Property

I’m separated, can I buy a new property?

I'm separated, can I buy a new property?

If you have recently separated from your partner, you may be looking for a new place to live. You may find yourself chatting to a charming real estate agent who is showing you around the perfect new house. Before you sign the contract and pay the deposit for your dream home, you need to be sure that it won’t become a nightmare. 

Even if you and your partner are amicable, it is important to complete a formal family law property settlement to protect any new property you buy after separation. A property settlement will end the financial relationship between you, but until you do this any new property you purchase could become part of the dispute. For example:

Lisa and Michael were married for 7 years and have been separated for 10 months. Lisa meets Steve and they purchase a new house together. Michael then commences property proceedings and Lisa’s new house forms part of the property pool between her and Michael. She’s required to disclose details such as the address, who else owns the property, purchase price, and loan details. 

A lot of people may think that because they’ve purchased the new property after separation its none their ex’s business. However, until you tie up the loose ends of the marriage or de facto relationship by way of a property settlement, your leaving yourself open to a claim over your new property. Whether or not your ex is successful in their claim is a different story, but the cliché, ‘it’s better to be safe than sorry’ exists for a reason. 

You should note that there are also time limitations which end the financial relationship between you and your partner such as:

  • being divorced for 12 months for a marriage; or
  • being separated for 2 years for a de facto relationship. 

It is important to a speak to a family law solicitor before purchasing a new property to be aware of any potential consequences, the ways to complete a property settlement - which doesn’t always mean going to court, and to see whether you meet any of the time limitations listed above. For more information on time limits when separating have a read online here

Need assistance with a family law property settlement? Contact Coutts today.

Differences between NSW & QLD property purchasing

Purchasing interstate is a great way to expand your property portfolio however not everyone is aware that each state differs in their processes and procedures.

If you choose to diversify your portfolio in this way, it is important that you understand the differences. Below are the two key differences between the processes in NSW and QLD.

 

The Contract for Sale of Land – who prepares it, and what does it contain?

NSW

  1. Vendor's solicitor prepares contract

  2. Contract contains multiple searches detailing the nature of the property

  3. Contracts are exchanged

  4. Purchaser inspects searches contained in the contract

In NSW, the Contract for Sale of Land is prepared by the vendor’s (owner’s) solicitor or conveyancer. Once it is completed, the contract is then sent to the real estate agent for the purposes of marketing the property.

In order for the contract to comply with the regulations (and as such be a valid contract), it must contain specific documents which are known as the ‘prescribed documents’. These documents contain information to assist the potential purchaser in assessing the suitability of the property for their purchase. For example, the documents contain the zoning of the property (and its permitted use), a sewer diagram, a title search, and all easements or restrictions that apply to the property.

There are various other searches that can be conducted by the purchaser’s representative on behalf of the purchaser in addition to the prescribed documents, however in most cases these additional searches do not show results that might affect the decision to purchase the property (e.g., an RTA search to ensure that a road is not being widened next to your property).

QLD

  1. Real estate agent prepares contract

  2. Contract does not contain searches regarding the nature of the property

  3. Contracts are exchanged

  4. Purchaser carries out thier own property enquiries as soon as possible

In QLD, whilst it is possible for the Contract for Sale of Land to be prepared by the vendor’s solicitor or conveyancer, it is usually the selling agent who prepares it. The documents that are required to be attached to the contract by the regulations contain little to no information regarding the nature of the property, and subsequently the suitability of it for your purchase. This is because the law of “let the buyer beware” applies in QLD.

This means that the purchaser is required to conduct their own searches and enquiries to ensure that they are satisfied with the property prior to exchange or in the cooling off period.

 

When does the Contract become unconditional (i.e., the purchaser is “locked in”)?

A five-business day cooling off period applies in majority of purchases in both NSW and QLD, mostly to enable the purchaser to obtain legal advice on the contract. Whilst the purpose of the cooling off period differs between NSW and QLD, the purchaser will be required to pay a 0.25% deposit in both states to exchange with a cooling off period.

NSW

  1. Contracts exchanged on a 5 day cooling off period

  2. Purchaser meets with legal adviser, carries out property inspection

  3. Cooling off period expires

  4. Contacts unconditional

In NSW, the purpose of the cooling off period is for the purchaser to meet with their legal representative to obtain advice on the contact, to carry out their property enquiries (for example pest and building reports, strata reports, and council certificates), and to obtain their formal loan approval.

If the purchaser is satisfied with their enquiries made, and they receive formal loan approval during the cooling off period, they are required to pay the balance of the 10% deposit to the real estate agent by 5pm on the last day of the cooling off period. Once the cooling off period expires, the contracts becomes ‘unconditional’ and are legally binding on both the purchaser and the vendor.

In the event that the purchaser does not want to proceed with the purchase as a result of their enquiries during the cooling off period (e.g., the pest report details that the house is termite infested, or the purchaser is unable to obtain formal loan approval), they are entitled to rescind the contract before the expiration of the cooling off period. In this situation however, the purchaser forfeits the 0.25% deposit paid to the vendor.

QLD

  1. Contracts exchanged on a 5 day cooling off period

  2. Purchaser meets with legal adviser and carries out property inspecation

  3. Cooling off period expires

  4. Purchaser receives pest & building reports and formal loan approval with 21 days

  5. Purchaser confirm receipt of these

  6. Contract become unconditional

In QLD, the main purpose of the cooling off period is for the purchaser to obtain legal advice and carry out the property searches that are not included in the contract (e.g., title search, plan of the land, flood search, and council enquiries).

In addition to the cooling off period, most contracts in QLD are conditional upon the purchaser receiving satisfactory pest and building reports within a specified time (usually 21 days after the date of the contract). If the reports are not received within the specific time the purchaser can request an extension to the due date however it is up to the vendor to agree or not. If the reports received are not satisfactory to the purchaser, or are not received and the vendor does not agree to an extension, the purchaser is entitled to terminate the contract and retrieve all deposit monies paid back (including the 0.25% deposit).

The same principal also applies to the purchaser obtaining formal loan approval – that is, the contract is conditional upon the purchaser obtaining formal loan approval within the specified period (also usually 21 days). This means that the purchaser does not need to obtain formal loan within the cooling off period, as required in NSW. Once the purchaser confirms the receipt of satisfactory pest and building reports and formal loan approval, the contracts become unconditional (and the purchaser is “locked in”).

 

If you’re looking at expanding your property portfolio, why not consider purchasing interstate. Coutts has a wide range of experience in purchasing and selling in both NSW and QLD and can assist you in your transaction no matter where the property is located.

What should I tell my Conveyancer?

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A lot of people do not know when exactly they should start talking to a conveyancer. The simple answer is, the earlier, the better. As your conveyancer, the more we know about your buying or selling situation, the better we are able to act on your behalf.

As a purchaser or seller it is important to remember that the smallest amount of information, while it may seem unimportant to you, can have a severe impact on your transaction. As your conveyancer we don't want to come across any surprises so it is extremely important that you communicate to your conveyancer if you have, for example, severe financial restrictions, tight time limits, or any other specific concerns or requirements relating to your situation.

To assist you in your next sale or purchase, we have prepared a short summary listing some of the things you'll need to tell you conveyancer in your first meeting.

Selling

If you are selling, be sure to make your conveyancer aware of the following, if they apply to you:

  • If you are looking at changing/have changed your name since you bought the property (meaning the legal owner on the Certificate of Title will differ from your new name);
  • If you are separating/have recently separated (in these circumstances, instructions will be required from both parties);
  • If you are getting married/have recently married (meaning that your legal name has or will change);
  • If you are re-financing/recently re-financed (this may hold up settlement of your sale – important for us to know right at the start);
  • If you are not an Australian Citizen/Permanent Resident (this is extremely important given the new laws regarding foreign purchasers and sellers);
  • If you pay land tax;
  • If you pay local land services rates;
  • If you anticipate your property will sell for $2,000,000.00 or over;
  • If a party to the Contract has passed away; and
  • If you are also looking at purchasing at the same time (and require a simultaneous settlement).

Buying

If you are buying, be sure to make your conveyancer aware of the following, if they apply to you:

  • If you are looking at changing/have changed your name (we will need to ensure that the name on the Contract is correct);
  • If you are getting married/have recently married (again, we will need to ensure that the name on the Contract is correct);
  • If you have a guarantor to your loan (this is important for settlement/mortgage document purposes);
  • If you are re-financing during your purchase (again, very important for settlement purposes);
  • If you need a 5% deposit to be acceptable by the Vendor;
  • If you need another person on the Contract (such as a parent or sibling) for the purposes of loan approval;
  • If you are not an Australian Citizen/Permanent Resident (this is extremely important given the new laws regarding foreign purchasers and sellers);
  • If this is your first purchase; and
  • If you are relying on the sale of another property to be able to purchase.

Whilst the above is not a conclusive list of what your conveyancer needs to know in your first appointment, it is a start. Before you meet with your conveyancer it is a good idea to have a think about how your situation differs or is special from what you would consider a normal situation, and be prepared to discuss this with your conveyancer.

Ready to discuss your next buying or selling property transaction? Talk to the team at Coutts Solicitors & Conveyancers.

Do we need to pay our property grants back?

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If you have recently built a home with your partner, or bought a brand new home, and you have now separated, there is a chance that you will need to pay your property grants back.

Below we explain when you need to pay your property grants back, when you don’t need to, and what else you should know to protect yourself.

If you are selling the property

If you are selling the property for which you received property grants, then there is a high chance that you will need to pay back those grants. The rules for property grants are as follows:

  • New Home Grant

    • If you purchased a home complete and ready for occupation or an off the plan purchase you are not required to pay back the grant.

    • If you purchased vacant land with the intention to build a dwelling:

      • But did not commence construction within 26 weeks of settlement then you must repay the grant; or

      • If you completed construction then you will not be required to pay back the grant.

  • First Home New Home Stamp Duty Exemption/Concession

    • If you purchased vacant land with the intention of building a dwelling; or

    • If you bought a new home that had not been lived in previously, then:

      • At least one purchaser must have occupied the Property for a continuous period of 6 months in the first 12 months. If this has been achieved then the stamp duty exemption/concession does not need to be paid back.

      • If you have not commenced construction or neither purchaser has lived at the property for the required period then the exemption/concession must be paid back on or prior to settlement of the sale.

  • First Home New Home Grant

    • The guidelines above for the Stamp Duty Exemption/Concession are also applicable to the grant.

If one of you is keeping the property

If one of you is going to keep the property and buy the other out, there is a chance that you will not need to pay back the grant money that you have received.

In order to avoid paying back any stamp duty concession or grant received on your Property you must meet the eligibility and residence requirements, which are set out below:

  • New Home Grant

    • If you purchased a home complete and ready for occupation or an off the plan purchase you are not required to pay back the property grant.

    • If you purchased vacant land with the intention to build a dwelling:

      • But did not commence construction within 26 weeks of settlement then you must repay the grant or request an extension to meet the requirements of the grant which would avoid the need to pay back the grant; or

      • If you completed construction then you will not be required to pay back the grant.

  • First Home New Home Stamp Duty Exemption/Concession and Grant

    • Either purchaser must have lived at the Property for a continuous period of 6 months within the first 12 months after settlement or completion of the dwelling.

What should be done from a Family Law point of view?

If you have separated and have property together, you should be entering into a formal family law settlement. To read more about why, please click here.

In addition to providing you with protection and certainty in the future, a formal family law property settlement will also help the party who is going to keep the property avoid having to pay stamp duty on the transfer into their sole name.

A family law property settlement is also important if you have previously received property grants. Any settlement should cover who, out of the two of you, will be responsible for paying back the grants in the event that the conditions set out above are not complied with. If you are not keeping the house, and you are selling your share to your former partner, you may want any settlement to say that you will not be responsible for paying back the grants in the event that your former partner does not comply.

This will help both of you move forward into the next chapter of your lives with certainty.

If you would like more information about this, please contact our office to make an appointment.

Stamp duty exemptions for couples

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Stamp duty exemptions for couples may apply when a person in a marriage or de facto relationship owns a property and wants to put their partner on the title. 

There are also exemptions that apply when separation takes place and you want to transfer the title back into the sole name of one of the parties.

Stamp duty exemptions during the relationship

When you decide to add your spouse to the Certificate of Title you may be eligible for a stamp duty exemption. This will depend on your individual circumstances.

Firstly, in order to receive stamp duty exemptions in this circumstance the property must be residential land:

  • on which your principal place of residence is located;
  • that you intend to construct your principal place of residence;
  • on which you are constructing your principal place of residence; or
  • in which you have shares that allow you the right to occupy the property as your principal place of residence.

Once you have established that the property meets the ‘principal place of residence’ requirements then the following apply:

  • if you are married, then a full exemption will be received when adding your spouse to the Certificate of Title; and
  • if you are in a de facto relationship, then: - you must have been in the relationship for two years or more to receive a full exemption; or - if you have been in the relationship for less than two years then no exemption will apply.

If you would like to know more about adding your spouse to the Certificate of Title please contact one of our Licensed Conveyancers.

Stamp duty exemptions after the relationship

In the event that separation has taken place, one party may want to keep the house and ‘buy’ the other person out. When doing this, you will need to transfer the property into the sole name of the person who is retaining it. This transfer will incur a stamp duty liability on the value of the share that is being transferred to the person who is keeping the property (which is different to the amount that they are ‘paying out’ to the other person).

There are stamp duty exemptions available in this scenario, but only if there is a formal family law property settlement in place. Once the formal settlement is done, the transfer can be effected without stamp duty liabilities occurring.

To find out more about why doing a family law property settlement is important, click here.

Selling Rural Property

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Is the property you are selling considered residential under the Conveyancing Act 1919 (NSW) or is it rural property?

You have been approached by a land owner to sell a large parcel of land which has a residential dwelling on it. So you proceed as though this is the sale of a residential property without considering the sale on its individual facts.

Residential property under section 66Q of the Conveyancing Act 1919 (NSW) is defined as anything non residential, or with a land area of less than 2.5 hectares (6.2 acres).  As such, property in excess of 2.5 hectares (whether it be solely residential or farmland) is considered rural.  Now we know this, what size if the property you have been approached to sell?  Does it exceed 2.5 hectares?

If it does exceed this land area or is non-residential (used solely for farming purposes or otherwise), the details below will apply.

Marketing rural property

Under section 63 of the Property, Stock and Business Agents Act 2002 (NSW) the requirement for an agent to hold a copy of the proposed Contract for Sale states this only necessary in relation to residential property.  As such, marketing of a property deemed rural under the above definition can be marketed prior to the agent holding a copy of the proposed Contract for Sale.

Cooling off periods and Rural Property

Section 66X of the Conveyancing Act 1919 (NSW) requires every contract for the sale of residential property to contain a clause which provides for a 5 business day cooling off period.  This, as you can appreciate, causes confusion because the standard clauses in a Contract for Sale contain this cooling off provision.  However, if you look closely once again it only applies to residential property.

Therefore, if you have established the property is not a residential property under s66Q of the Conveyancing Act 1919 (NSW), then there is no legal obligation for the Contract for Sale of a rural property to contain a cooling off period.

If you have any questions about this topic or other conveyancing related enquiries, please contact Kylie Fuentes.

10 things to think about when Separating - Property

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If you are going through a separation, and own property together (whether you are married or a de facto couple), you will need to decide on separating property between you. Before you are able to reach an agreement with separating property you have, it’s important to have reasonable expectations. Expectations of life after separation and what life is really going to be like for you, sometimes don’t meet up, so it is important to take a realistic approach.

Here are 10 things to think about when separating property:

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What next?

After you have taken the time to consider these things and what you want for the future, it is important to speak to a lawyer about the best way to move forward. It’s very important that a formal family law property settlement is done to protect you both in the future.

To make an appointment to discuss your separation and these issues, contact us today. We can help you plan how to move past these issues and onto the next exciting chapter of your life.

Changes to The State Revenue Legislation Amendment Act 2016

As a Licensed Conveyancer  at a Law Firm, I deal with many clients, from first home buyers to investors and businesses. The State Revenue Legislation Act  effects a large portion of my clients and determines what they can do, the grant amounts they will receive and the tax they need to pay. So when The NSW Office of State Revenue or OSR,  announced changes to the act with The State Revenue Amendment Act 2016, I realised many of my clients would be unaware or confused by the changes. So for those people or businesses undertaking a transaction with the OSR,  and to help you understand the changes, I have summarised the changes to the act below. The changes include:

  • To be classified as a "Substantially renovated home" for the purpose of the First Home Owner Grant and First Home New Home Exemption or Concession from Duty, the home must now be created by renovations that remove or replace all, or substantially all of the building.
  • To be classified as a "home built to replace demolished premises" for the purpose of the First Home Owner Grant, the home must be built on the same land that the demolished premises stood.
  • Unoccupied land which is eligible for the principal place of residence land tax exemption that is occupied by a person other than the owner can now be exempt for a period of up to 4 years from when that person stops using the land for residential purposes.
  • Wages that are paid to a person by a body corporate wholly owned by at least 2 local councils, for activities carried out for those councils, are now exempt from payroll tax.
  • After a successful objection or review, the chief Commissioner must now pay interest on a refund made to a taxpayer.
  • Enterprises may now voluntarily report amounts which are not classified as unclaimed because the total is $100 or less. The amount must be paid to the Chief Commissioner and can be claimed by the owner of the money.
  • The Chief Commissioner may now allow an owner of unclaimed money whose right to the money has expired to still claim the money.
  • References to anything done or held by a trustee of a unit trust scheme as trustee in respect of corporate reconstruction transactions and corporate consolidation transactions that are exempt from duty now extend to include anything done by or held by a custodian of the trustee of a managed investment scheme.

For more information on the The State Revenue Legislation Amendment Act 2016 click HERE.

If you need legal advice in relation to a property or business transaction. Coutts can give you the advice you need. 

5 tips to having funds ready on your settlement date

As a licensed Conveyancer I work with hundreds of properties (and people) with the exchange of ownership and transferring of funds. I have seen the pitfalls that can occur when purchasers are not diligent with their funds and do not ensure they have the correct amount in their account upon settlement. Your conveyancer can guide you, but in the end it is up to you to make sure you plan your finances correctly and have the correct funds in your account. To help you plan for that day here are my 5 tips to having funds ready on your settlement date, ensuring that you are not short of funds.

  1. Make sure that when you are borrowing money that your broker/banker includes the following in your loan amount or ensure that you have these funds available in your savings account on top of the purchase price:
    1. Stamp duty;
    2. Legal fees:
    3. Pest & Building fees;
    4. Strata Report fees;
    5. Title Insurance;
    6. Council/Water (approximately $2,000.00 + ); and
    7. Bank registration fees (approximately $500.00 +)
  2. Ask your broker/banker to sign an authority to debit shortfall account. This means that the bank will be able to debit from your nominated bank account (provided that it is with the same bank). This will save you from running around the day before settlement to try and get cheques for settlement.
  3. If you are a cash purchaser you can transfer approximate funds into your solicitors/conveyancers trust account well ahead of time and in stages. This will also save you time and money in running around the day before settlement to obtain cheques.
  4. Ensure that you do not overspend – set yourself a budget. When at an auction and the bidding price keeps going up and up, don’t make emotional decisions. Make sure you have a budget. Over spending could mean that you will have to contribute more of your own savings into the property or if you have lack of savings then borrowing off family or friends.
  5. If you are buying and selling and you are doing your budget, ensure that you add break costs for your discharging bank. If you have recently fixed your interest rate break costs can be quiet expensive and people forget about break costs. Calling your existing bank ahead of time and questioning the break costs could be very beneficial for you. They may even have a deal if you buy and sell and use them as the incoming bank.

If you would like advice on your property matter be sure to contact Coutts today.

Can I sell my home to a buyer with 5% deposit?

If you have your house on the market, you are selling at a time where  property prices and mortgages are high, buyers will need to offer a deposit to purchase, but the current market conditions mean it is uncommon that a buyer will have a 10% deposit. However, the Contract for Sale of Land stipulates that a 10% deposit must be paid on exchange of Contracts. So this leads many people to question " Can I sell my house to a buyer with a 5% deposit? " and if so, how is this done? and is there any risk? The simple answer is yes you can and yes it does come with a risk, but there are ways to minimise the risk.

You can accept any deposit you wish under the Contract for Sale as long as it is agreed to by all parties, but here is the catch…

  • If you agree to accept a 5% deposit and if you ever had to terminate the Contract on your buyer, then you would have to try and recover the balance of the 5% due to you under the Contract. This would be done through litigation (going to court), which is an expensive process with no guaranteed outcome.
  • If you do not feel comfortable agreeing to a 5% cash deposit, you can always ask your buyer to obtain a 10% deposit bond. A Deposit Bond acts as a substitute for the cash deposit between signing a Contract and settlement of a property. At settlement the purchaser would then pay the full purchase price including the deposit. A Deposit Bond can be issued for all or part of the deposit amount required, up to 10% of the purchase price.

Thus, it is safer to ask for a 5% cash deposit together with a 5% deposit bond, which would total your whole 10% deposit.

Ideally, it is up to you whether you agree to accept a 5% deposit, just remember that it does come at a risk. Even though you are lead to believe it is “common practice” you are entitled to the 10% deposit under the Contract for Sale, you do not need to accept the 5% even if there is a “special condition in the Contract” as if you do accept the lesser deposit,  that is most likely all you will get if the Contract is terminated.

If you are thinking of selling your property you will need a contract of sale before you market your property. This can be done by a licensed conveyancer. Contact Coutts Solicitors & Conveyancers.

What to do if a tenant has breached the lease

So your tenant has breached the Lease and you want to know what to do next? Under what circumstances has your tenant breached the Lease?

  • Have they breached a fundamental obligation under the lease;
  • Are they behind in rent (i.e more than 14 days in arrears); or
  • Failure to comply with notice served by the landlord for a breach under the Lease.

Repudiated the Lease

If the tenant has breached a fundamental obligation under the lease, then this may be deemed repudiation by the courts.  A fundamental obligation under a lease may include:

  • Abandonment of the premises;
  • Abandonment of premises including a failure to pay rent and other covenant breaches;
  • Gross breaches of covenant for quiet enjoyment.

If you, the landlord, then wish to treat the breach as a repudiation you can then terminate the lease.  To terminate the lease the landlord needs to serve a notice specifically stating the breach leading to repudiation and then state the date the lease will come to an end.  After this date the Landlord can re-enter the premises.

Rental Arrears

If the tenant is in arrears by more than 14 days the Landlord can proceed with re-entering the Premises.  The items left at the premises by the lessee under clause 12.3 of the Lease become the property of the lessor and you can charge the lessee for the cost of making good the premises (back to the state and condition that the lease required the property to be kept in) and for the removal of the remaining items.

Under clause 12.6 you must do all things to avoid increasing any losses including by selling the items left by the lessee and applying any security deposit or bank guarantee to the arrears.

Failure to comply with Notice

The Landlord must ensure they serve a notice clearly stating the particular breach complained of.  If that breach can be remedied, then the Landlord can require the Tenant to remedy the breach.  If the Landlord has the right to claim compensation or the breach then the notice must state the amount of compensation being sought.

Once that notice is served the tenant has until the date stated (which must be a reasonable period of time in the circumstances) in the notice to remedy the breach or pay the required compensation then the Landlord can act on their right to re-enter the premises.

If the tenant does not comply with the notice within the period of time required then the Landlord gains the right to re-enter the premises.

If you would like to know more or seek specific advice on a particular situation please contact Kylie Fuentes at Coutts Solicitors and Conveyancers.

What is a Put and Call Option?

A Put and Call Option is an agreement, usually between a landowner and a Builder. The agreement allows the landowner to allocate certain blocks to the Builder for their exclusive right to sell to third parties, for an ‘option fee’. The benefit to the landowner is that they have a guaranteed sale because even if the Builder doesn’t find a third party, the ‘put’ option allows them to make the Builder purchase the lot. The benefit to the Builder is that they get to package the land up as a house and land package, guaranteeing their build on that block of land. The risk to the Builder is that if they do not find a third party to purchase the block of land, they are required to.

There is also such thing as just a Call Option. The difference here is that the landowner no longer has the option to require the Builder purchase the lot however if the Builder doesn’t nominate a third party to purchase the lot, they may forfeit their option fee.

Option Deeds entered into between landowners and Builders include certain terms and conditions. Usually the most crucial is the Call Option expiry date. The Call Option expiry date is the latest date that the Builder has to nominate a third party to purchase the land. In most cases, in order to nominate a third party purchaser to purchase the land, the Builder must ensure that a both building and land contracts have been entered into by the Call Option expiry date.

If you would like advice on Put and Call Option deeds please contact Melina Costantino, expert in Conveyancing for Builders and Developers at Coutts Solicitors & Conveyancers.

First Home Owner Grant reduced

The First Home Owner Grant has been reduced to $10,000 as of 1 January 2016. The First Home Owner Grant (New Homes) scheme has been available for several years to assist eligible first home owners to purchase a new home or build their home by offering a grant.  The grant amount is determined by the date of the eligible transaction. This is the date of the contract to purchase a new home or contract to build a home.

  • For eligible transactions made on or after 1 January 2016, the grant amount is $10,000.
  • For eligible transactions made between 1 October 2012 and 31 December 2015, the grant amount is $15,000.

Here is a re-cap on the some of the terms and conditions associated with the grant:

  • New homes only – this means a home that has not previously been occupied, sold as a residence, renovated or built to replace demolished premises
  • Individuals only – not applicable to companies or trusts
  • If you OR your spouse OR your de facto has owned a property in Australia before, you are ineligible
  • At least one of the applicants must be a permanent resident or Australian Citizen
  • The total value of the property cannot exceed $750,000
  • At least one of the applicants must live in the home as their principal place of residence for a continuous period of six months commencing within twelve months of being the owner or if you are building, within 12 months of construction being completed

Other things to consider:

  • The grant is not available for the purchase of vacant land however where you have entered separate Land and Building Contracts:
    • Once you are making an application for a construction loan, you can apply for the grant through your financial institution and the grant is available to draw down from your first progress payment; or
    • You can apply for the grant directly from the Office of State Revenue once construction of your home has been completed provided the application is lodged within 12 months of completion of construction.

Please note: If you have not yet claimed the First Home Owner Grant but previously entered into a Contract for the purchase or construction of a new home and the date you entered that Contract is before 1 January 2016, you are still eligible for the $15,000.

This is a summary only. For more detailed information about First Home Buyer incentives please click through to this link http://www.osr.nsw.gov.au/first-home-buyers otherwise feel free to contact our office.

*This information is current as at February 2016

Swimming Pool Compliance 2016

Do you have a swimming pool or spa? Are you looking at selling your home?If you said yes to both of the above questions then the Swimming Pool Compliance 2016 requirements will effect you. As of 26 April 2016 all homeowners selling their properties need to provide one of the following: 1. a valid compliance certificate from Council or a qualified private certifier; or 2. a Final Occupation Certificate that is less than 3 years old. One of these documents must be attached to the Contract for Sale so make sure when you are instructing your conveyancer that you provide this information. If you are in a strata complex you are affected by this new legislation also, so make sure the Owners Corporation have a compliance certificate for any pools within your complex.

If you have any questions about the new legislation click here to contact the licensed conveyancers at Coutts.

Retirement Village Contract 101

For some, the decision to downsize and start afresh in a retirement village is liberating. For others it is a time of anxiety and of good byes. What can compound a person’s anxiety is the huge Retirement Village contract and the lease to sign before they can move into their new place. There are a few general things to look out for in Retirement Village contract that are set out below. However, this article is no substitute for actual legal advice relevant to the particular contract you are considering.

What are you actually buying?

There are several ways to buy into a village:

  • Leasehold: usually meaning you will buy your unit and lease the land it is on. This is probably the most common way to buy into a village. In addition to your lease you often enter into a service agreement that sets out what the village operators will provide and, importantly, what they will charge you.
  • Right of occupancy: another common way to buy into a village, this method sees you buying the right to live in your unit. It is likely you will also need to enter into a service agreement.
  • Freehold: meaning you buy your unit- or most probably a villa or townhouse- and the land it is on outright.
  • Strata: meaning you buy your lot (ie. your unit) and own a share in common property (such as pathways, pools ect…).
  • Rental: occasionally it is possible to rent a unit, but this is not common in private retirement villages.

Work out the total cost

A common difficulty faced by a person comparing the various costs of two villages is that they find themselves trying to compare apples with oranges. This is because there are quite a few fees that are involved when moving into a retirement village. One may have a fairly low daily maintence fee (also called an ongoing fee or recurrent fee) but a very high exit fee. Another may charge almost twice as much per day but when you leave you keep much more of the sale price in your pocket. When you are trying to compare two different villages, jot down all of the fees and do a table showing you what you will pay over 5 years, 10 years and 15 years. This is a good way to find out the true cost of a particular village. A financial adviser that specialises in retirement villages and aged care advice can be helpful in this respect.

Exit fees

Often called the Deferred Management Fee, all villages charge a fee on your exit. Some villages will load this fee in the first few years of your stay, meaning they make most of the fee even if your stay is short.  Other villages’ exit fee will increase gradually over time. You need to be aware of how this fee is structures as if you know that you will only stay for a brief period you would do well to find a village that offers a gradual increase to its exit fees.

Selling the unit

Check if the contract allows you to use your own agent and sell your unit. Some contracts will only allow the operators to sell your unit. If the contract also provides that you have to continue paying all ongoing fees until sold finding a buyer might be low on the owner’s priority list.

Other items to watch out for

  • High increases in ongoing costs, such as electricity and telephone- in NSW these increases must be in line with CPI, unless either the residence committee has agreed or the increase has been Court ordered.
  • Are you allowed a pet?
  • Are you allowed to modify your unit if, for example, you need to later on install a disabled access shower?
  • Refurbishment costs: some contracts will require you to refurbish your unit before selling it. The contract should state if only a clean unit with any damaged repaired is required or you will need undertake more costly work, such as new carpet.
  • Costs of improvement to capital investments trying to be passed on to residents. Residents are responsible for maintenance costs only, not for the costs for capital improvements.

The operators of a village are not necessarily trying to trap people into contracts with hidden costs. In fact they often urge people to get legal advice before signing up. The complex fee structure has developed in part so that villages can remain affordable but still be able to operate as a viable business unless it is run on a not-for-profit basis.

Whether or not moving into a retirement village is the right option for you is a personal decision. However, you do need to be fully informed of all of the financial implications before you sign up. Particularly what your financial position will be if you have to move out of a village and into a nursing home- will you have enough money following the sale of your unit to pay your bond? Try to compare a few different places and request a copy of their contract, lease and service agreement. If you cannot work out the true financial costs of one place over another seek the advice of a financial planner and seek legal advice on the terms of the contract and the lease before you sign up.

For a review on your Retirement Village Contract call Coutts Solicitors and Conveyancers on 1300 268 887.

Title Insurance

What is title insurance?

Title insurance is a specialised insurance that provides protection to home owners against unknown and hidden risks that may exist at the time of purchasing a property.

Why do you need title insurance?

Even the best conveyancer or property lawyer cannot identify all potential risks to your property during the conveyancing process.  Title insurance provides that extra level of protection against the unknown.

So, what risks can title insurance cover?

  • Illegal or unapproved building works
  • Survey or boundary defects
  • Registration gap
  • Fraud, forgery and identity theft
  • Planning and title defects
  • Outstanding rates and taxes
  • Zoning issues
  • Breach of relevant laws
  • Forced removal or remediation of structures due to thirds party work

Top points for title insurance

  • It is a one-off premium
  • There is no excess on claims
  • No fault claims – no fault or negligence needs to be proved
  • No cap on cover apart from policy amounts

What is the cost to you?

The premium varies depending on the value of the property and the type of property you are purchasing, enquire with your conveyancer or property lawyer to find out more.

If you would like to know more about title insurance please contact Coutts on 1300 268 887.

What are Deposit Bonds?

Deposit Bonds are becoming a common part of the conveyancing process, especially with ever increasing property prices.  So it is important for vendors and purchasers alike to understand what Deposit Bonds are.

What is a Deposit Bond?

A Deposit Bond is a substitute for all or part of the typical cash deposit paid on exchange of Contracts in the conveyancing process.  It almost like a form of insurance where the institution providing the deposit bond is saying the purchaser is good for the money.

Deposit Bonds can be for short terms of up to 6 months or long terms up to 48 months (this is beneficial if purchasing off the plan).

Where can you get a Deposit Bond from?

Deposit Bonds can be obtained through specific companies that only deal in deposit bonds, or through your banking institution.

What is required to obtain a Deposit Bond?

Documentation required to support your application varies between institutions, however as a general guide, you may need:

  • Copy of your loan approval;
  • Evidence of funds to complete the purchase;
  • Signed and dated Contract for Sale (if selling existing property)

What is the cost of a Deposit Bond?

The cost varies between institutions and will vary depending on the value of the deposit bond and how long you need it in place.

Benefits of a Deposit Bond

The benefits of a deposit bond vary between the individuals circumstances, however some top benefits include:

  • Provide a greater flexibility at auctions, as the deposit bond can provide you with a maximum deposit of 10% of your maximum bid. These types of deposit bonds are not made in favour of a specific vendor and can be issued for a 6 month term.
  • First home buyers may not always have a full 10% deposit, but can get funding for 95% of their purchase, so instead of committing to a cash deposit a deposit bond (possibility with the need for guarantor) can be obtained to ease the pressure.
  • When buying off the plan, instead of having your 5% or 10% deposit being invested in a low interest earning account for up to 48 months, you can leave your money where it is and obtain a deposit bond for the period of the Contract.

If you would like to know more please contact one of the Licensed Conveyancers at Coutts on 1300 268 887.

What is a Sunset Clause?

There has been a lot of reports in the media lately regarding sunset clauses and changing the way they operate.  To best understand the need for reform of these clauses, its important to first understand "What is a sunset clause?"

What is a sunset clause?

A sunset clause most commonly appears in a contract for off-the-plan sales, either for apartment blocks or unregistered vacant land.  This clause sets the date that a contract may be rescinded (wound back) or cancelled without penalty, by either party if conditions are not met.

Sunset clauses may allow a period of 12-36 months (if not longer) for the developer to have the property ready for settlement.  They also provide that this period can only be extended by a further 12 months past the original date.

What does a sunset clause achieve?

The intention of a sunset clause is to protect the purchaser from being tied to a development that never gets completed, and to protect the developer by ensuring that purchasers cannot pull out of settlement if the project is completed in accordance with the sunset clause.

What is the current situation?

There has been a great deal of media attention on sunset clauses due to the tactics of some developers to use the sunset clause to their advantage in a market where we are seeing great price increases.  Allegations have been made that some developers are delaying construction to push past the sunset date.  This allows the developer to pull out of the contract and then put the property back on the market for a higher price.  In the current market this can yield significantly higher returns.

This affects purchasers as their deposit has been tied up in a development that has essentially put them out of the market since the time they paid their deposit.  This could be for a period of 2 years or more, meaning many can now not afford what they originally signed up to purchase.  It also affects confidence of purchasers, particularly in relation to off-the-plan sales with those involved in the above situations stating they will not consider purchasing off-the-plan again.

What is being done to prevent this in the future?

Consumer protection is high on the agenda of Victor Dominello, the Minister for Innovation and Better Regulation.  In the past week he has announced two potential options to prevent or avoid these situations in the future.  The options are:

  1. To imply a term in all off-the-plan contracts that only allows the purchaser to rescind. This arrangement aligns with that in Western Australia. 
  2. To imply a term where if the vendor rescinds a contract under a sunset clause and then resells the property within a certain period of time, the purchaser is entitled to damages equal to the difference on sale price between the two contracts.

Such proposals will turn the Sunset Date clause on its head.  Purchasers previously affected by the underhanded tactics of developers have welcomed the reforms with the hope no one will have to endure their experience in the future.

Consultation with various stakeholders regarding off-the-plan contracts and the reforms have commenced and the wider community can take part by completing the survey at http://www.fairtrading.nsw.gov.au/ftw/About_us/Have_your_say/Buying_property_off_the_plan.page.

If you would like to know more about off-the-plan contracts or sunset clauses please contact the Conveyancing Team at Coutts Solicitors and Conveyancers on 1300 268 887.

Can "friends with benefits" become friends with inheritance benefits?

Can an ex personal friend claim inheritance benefits from your estate if you die? In March 2014 the Supreme Court of New South Wales considered this question. In this case, a wealthy man died after a battle with cancer. He left his multi-million dollar estate to his second wife, Lisa,and their two children. His first wife, Adele, sought provision from the estate.

He had met Adele in the US in 1988 and they were married shortly afterwards. They divorced in 1995 and did not have a Family Court Property orders made at the time. The reason they divorced was that they could not agree on whether to permanently settle in Australia or the US. They had no children together. It seems that they both continued a close friendship after their divorce and Adele held hopes they would resume a romantic relationship. He made representations to her, her sister and her father that he would look after her. He married Lisa in 2009 and together they 2 children. At this time it seems his contact with Adele became infrequent.

In granting Adele provision, the judge considered relevant the fact that the estate was very large and in providing for her, Lisa and the children were still being taken care of. He also decided that the lack of fault or acrimony attached to the breakdown of the marriage, her ongoing friendship and the lack of a family law settlement were relevant factors in Adele’s favour. Adele had little financial means of her own. She was granted $200,000.00 from an overall estate of approximately $11,000,000,000.00

This case again highlights some of the factors a court will consider when a previous partner is seeking provision from an estate. It is also a timely reminder of the dangers of testators telling people that they will be looked after in the Will, but then not updating their Will.

It is also an important for anyone who has ended a relationship- whether it is a marriage or a de facto relationship- of the importance of having a formal property settlement. Even if the split is mutual and friendly, it is important to formalise the end of the relationship from a financial point of view. The Judge even commented that had there been a property settlement following the end of their relationship, the first wife would not have succeeded in making a claim against her ex-husband’s estate.

If you need to clarify your circumstances for either a separation or Will call Coutts Solicitors & Conveyancers on 1300 268 887.

The New Home Grant Scheme

I have many clients who ask me about the New Home Grant Scheme with government incentives for non-first homebuyers. Non first home buyers are someone who owns property or has owned property before. It pays to buy vacant land, new homes or off the plan … it pays $5,000! That’s right, for the purchase of vacant land, brand new home or off the plan, the government will give you $5,000 toward the payment of stamp duty as part of the new home grant scheme.

Here’s the ‘catch’ (you knew this was coming):

  • The value of the new home can’t be more than $650,000
  • The value of the vacant land can’t be more than $450,000
  • Purchasers must be Australian citizens, Australian residents or an Australian-owned bodies
  • Each purchaser is limited to one grant per financial year
  • For vacant land, construction of the home must begin within 26 weeks of the completion of the purchase
  • The grant is not available for the purchase of an existing home to knock down and build and a new home on the land
  • Doesn’t apply for vacant land or brand new homes intended to be used for commercial or industrial use

Provided you comply with all of these requirements, you’re eligible! What are you eligible for? It’s called the New Home Grant Scheme and it’s a $5,000 contribution toward your stamp duty. Sounds good to me, I mean stamp duty never looked so good for non-first homebuyers, so what are you waiting for? If you would like to apply for this $5,000 amount our Conveyancing department can help you apply.

Has this sparked more questions? Contact us on 1300 268 887 or click here to register for a call back.

*This information is current as at January 2015.