purpose of borrowing. These should also be considered before proceeding to purchase.

From an estate planning perspective, the advantages are similar to any other asset acquired by the SMSF and dealt with in accordance with the appropriate regulations and the provisions of the trust deed.

It is important to note that assets which form part of an SMSF are not dealt with by your Will and that any assets in the SMSF must be specifically dealt with in accordance with the appropriate legislation and the provisions of the trust deed governing the distribution of any assets of the SMSF.

It is common to prepare a binding death nomination in respect to such distribution and this must be carefully considered at the same time that the Will is made taking into account any trusts or entities which are owned or controlled by the Will maker. The nomination will usually nominate a specific person or entity who will be entitled to the assets of the superannuation fund. This all forms part of estate planning discussions.

Tisher Liner FC Law has expertise and experience in all the matters referred to in this article. Please contact Jonathan Tisher, Ron Cohen, Dennis Liner or one of Tisher Liner FC Law’s property law team if you have any specific queries.

See our website http://www.tlfc.com.au for further details on the services we provide clients.

TISHER LINER FC LAW

Level 2, 333 Queen Street ( Cnr Latrobe Street), Melbourne VIC 3000 | DX 181 Melbourne

Ph: +61 3 8600 9333 | Fax: +61 3 9670 6359 | Email: info@tlfc.com.au

Web: http://www.tlfc.com.au

NOTICE: This blog is for information purposes only and the material appearing on this blog is not intended to be nor should it be relied on as legal advice or a substitute for legal or other professional advice.

Contract of sale of real estate- SPECIAL CONDITIONS

Regardless of what type of property you are acquiring, in Victoria every agreement for the purchase and sale of property must be in writing. It is usually in the form of a Contract of Sale of Real Estate approved by the Law Institute and Real Estate Institute of Victoria.  The contract will contain general conditions and in many cases a Vendor’s lawyer will also add their own special conditions.

However, Purchasers can also request special conditions be included in the contract.

These may include:

  1. Subject to a satisfactory building and pest inspection report;
  2. Subject to planning or building or building approval if the investor wants to renovate or develop the property;
  3. Early access (e.g. for the Purchaser’s surveyor to measure the property or carry out soil tests);
  4. A due diligence period to conduct a detailed analysis of the property, and
  5. The Vendor to provide a depreciation schedule in the case of a new property.

Special conditions for the benefit of a Purchaser are designed to protect Purchasers and to lock in a price whilst still conducting due diligence and these conditions will give a Purchaser an “out” if any of the agreed conditions are not satisfied, while still binding the Vendor if ultimately the Purchaser wants to proceed. It also ensure the property comes off the market.

 

Whether you are selling or purchasing a property it is important to make sure the contract is drafted properly and deals with the relevant issues. It should always be checked by a property lawyer before it is signed.

 

For assistance on property law matters speak to Ron Cohen, Jonathan Tisher, Frank Tisher or one of Tisher Liner FC Law’s property law team. See our website www.tlfc.com.au for further details on the services we provide clients.

 

TISHER LINER FC LAW

Level 2, 333 Queen Street ( Cnr Latrobe Street), Melbourne VIC 3000 | DX 181 Melbourne

Ph: +61 3 8600 9333 | Fax: +61 3 9670 6359 | Email: info@tlfc.com.au

Web: www.tlfc.com.au

 

NOTICE: This blog is for information purposes only and the material appearing on this blog is not intended to be nor should it be relied on as legal advice or a substitute for legal or other professional advice.

Are you a lender of funds? Get your systems in place now to avoid an issue

On 24 September 2014 new laws took effect to require mortgagees to take reasonable steps to verify the identity and authority of a borrower under a mortgage. The Transfer of Land Act 1958 has been amended to impose strict obligations upon lenders.

What do lenders need to do?

They need to properly identify borrowers and it is suggested they follow the standards set out in the  Electronic Conveyancing National Law (Victoria).
If a fraud is perpetrated then the mortgage will be void and the security will be lost.

The new law applies to institutional lenders and private lenders.
Tisher Liner FC Law have experience in loans and finance matters. For assistance speak to Phillip Leaman, Michael Fetter or Felicity Simpson.

Phillip Leaman | Principal | Accredited Business Law Specialist

TISHER LINER FC LAW

Level 2, 333 Queen Street ( Cnr Latrobe Street), Melbourne VIC 3000 | DX 181 Melbourne

Ph: +61 3 8600 9333 | Fax: +61 3 9670 6359 | Email: pleaman@tlfc.com.au

Web: www.tlfc.com.au

 

NOTICE: This blog is for information purposes only and the material appearing on this blog is not intended to be nor should it be relied on as legal advice or a substitute for legal or other professional advice.

 

Liability limited by a Scheme approved under Professional Standards Legislation

Domain names- I own the rights don’t I?

How secure is your Domain Name?

If you have a Domain Name with “.com.au” then you do not “own” it.  You only have the licence to use it for a period of two years.

Accordingly, it is important that you diarise the expiry date in order that you ensure that your domain name is reregistered prior to the expiration of the two year period.

In a recent decision by the Panel in respect to a Domain Name dispute, the holder of the Domain Name was not aware that the appropriate Registrar had gone into liquidation and subsequently without the holder being aware, the two year period expired and the Domain Name lapsed.  Unfortunately for such holder, another organisation subsequently registered the identical Domain Name for its benefit.

This matter came before the Domain Name Dispute Administrative Panel  and it was dealt with in accordance with the “au Dispute Resolution Policy”.

Such Policy sets out that if the Domain Name is identical or similar to names or Trade Marks, the person holding the Domain Name has no rights or legitimate interests in respect to such Domain Name and if it was registered or it was being used in bad faith, then the Panel has the jurisdiction to order that the Domain Name be transferred back to the previous holder.

In the relevant determination, the Panel found that although the name was identical to a Trade Mark, the other two criteria were not proven. Accordingly, the Panelist dismissed the claim.

The relevant Policy provides for “first come, first served” and in order to challenge the registration of the use and registration of the Domain Name, the above three elements mentioned above, have to be satisfied.

Tisher Liner FC Law have the expertise in respect to Domain Name disputes and Dennis Liner has acted as the Panel in many disputes.

Tisher Liner FC Law have the experience to handle simple to complex domain name disputes.

Dennis Liner

Senior Consultant

TISHER LINER FC LAW

Level 2, 333 Queen Street, Melbourne VIC 3000 | DX 181 Melbourne

Ph: +61 3 8600 9333 | Fax: +61 3 9670 6359 | Email: dliner@tlfc.com.au

Web: www.tlfc.com.au

NOTICE: This blog is for information purposes only and the material appearing on this blog is not intended to be nor should it be relied on as legal advice or a substitute for legal or other professional advice.

Liability limited by a scheme approved under Professional Standards Legislation.

Legal Update- Section 32 Statements, Penalty Interest Rates and East West Link

Section 32 Statements- Checklist now available- Agents and Vendors get ready for 1 October 2014

Recent changes to the Sale of Land Act which were outlined in our blog http://blog.tlfc.com.au/2014/07/22/sellers-and-agents-beware-comply-with-new-section-32-statement-requirements-or-pay-the-penalty/ which require vendors and their agents to provide a due diligence checklist to purchasers and prospective purchasers from 1 October 2014. Vendors must also use the new format of the Section 32 statement from this date.

Vendors and agents must ensure copies of the due diligence checklist are available to potential buyers at any open for inspection and include a link to the Consumer Affairs webpage (http://consumer.vic.gov.au/duediligencechecklist) or include a copy on any website maintained by the estate agent or the seller (if no estate agent is acting for the seller) from 1 October 2014.

 

Penalty Interest Rate Changes

Most leases and commercial documents provide that the interest rate payable (particularly the default interest rate) is referenced to the amount prescribed by Section 2 of the Penalty Interest Rates Act 1983 (Vic). Please note that the Department of Justice has decreased the penalty interest rate from 11.5% per annum to 10.5% per annum as at 11 August 2014. The last rate change was in February 2014.

 

East West Link

The process of acquisition of properties for the East West Link is underway with our clients already receiving a Notice of Intention to Acquire. Formal acquisition via a Notice of Acquisition is due to be provided to land owners and tenants in early October 2014. Any party who has not received legal advice as yet and has received a Notice of Intention to Acquire should obtain legal advice now and start preparing to respond to compensation offered by Linking Melbourne Authority. Tisher Liner FC Law have experience in compulsory acquisition matters and act for affected landowners who will be losing their land to the Authority for the East West Link.

 

Our website http://tlfc.com.au/public/compulsory-acquisition has some useful information for those affected including frequently asked questions and a summary of the process. Contact Phillip Leaman for assistance.

 

Phillip Leaman | Partner | Accredited Business Law Specialist

TISHER LINER FC LAW

Level 2, 333 Queen Street ( Cnr Latrobe Street), Melbourne VIC 3000 | DX 181 Melbourne

Ph: +61 3 8600 9333 | Fax: +61 3 9670 6359 | Email: pleaman@tlfc.com.au

Web: www.tlfc.com.au

 

NOTICE: This blog is for information purposes only and the material appearing on this blog is not intended to be nor should it be relied on as legal advice or a substitute for legal or other professional advice.

 

Liability limited by a Scheme approved under Professional Standards Legislation