Do I need a solicitor?

Headshot of Suzanne Hindmarsh - Conveyancer at Everingham Solomons TamworthMost people only seek legal advice for problems when they arise – when going through a divorce or after an accident for example. But what if your lawyer is like a best friend you didn’t know you needed?

If you consult a lawyer BEFORE a legal issue arises, they can help you anticipate and prevent serious legal problems, saving you a lot of money and heartache in the long run.

If you’ve never worked with a lawyer before, some common situations where getting legal advice from a lawyer may be necessary include:

• The sale or purchase of a house, property or business
• An accident involving personal injury or property damage
• A family problem such as divorce or a child custody dispute
• Workplace disputes including discrimination or harassment on the job
• When you are starting a business
• The drafting of a will, trust, or estate plan

So when should you talk to your solicitor? It is best to communicate with your conveyancer/solicitor as soon as you have decided to embark on a new venture.

For example if you plan to purchase a property – you should get your solicitor to review the contract before you sign it. Otherwise you may encounter problems of not completing the contract on time, or there may be disputes over inclusions which were not itemized on the contract prior to exchange. These and many other problems can be avoided if the purchaser consults with their conveyancer/solicitor from the very beginning.

Another example is when you are selling a property. By law you must have a contract of sale drafted BEFORE you market a property. A marketing contract is provided to your real estate agent for the purposes of advertising your property. However, if your property has been on the market for a long time or you choose to put the property up for auction. Before doing so, your marketing contract should be reviewed as there could have been legislation changes that affect the marketing contract. If the agent uses the outdated marketing contract as the auction contract and proceeds to auction. This can cause issues for the vendor allowing a purchaser to withdraw from the contract up to the time of settlement. This can have devastating consequences and costs for the vendor.

Another time that is especially critical to see your solicitor first is when purchasing a business. Once committed, it is very difficult or costly to change business entities if you have not selected the most tax-advantageous business structure. Related issues such as the transfer of employee entitlements again can be very costly if not adequately covered in the initial negotiations.

At Everingham Solomons, we have the expertise in Property Law, Business Law, Family Law, Wills and Estates to help you make the right decisions. The sooner you speak to us, the more we can help because Helping You is Our Business.

Click here for more information on Suzanne Hindmarsh.

 

What happens to a mortgage for land when a person dies?

Headshot of Suzanne Hindmarsh - Conveyancer at Everingham Solomons TamworthAfter your funeral and your family has had time to process the loss of a loved one, it is necessary for the executor to deal with the deceased’s assets and liabilities.

As land is involved and a Will was made, Probate will need to be obtained. This is a document issued by the Supreme Court acknowledging the validity of the deceased’s Will and authorizes the executor/s to administer the Estate.

If a Will was not left, the next of kin of the deceased will need to apply for Letters of Administration. This is a document issued by the Supreme Court authorizing the next of kin (known as the “Administrator”) to administer the Estate according to intestacy rules.

The executor needs to contact the Bank to advise of the death and provide certified copies of the Death Certificate and Probate in due course.

There are three ways you can hold land in NSW and transfer the land.

They are:-

Sole Owner

The deceased holds land only in their name. The land will be dealt with as part of the deceased’s Estate. Subject to the deceased’s Will, the land may be sold or left to a beneficiary.  If left to a beneficiary, a new loan needs to be prepared. Written consent from the Bank needs to be obtained prior to the land being transmitted to the beneficiary. A Transmission Application form is required to be lodged with NSW Land Registry Services through the electronic conveyancing platform called PEXA.

Joint tenant

The deceased and another person holds the land as joint tenants. This is the most common way married or de facto couples own land. Whilst each person holds an individual interest in the land, when one person dies, the legal concept of “survivorship” takes place. That is, the interest of the deceased person will automatically pass to the surviving joint tenant. The land does not form part of the deceased’s Estate. The surviving joint tenant needs to speak to the Bank about continuing on the mortgage payments and the Bank needs to provide their consent prior to the lodgement of a Notice of Death form to NSW Land Registry Services by PEXA.

Tenants in Common

The deceased and another person are co-owners of the same land holding as tenants in common in equal shares or hold an unequal share, for example 80/20. When a person dies their individual share in the land does not automatically pass to the other surviving owners. Instead, the deceased person’s share in the land will form part of their Estate and be distributed in accordance to their Will or if they did not leave a Will, by the laws of intestacy. If the land is not to be sold but instead to be transmitted to a beneficiary, the beneficiary needs to prepare new mortgage documents. A Bank’s written consent needs to be provided prior to lodgement of Transmission application to NSW Land Registry Services by PEXA.

At Everingham Solomons, we have the expertise to assist you with all legal matters regarding your land, because Helping You is Our Business.

Click here for more information on Suzanne Hindmarsh.

Solicitors Trust Accounts

Headshot of Suzanne Hindmarsh - Conveyancer at Everingham Solomons TamworthSolicitors Trust Accounts are regulated by the Legal Profession Uniform Law (NSW), Legal Profession Uniform Law Application Act 2014, the Legal Profession Uniform Law Application Regulation 2015 and Legal Profession Uniform General Rules 2015.

These laws are in place to regulate the conduct of money held in Trust for clients. Such money might include funds required to settle property purchases, to pay stamp duty, probate filing fees, for distributions in deceased estates, for debts recovered, for settlement of claims, or funds required to pay legal expenses.

Trust accounts are subject to external examination every year, as well as periodic random audits by the Law Society’s Trust Department. These external examiners and auditors will check transactions through the Trust accounts to ensure they comply with the Regulations.

Solicitors are required to have written instructions to transfer funds from the Trust account. Often these instructions are incorporated into the Costs Agreement the firm enters into with the client.

Contrary to a common misconception, Solicitors do not earn any interest on clients funds held in their Trust account. In this state, all interest earned on funds in Solicitors Trust accounts are paid directly to the Law Society of New South Wales.

Clients may direct, if a significant amount is involved for a lengthy period, that their Solicitor deposit their Trust funds into a Controlled Money account to earn interest whilst funds remain under the control of the Solicitor.

On completion of a matter where Trust transactions have occurred, a Solicitor is required to provide a Trust Statement to the Client. On 30 June each year, subject to some exceptions, a Solicitor is required to provide Trust Statements to all Clients where there has been Trust transactions within the preceding 12 months.

Should you have any queries about Trust accounts, we would be happy to discuss them with you because Helping You is Our Business.

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When does “approval” of finance, really mean you have the loan?

Headshot of Suzanne Hindmarsh - Conveyancer at Everingham Solomons TamworthYou’ve been saving hard and have the deposit to purchase your first home. You’ve looked at many houses and finally found the one. You’ve made an offer through the real estate agent and your offer has been accepted by the vendor.

You organize your pest and building reports. You know your finance is arranged as you’ve been pre-approved by your chosen lender. WRONG!

A pre-approval of finance from a lender is only an “indication” of the amount the lender considers you may borrow based on your previous financial circumstances.

Until you make a formal loan application for the house you have chosen and subsequently you receive written confirmation of finance approval from your lender noting the details of the house you intend to purchase plus a signed loan offer, the lender is under no obligation to provide you with finance.

If you were to exchange contracts based on the “pre-approval letter”, you may not be able to complete your purchase as the finance has not been formally approved for that house.

Not being able to complete your purchase may result in the vendor being able to terminate the Contract, keep your deposit, sue you for any shortfall in the price upon resale of the property (if any) and also sue you for costs and expenses associated with your inability to complete the Contract.

Once your offer has been accepted, you need to make an appointment with your lender as soon as possible to complete a loan application for your chosen home. In most cases, your lender will arrange for a valuation of the property to be carried out to ascertain whether it will provide them with adequate security for their loan.

Many lenders need to submit your loan application to their mortgage departments located either in Sydney, Melbourne, or Adelaide. With Covid-19 in the mix, this takes time so you need to contact your lender quickly as this will enable you to safely exchange contracts and secure the property you wish to buy.

Some lenders provide a letter stating your loan has been approved subject to various conditions set out in the loan contract. This means you must wait to see the loan contract document to find out what terms and conditions you must comply with before the loan will be approved.

At Everingham Solomons, we take our role of protecting your interests very seriously. We work hard to help you secure the home you wish to purchase and make sure you do not end up in the position where you risk incurring a significant financial loss because you were unable to complete your contractual obligations. It might seem like it can take a long time before contracts are exchanged, but it’s all in the interests of looking after you – our client, because Helping You is Our Business.

Click here for more information on Suzanne Hindmarsh.

Conveyancing Terminology

Buying or selling real estate is an exciting prospect. The actual process of transferring ownership in land can be quite daunting for many people. Sometimes a buyer/seller of property has difficulty understanding conveyancing terms their solicitor/conveyancer uses.

The following are some commonly used terms you will encounter when buying or selling property in NSW:-

Vendor: the owner of the property

Purchaser: the buyer of the property

Mortgagee: the Bank providing monies to a person for the purchase of property

Mortgagor: the person borrowing the money from the Bank to purchase the property

Offer: The price the purchaser puts to the vendor (usually through a real estate agent) for the property. Vendor acceptance of the offer does not mean the purchaser has entered into a contract to purchase the land, as this happens on exchange.

Contract for Sale of Land: a document prepared by vendor’s solicitor/conveyancer evidencing the legal agreement between the vendor and the purchaser

Deposit: a sum usually 10% of the purchase price payable to the real estate agent on exchange as a vendor safeguard. The deposit is held by the agent until settlement at which time it is released to the vendor.

Bank Deposit: Your bank may require you to have 20% deposit representing the amount of your savings before it will lend to you.

Exchange: Is when a duplicate copy of the Contract is signed by each of the parties and the documents are “”swapped” so the vendor has a copy of the contract signed by the purchaser and vice versa. Once exchange has occurred, the parties are contractually bound and are unable to pull out of the sale/purchase without suffering serious consequences.

PEXA: stands for “Property Exchange Australia”. It is an electronic settlement system for property transactions including payment of settlement monies, duties, taxes, and any other disbursements and the electronic lodgment of dealings to the Land Registry.

Client Authorisation: a form signed by the vendor/purchaser authorizing their solicitor/conveyancer to act for them in the online workspace of PEXA.

Verification of Identity (VOI): Each vendor/purchaser will need to provide identification documents i.e. passport, driver’s licence, medicare card, birth/marriage certificate to their solicitor/conveyancer for identifying the parties to the transaction.

Completion period: The time between exchange and settlement. The vendor usually stipulates a period between 28 days and 42 days for completion to occur.

Settlement/Completion: the day when ownership of the property is transferred from the vendor to the purchaser. The purchaser supplies the balance of monies to pay for the property (taking into account the deposit already paid) and the vendor provides the documents required for the purchaser to be listed as the registered proprietor of the property. This all takes place on the PEXA platform in most circumstances.

Congratulations: the words you will hear from your dedicated Everingham Solomons solicitor/conveyancer once your sale/purchase has been completed because Helping You is Our Business.

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Your Certificate of Title and Identity Fraud

What is a Certificate of Title or eCT?

If you are a home owner, your Certificate of Title (land title deed) is an instrument executed by the Registrar General at the Land Registry Services, and is evidence of your ownership of your property. In 2018, all paper Certificates of Title held by the banks were converted to electronic certificates of title called eCT’s.

Where is the Certificate of Title normally kept?

If your property is mortgaged, your eCT is held by the mortgagee – the person or entity who lent the money to you, for example the Bank.
If you do not have a mortgage, your paper Certificate of Title should be kept in a safe place, for example:

• With your solicitor
• In a safe deposit with the Bank
• In a safe place with your other personal papers

What happens if a Certificate of Title is destroyed or misplaced?

If a Certificate of Title is destroyed or misplaced a new Certificate of Title may be obtained from the Land Registry Services. In order to obtain this new document, you must meet the requirements of the Land Registry Services which include:

• Completion of an Application form
• Documents proving your identity
• Documents proving your ownership of the land

Identity Fraud

In the recent case of Chandra & Anor V. Perpetual Trustees Victoria Ltd & Ors, a false application was made for a new Certificate of Title, and as a result the property was able to be mortgaged without the homeowners consent.
Some steps to prevent identity fraud

• Always keep your personal documents in a safe place
• Never sign a document you are unsure of
• Never divulge your passwords or PIN numbers to anyone
• Lock your mailbox or obtain a Post Office box
• Only provide personal information if it is necessary

If your property is not mortgaged, keep your paper Certificate of Title in a safe and secure place.

At Everingham Solomons, we have the expertise to assist you with all legal matters regarding your home, because Helping You is Our Business.

Click here for more information on Suzanne Hindmarsh.

 

Residential Tenancies Act – Water Efficiency Measures (Part 7)

 

There have been amendments as to what water efficiency measures a landlord needs to undertake under Residential Tenancies Act 2010 and new Residential Tenancies Regulation 2019 which commenced on 23 March 2020

Before a landlord is able to pass on water usage charges to the tenant, the residential property must be separately metered, meet the water efficiency measures prescribed by the Residential Tenancies Act, and the charges must not exceed the amount payable by the landlord (according to the water supplier’s bill or other evidence).

The changes provide additional water efficiency measures, including all taps and toilets on the property need to be checked at the start of a tenancy so any leaks are fixed. Taps and toilets must also be checked whenever any other water efficiency measures are installed, repaired, upgraded or any leaks fixed. This requirement applies to existing and new tenancy agreements from 23 March 2020.

From 23 March 2025, all toilets in rented properties must be dual flush with a minimum three-star rating in accordance with the Commonwealth Water Efficiency Labelling and Standards (WELS) scheme. The WELS scheme uses a rating system to help consumers make informed choices about the water efficiency of products they buy.

Landlords who intend to replace or upgrade existing toilets in their property should consider installing dual flush toilets with a minimum three-star WELS rating to meet the water efficiency requirements by 23 March 2025.

If you need assistance with any property or land matters contact Everingham Solomons because Helping You is Our Business.

Click here for more information on Suzanne Hindmarsh.

 

Residential Tenancies Act – Break fees payable by tenant (Part 6)

ReThere are new break fees payable by a tenant who wishes to break a fixed term lease under Residential Tenancies Act 2010 and new Residential Tenancies Regulation 2019 which commenced on 23 March 2020

Mandatory break fees apply to all fixed-term agreements of 3 years or less, when a tenant ends the agreement early. This applies to agreements that are entered into from 23 March 2020.

The break fees are:

• 4 weeks rent if less than 25 per cent of the agreement has expired
• 3 weeks rent if 25 per cent or more but less than 50 per cent of the agreement has expired
• 2 weeks rent if 50 per cent or more but less than 75 per cent of the agreement has expired
• 1 weeks rent if 75 per cent or more of the agreement has expired

For example:

• If 7 months of a 12 month tenancy agreement (or 58 per cent) has expired, a tenant would need to pay a fee equal to 2 weeks rent to the landlord to end the agreement early
• If 2 months of a 6 month tenancy agreement (or 33 per cent) has expired, the tenant would need to pay a fee equal to 3 weeks rent to the landlord to end their agreement early

If you need assistance with any property or land matters contact Everingham Solomons because Helping You is Our Business.

Click here for more information on Suzanne Hindmarsh.

Residential Tenancies Act – Tenants damage and modifications (Part 5)

There have been amendments as to what constitutes damage and the rules regarding removing modifications under Residential Tenancies Act 2010 and new Residential Tenancies Regulation 2019 which commenced on 23 March 2020

Tenants are responsible for any damage they cause to the property.

At the end of the tenancy, a tenant is responsible for leaving the property in the same condition as at the start of the tenancy, except fair, wear and tear. This includes making sure any alterations, additions or renovations are removed and also fixing any damage caused to the property. A tenant can choose whether to remove any ‘fixtures’ they have installed, provided they repair or compensate the landlord for any damage caused by removing the fixture. A tenant cannot remove any fixtures if the landlord paid for them.

If tenants do not remove the alterations, additions or renovations to a satisfactory standard, or the work is likely to adversely affect the landlord’s ability to let the premises to other tenants, the landlord may apply to the NSW Civil and Administrative Tribunal to seek compensation from the tenant for the costs involved.

If you need assistance with any property or land matters contact Everingham Solomons because Helping You is Our Business.

Click here for more information on Suzanne Hindmarsh.

Residential Tenancies Act – Can a tenant alter the premises? (Part 4)

There have been amendments as to what constitutes alterations of a ‘minor nature’ under Residential Tenancies Act 2010 and new Residential Tenancies Regulation 2019 which commenced on 23 March 2020.

The new Regulation lists the kind of fixtures, alterations, additions or renovations that are ‘minor’. Some examples are:

• securing furniture to a non-tiled wall for safety reasons
• fitting a childproof latch to an outdoor gate of a single dwelling, installing child safety gates inside the property or window safety devices
• installing/replacing an internal window covering e.g. curtains, removable blinds, installing cleats/cord guides to secure blind/curtain cords
• installing a wireless removable outdoor security camera
• applying shatter-resistant film to window/glass doors
• planting vegetables, flowers, herbs or shrubs (shrubs that don’t grow more than 2 metres) in the garden if existing vegetation/plants do not need to be removed
• installing hand-held shower heads/lever-style taps to assist elderly or disabled occupants. A landlord will require a qualified person to carry out this installation.
• installing a phone line/internet connection. A landlord may require a qualified person to carry out this installation.

Tenants need the landlord’s written consent to install fixtures, make alterations, additions or renovations. The tenant must pay for the fixture they install or for any alteration, renovation or addition to the property they make, unless the landlord agrees otherwise. If the tenant’s request for a fixture, alteration, addition or renovation is of a ‘minor nature’ then the landlord must not unreasonably withhold consent or to place conditions on the consent.

The above changes do not apply if a property is listed on the loose-fill asbestos insulation register, or is a heritage item. Some restrictions and exclusions also apply to property in a strata scheme, residential land lease community, or to social housing properties.

If you need assistance with any property or land matters contact Everingham Solomons because Helping You is Our Business.

Click here for more information on Suzanne Hindmarsh.