Tuesday, 20 September 2016

Seeking healthy relationships with family , friends , neighbours and work colleagues?

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:

  • Strong leader;
  • Organised and meticulous
  • Sanguine party animal;
  • Easygoing Peacemaker
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.  

Thursday, 25 August 2016

Danger Ahead: Instalment Contracts- Common issues with these types of contracts





Danger Ahead: Instalment Contracts
Common issues with these types of contracts

What’s an instalment contract?
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.

Identifying an instalment contract
If the purchaser is obligated to pay greater than 10% (or 20% for a proposed lot off the plan)[1] of the purchase price without receiving transfer of title then the contract is an instalment contract.

Important features include;
ü  The vendor cannot mortgage or sell the land,[2]
ü  The purchaser can lodge a caveat to protect their interest in the land,[3]
ü  The vendor cannot rescind the contract for the purchaser’s default in a payment unless a 30-day notice has been issued to the purchaser,[4]
ü  After 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).[5][6] The party seeking the conveyance can’t be in default.

Common issues
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 settled.
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.
Stamp duty
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.
Interest charges
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 maintained.
Bankruptcy
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.





[1]Property Law Act 1973 (Qld), S71.
[2]Ibid, at s73.
[3]Ibid, at S74.
[4]Ibid, at S72.
[5]Ibid, at S75.
[6]Ibid.

Thursday, 18 August 2016

New stamp duty surcharge-Applicable to foreign acquirers for property in QLD, NSW and VIC


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 respectively.

Note however that the surcharge only applies to residential land.

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.

To be added to our Real Estate mail out list , please click the following:
http://eepurl.com/cb_qgX

Thursday, 16 June 2016

NEW foreign resident capital gains withholding payments

NEW foreign resident capital gains withholding payments

Be prepared: The following applies to all contracts entered into which will settle from 1 July 2016

The 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.

What does it apply to?
The 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.

What is ‘market value’?
Where parties contract at arm’s length, the purchase price is taken as the market value.
Importantly, 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.
It 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. 

What is a clearance certificate?
For 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.
The 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.

What is the effect of GST?
If 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.


The tax office has published a range of FAQ’s on the new laws which can be accessed here.


Monday, 23 May 2016

Solar rebates and residential tenancies




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?
The tariff rebate is paid to the customer that holds the electricity account for the individual premises.
There is nothing preventing a rental property from receiving the feed-in tariff.
However, 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?
The 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 their investment?
The landlord could increase the rent and say to the tenant ‘you'll be getting free electricity’.


In 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.  

Thursday, 12 May 2016

Registered or unregistered leases. What’s the difference?




 
Registered or unregistered leases
What’s the difference?

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.[1]

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.[2] 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.

Make sure you are up to date by continuing to follow the Bennett Carroll newsletter, conveniently delivered straight to your inbox.




[1] Land Title Act s 185(1)(b)
[2] Land Title Act s 71

Monday, 9 May 2016

WILLS & ENDURING POWERS OF ATTORNEY FAQ’S



Why do I need a Will?
The main 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 very expensive


What if 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 Trustee.


Why can’t 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.


Is my current Will valid?
Your current will may be invalid if:
 It is not prepared in accordance with the relevant legislation
 If you marry your will is revoked with certain exception
 If you divorce certain provisions of your Will may be revoked


How can I avoid a challenge to my Will?
By ensuring 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 an EPOA?
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?
You may 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


Why can’t the Public Trustee prepare my EPOA?
The Public 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?
A General 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?
If your 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?

You can 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 info@bcglaw.com.au