Written by Family Law Head of Department, Warren Tegg.
I’m constantly negotiating. I represent people in dispute. They may fall foul of the law or be in dispute with a competitor, customer or supplier in business. My task is to negotiate an outcome.
My work in Matrimonial or Commercial negotiation is assisted by an understanding the personalities I deal with. First I must understand my own. I learned that I am a strong personality, a “powerful choleric” inBriggs Myers experts terms an “A” type. I say “We work as a team and do it my way “ !
“Powerful choleric comes from American psychologist (Florence Littauer). She simplifies a personality test into two pages of strengths and weaknesses you identify. The result is a guide to your own blend of personality traits. Her work in “Personality Plus” is both instructive and entertaining.
You will be elated to discover that you possess your own distinctive personality type and that, for instance , it is OK not to be like your partner.
Step 1 shows how you view the world. Time to learn how others view it. The brevity of this column prevents a detailed explanation but people are a combination of four personality types:
Organised and meticulous
Sanguine party animal;
Strong leaders are great in a crisis. They know what to do next and will make the decision. They do need organized help to actually carry out the decision. Some 37 % of people would rather do the job than make the decision.
The world needs party people for fun and gentle peacemakers to offset the decision makers. Opposites attract so Leaders seek organized peacemakers and vice versa. Party animals are great fun but they’ll forget to bring everything they need and don’t plan at all.
Organized people may have trouble with spontaneity. And those seeking harmony may have trouble with practicality.
One part of a healthy relationship is understanding that our partner, co-worker or neighbor views the world differently. Consideration of their personality in getting our message across makes communication effective.
Understanding these differences will lead to healthier relationships.
An instalment contract is where the purchaser pays via
increments and does not usually obtain title until the final payment is made.
The Property Law Act 1974 (Qld) makes
special provision for instalments contracts and in many respects treats them
differently to standard residential conveyances.
an instalment contract
If the purchaser is obligated to pay greater than 10% (or
20% for a proposed lot off the plan)
of the purchase price without receiving transfer of title then the contract is
an instalment contract.
purchaser can lodge a caveat to protect their interest in the land,
vendor cannot rescind the contract for the purchaser’s default in a payment
unless a 30-day notice has been issued to the purchaser,
one-third of the purchase price has been paid, either party can demand a
conveyance of title from the other (subject to the purchaser granting a
mortgage in favour of the vendor).
The party seeking the conveyance can’t be in default.
As stated above, where the
purchaser fails to meet a payment the vendor can issue a notice giving the
purchaser 30 days to rectify the breach. Two common mistakes arise following
this. First, vendors often give the purchaser notice requiring payment within 7
or 14 days rather than the statutory requirement of 30 days. Second, vendors
often misunderstand their rights and will purport to terminate immediately
after the purchaser fails to make the payment. This actually results in a
breach by the vendor.
Vendor’s reluctance to hand over title
Vendors are often reluctant
to hand over title to the purchaser. Indeed they may not be able to do so if
there is a mortgage that hasn’t or can’t be paid out. A purchaser faced with a particularly
difficult vendor can make an application to the Court to force the vendor to
transfer title to the purchaser. This is very costly and the vendor can be
fined upwards of $900.00. We always recommend purchasers lodge a caveat to stop
the vendor dealing with the property at all until the Court application has
Lodge a caveat
Although a vendor cannot
grant a mortgage to a third party, they can grant other kinds of charges (we
stress the importance of proper contract drafting here). Purchasers would lodge
a caveat communicate to the outside world that they have a legal interest in
the property. This defeats most claims from third parties that the vendor
granted them some other form of interest.
Although final payment of
the purchase moneys may be years away, stamp duty is due 30 days from the
contract date. Significant penalty
interest will accrue from this date until payment.
Existing mortgage over the lot
The purchaser should specify
in the contract that instalment payments be made to the mortgagee (bank). The
consequence of not doing so is that upon final payment being made the vendor’s
mortgage may not be paid out and the funds dissipated preventing settlement.
A term in a contract
providing that interest is payable where the purchaser fails to meet an
instalment payment can be held invalid if not properly drafted. If the right to
charge interest arises because the purchaser has granted a mortgage to the
vendor, consumer credit legislation can step in to negate that right. Proper
contractual drafting is absolutely paramount to ensure these rights are
If the vendor becomes
bankrupt or enters external administration (for companies) the purchaser can
enforce the contract against the vendor’s trustee, administrator or liquidator.
However, the trustee can void the transaction where the purchase price was well
below market value.
Taking possession and due diligence
Purchasers typically lose
their right to conduct searches and seek compensation or terminate upon taking
possession. The contract should take this into account by delaying possession
for a few weeks so the purchaser can do their due diligence.
From 1 October 2016, Queensland will apply a stamp duty
surcharge of 3 per cent on direct and indirect acquisitions of residential land
by foreign purchasers.
Similar surcharges are in place already in New South Wales
and Victoria, having taken affect from 21 June 2016 and 1 July 2016
Note however that the surcharge only applies to residential
Residential land is land upon which a building is (or will
be) situated and approved by the local government for human habitation by a
single family unit. It is extended to include land which is (or will be)
subdivided into lots for the same purpose. The definition extends to vacant
land where a person undertakes or will undertake development of a building or
buildings which will fit the description above.
The Commissioner is serious about reaping the surcharge. The
foreign purchaser, the vendor and any co-purchaser will all be jointly and
severally liable for any unpaid Additional Foreign Acquirer Duty (“AFAD”), even
if the vendor is not foreign. If any AFAD is unpaid the Commissioner of State
Revenue will have a first-ranking statutory charge over the land and can even
obtain a court order to sell the land. However there is some comfort in that
subsequent purchasers of lots will not be jointly or severally liable for
unpaid AFAD where the Commissioner has yet to register a charge.
Importantly, if the purchaser becomes foreign within 3 years
of acquiring the land they will need to notify the Commissioner within 28 days.
It is an offence to fail to notify the Commissioner within 28 days. This
imposes quite an onerous obligation on trustees and corporate directors to
monitor share and unit holdings.
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NEW foreign resident capital
gains withholding payments
Be prepared: The following applies to all
contracts entered into which will settle from 1 July 2016
Government’s new “non-final withholding tax” will mean that where a foreign
resident disposes of Australian property the Buyer will need to withhold
and remit 10% of the market value of the property to the ATO.
does it apply to?
new withholding tax will apply to all transactions for Australian property
where the vendor is a foreign person, including options and rights to acquire,
except assignments of leases where no premium is paid for entry into the lease.
is ‘market value’?
parties contract at arm’s length, the purchase price is taken as the market
there is an exception where the market value is below $2million, leaving
the vast majority of residential property sales unaffected. REIQ and QLS are
likely to release a new edition of the standard contract shortly.
is the purchaser’s responsibility to remit payment to the ATO from the purchase
price. Foreign sellers unaware of this might expect to receive more funds from
their sale than they will. Issues could arise where the funds from a sale are
intended to be used towards a subsequent purchase, and the funds are short as a
result of the withholding.
is a clearance certificate?
sales over $2million, a clearance certificate can be obtained by the seller
which provides the certainty for both parties that the purchase price does not
include the withholding tax. Using the certificate means no nasty surprises for
the seller in that no funds are withheld from the sale proceeds. These certificates
can be obtained before listing the property for sale.
clearance certificate application will be an online process. The ATO will be
making it available before 30 June. After the application is lodged, the tax
office are predicting it will take days for the certificate to be issued,
unless there are irregularities within the system whereby certificates could
take up to 4 weeks.
is the effect of GST?
the transaction is subject to GST, the withholding will be 10% of the
GST-inclusive purchase price less the input credit deduction. This only applies
where the purchaser is registered for GST or entitled to an input tax credit.
tax office has published a range of FAQ’s on the new laws which can be accessed
The solar rebate scheme entitled a person to 44
cents per kilowatt hour of electricity they fed back into the system via their
solar panels. No new applications have been accepted since 2012; however those who
signed up before the cut-off date will benefit from the scheme until 2028. To
remain entitled, the name on the electricity account needs to stay the same.
This can cause issues with leased properties where a tenant moves in and
decides to change the account name to their own or switch electricity providers.
Who gets the rebate?
tariff rebate is paid to the customer that holds the electricity account for
the individual premises.
is nothing preventing a rental property from receiving the feed-in tariff.
if the name on the electricity account at the property changes, for example due
to a change in tenant, then eligibility for the scheme would cease.
What happens if the tenant gets their
own electricity hooked up?
name on the account changes from the landlord to the tenant, therefore the
entitlement to the 44c/kWh rebate ceases.
If this happens on the agent’s watch, a landlord may be very
unhappy. In theory this should not be
able to be done as a switch of electricity accounts should require authority
from new and outgoing account holders.
We are aware however that this has actually happened without the consent
or knowledge of the landlord. Clarity
and confirmation in writing will help protect an agent.
How does the landlord get a return on
landlord could increase the rent and say to the tenant ‘you'll be getting free
the event a bloody-minded or ignorant tenant hooks up their own electricity
despite the landlord's specific instruction not to, and the landlord subsequently
loses their entitlement, provided there is appropriate documentation to create
and prove the tenant had this obligation, the landlord may be able to sue for the loss
of the feed-in tariff from the date the tenant switched the account name to 1
July 2028, being the date the legislation is due to expire.
Most people are
surprised when they learn that commercial leases may not need to be registered.
Nonetheless, it is quite common for even a savvy party to neglect or decide not
to register a lease to minimise costs.
Whether a lease must
be registered depends on the term of the lease.
Under the Land
Title Act a lease for a term of 3 years or less (granted after 24
April 1994) need not be registered, as the rights of a lessee under such
an unregistered lease will be protected by the Land Title Act.
A lease for an
initial term of 3 years or less doesn’t need to be registered to create a valid
lease. However, the option period (if exercised) will not bind anyone else with
a registered interest in the property such as a new owner, a bank with a
mortgage over the property, or a new lessee.
A lease for a term
of more than 3 years must be registered on the title, although it will remain
valid without registration.
If the lease is not registered, it will be defeated by the interest of a subsequent
registered proprietor. That is, if the
building is sold and the lease is not registered, the new registered owner
doesn’t have to honour any option to extend the tenancy.
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objective of a Will is firstly to make sure that everything that you have
managed to gather around you during your lifetime (valuable and sentimental),
goes where you want it to go; and secondly to ensure that your family are not
left with a mess to sort out at a time of grief and heartache as this is also
person dies with no Will?
The assets go
to the next-of-kin according to schedule set out in the Succession Act 1981.
Court must appoint an executor which may be a family member or the Public
the Public Trustee prepare my Will?
If your Will
is prepared by the Public Trustee, they will appoint themselves as Executor of
your estate. If we prepare your Will you will nominate your chosen person or
persons to act as executor of your estate.
current Will valid?
will may be invalid if:
It is not prepared in accordance with the relevant
If you marry your will is revoked with certain exception
divorce certain provisions of your Will may be revoked
How can I
avoid a challenge to my Will?
that your Will is valid, current and has been drawn up by a professional, such
as Bennett Carroll. We will advise you on the most effective means of
distributing your assets and ways in which assets can be protected.
Why do I need
If you lose
mental capacity, without an Enduring Power Of Attorney in place, there may be
no one with the legal authority to manage your financial affairs. Your family
or advisers would then need to apply to the government in your State or Territory
to have someone appointed. This can be expensive and a difficult process.
Who can be my attorney?
appoint up to four attorneys and they:
Must be 18 years of age or over
Must not be your health care provider (i.e. your doctor,
nurse or carer)
Must not be a bankrupt
Must not be
a paid carer
the Public Trustee prepare my EPOA?
Trustee will draw a Power of Attorney for free on the condition that they are
appointed your attorney. They then charge fees on transactions carried out on
your behalf. A solicitor will charge you a one-off fee for drawing the document
and you can choose your attorney.
How does an
Enduring Power Of Attorney differ from a General Power Of Attorney?
Power Of Attorney ceases to have effect after you lose the mental capacity to
make financial decisions. An Enduring Power Of Attorney will continue to have
effect whatever your mental capacity.
Do you need
to register the Enduring Power Of Attorney?
attorney wants to use the Enduring Power Of Attorney to deal with any real
estate, the Enduring Power Of Attorney may need to be registered with the Land
Titles Office. Even if there is no requirement you may be able to do so
voluntarily. By registering it, the Enduring Power Of Attorney
• will be on
record as a public document
• will be kept
safe from loss or destruction
• may be more
easily accepted as evidence that your attorney has authority to deal with your
property or financial affairs.
How do you
revoke your Enduring Power Of Attorney?
revoke your Enduring Power Of Attorney at any time, provided you have mental capacity
to understand what you are doing at the time you revoke it.
For assistance, please contact our office on 1300 334 566 or via email email@example.com