Under an Option Deed and a Lease Agreement, the most common payments are the option fee and the rent. There are other types of payments such as reimbursement of legal costs and fees for grant of easements, but this article will only focus on the option fee and the rent.
Option Fee
In consideration of the landowner’s grant of an option to lease/purchase the land, the developer will pay an option fee to the landowner annually during the option period (e.g. 4 years). Typically, for the purpose of conducting investigations on the land, it is quite common that during the option period contractors for the developer will access the land with equipment to conduct different types of tests. Accordingly, when negotiating the amount of the option fee, the landowner needs to consider the potential impact on the landowner’s farming activities as well as the area of the option land.
Rent
Under the Lease Agreement, landowners for solar farms are typically paid an annual fixed amount per hectare leased. In contrast, landowners for wind farms are typically paid an annual fixed amount per turbine.
In a wind farm project, there are two common methods for calculating the rent:
1. a flat annual fee per turbine, regardless of size or capacity;
2. an annual fee based on the generating capacity of the turbine.
The second method is recommended because modern-day turbines have much greater capacity compared with turbines available previously and, therefore, can result in less turbines being hosted by the landowners.
Rent actually received may be less than you originally expected
At the initial stage of the development process, it is not uncommon for a developer to propose more turbines or solar arrays than will be finally approved or installed, which can result in landowners hosting less facilities, potentially earning less than original expectations. Accordingly, landowners need to ensure that necessary clauses are included in the Lease Agreement to protect their interests in relation to the rent (e.g. minimum amount of rent payable).
Everingham Solomons have experienced Solicitors who have represented landowners in wind/solar farm projects. Please do not hesitate to contact us for any legal advice you may need in relation to a renewable energy project, because Helping You is Our Business.
In continuing support of a great cause, from 22 to 26 March 2021, Everingham Solomons Solicitors are preparing professionally drafted Will packages* at the heavily discounted rate of $125 per person (or $225 per couple), with 100% of the proceeds being donated to the Westpac Rescue Helicopter Service.
Part of the government’s response to the economic downturn caused by Covid-19 has been to encourage spending in certain sectors. The building industry have been given a lifeline via the Homebuilder scheme, which encourages eligible home owners to renovate their existing home, buy a new home off the plan or build a new home.
The scheme was to finish at the end of 2020, but has now been extended to 31 March 2021 with an amended grant amount and conditions.
The grant you will receive depends on when you entered into your building Contract and applications must be submitted by 14 April 2021. First Home Buyers are also eligible for this grant. Construction must begin within 6 months from the date of the building Contract and you will need to live in the property for at least 6 months after completion.
$25,000 Grant – For building contracts entered into between 04/06/20 and 31/12/20. The value of the house and land must be under $750,000 if you are building. For renovations your contract must be between $150,000 and $750,000 and the value of the existing house and land must be under $1.5 million.
$15,000 Grant – For building contracts entered into between 01/01/21 and 31/03/21. The value of the house and land must be under $950,000 if you are building. For renovations your building contract needs to be between $150,000 and $750,000 and the value of the existing house and land must be under $1.5 million.
To get the grant you must be an Australian citizen, over 18 and earn less than $125,000 p/a as an individual and $200,000 p/a as a couple. Permanent residents and visa holders are not eligible.
For new builds, the Grant will be paid once the foundations are laid and the first progress payment has been made. For renovations, it will be paid once payments over $150,000 have been made to the builder.
Still confused about whether you are eligible for these grants? Contact the Property Law Team at Everingham Solomons because Helping You is Our Business.
If you have bought or sold a property in the last few years, then you may have had a conversation with your Solicitor about postponed rates. If not, you probably haven’t heard of them.
The truth is postponed rates are not generally well understood, but there are consequences if they are not dealt with appropriately during a sale or purchase of property.
So what are postponed rates?
Postponed rates are a charge that Councils can levy over property.
Where you have land that is zoned commercial, industrial, residential flat building or it is permitted under a plan to be further subdivided, this land attracts higher Council rates. If you use the land for residential purposes only, you may apply to have part of these rates postponed, and essentially pay the residential rate for the land. The part you can apply to be postponed, is the difference between the residential rate and the higher commercial/ industrial/ other rate.
If the postponement is granted, Council will defer payment of the difference between the two rates for each year plus interest, and will continue to defer the difference every subsequent year for a period of five (5) years. This amount is what is known as postponed rates.
These rates are on a 5 year cycle, so that when Council levies the new year’s rates and interest, the previous 5th years postponed rates drops off. This means that there is a maximum of five (5) years’ worth of postponed rates which are levied against the property.
For example, Jo owns a block of commercially zoned land. Jo advises Council that the land will only be used for residential purposes and applies to Council to have the difference between the commercial rates and the residential amount postponed. If approved, Council will postpone part of that years rates and will continue to do so for five (5) years, so essentially Jo will pay only the residential amount of rates instead of the commercial amount as the balance has been postponed. Jo will have to pay the deferred rates when he no longer solely uses the property for residential reasons.
Postponed rates are not generally due and payable, unless the land use changes back to commercial, industrial etc.
When a property is sold with postponed rates levied against it, this becomes a bit of an issue. Is the Vendor liable to pay these rates that aren’t due? Should the purchaser have to take on the potential liability for them?
Legislation determines that postponed rates are a charge against the land, much like a mortgage and must be discharged (by making payment to Council). Alternatively, case law suggests that an alternative to payment to Council is that an amount equal to the postponed rates is retained in a Trust account for the benefit of the Purchaser for a period of 5 years. If Council deems that the rates are due and payable in this 5 year period, then the money held in trust is used to make payment to Council. If the postponed rates are not levied in the 5 year period, then the money is returned to the Vendor. Alternatively there may be options to create a special condition in the contract which outlines what is required in the event of postponed rates applying to a property.
It is important that you receive the right advice and address the issue of postponed rates upfront as the consequences could be costly.
At Everingham Solomons we have an Accredited Property Law specialist on hand to deal with complex property matters because Helping You is Our Business.
Before you sue someone, it is critical to consider whether you will actually be able to get them to pay you money or give you property if you win your court case. If you don’t, you could be in the unfortunate position of having won your case but not being able to enjoy the spoils of your victory.
Generally, after winning a court case the court will make orders requiring the losing party to pay the winning party a sum of money or give them certain property. However, there is nothing to guarantee that the losing party will actually obey the court’s orders immediately. Similarly, they may not have money or property to be able to satisfy the court’s orders – as they say, you can’t draw blood from a stone.
However, if a person refuses to pay you under a court order, there are a range of measures available to you that can be used to force someone to obey the court’s orders. Broadly, these measures are referred to as “enforcement actions”.
The most commonly used enforcement actions are:
1. Garnishee orders: This forces third parties to pay you, instead of the losing party, money that would ordinarily be paid to the losing party, such as their wages or salary.
2. Writs of execution: These allow the Sheriff of the Court to seize and sell property belonging to the losing party.
3. Bankruptcy proceedings: This causes the liquidation of most of the assets of the losing party. You (and other people owed money by the losing party) will then seek to be paid out of the liquidated assets of the losing party.
A judgment can be enforced for up to 12 years after it is made. If the losing party can’t perform the court’s orders immediately, you should closely monitor their financial situation so that enforcement proceedings can be swiftly commenced when they are in a financial position to satisfy the court’s orders.
At Everingham Solomons, we have a range of solicitors with expertise in litigation and enforcement proceedings. This allows us to give you realistic and practical advice about the best way to maximise your claim against another party because Helping You is Our Business.
Click here for more information on David Southwood.
If a person makes a promise (“the promisor”) to another that s/he will obtain an interest in the promisor’s land and in reliance upon that promise, the other person then acts to his/her detriment, the law will intervene to prevent the promisor from going back on his/her word when it would be unconscionable for the promisor to do so. A recent NSW Supreme Court case has considered this legal principle known as proprietary estoppel where disgruntled neighbours sued the estate of his deceased neighbour after it was discovered that she reneged on her promise to leave them certain land by her Will.
David and his partner were neighbours of the deceased describing their property, No 70, at the time they purchased it as “the worst house in the best street”. The deceased was the owner of two adjoining properties (No 66 and No 68). The deceased resided in an upstairs unit at No 68 which had views of Sydney Harbour.
After David and his partner moved into No 70 in 2001, the deceased voiced her concerns about their plans to develop their property. It was contended that the deceased promised to leave them her houses (No 66 and No 68) in return for them looking after her for the rest of her life and agreeing not to undertake their desired building works to the extent that such works would impede her Harbour views.
David and his partner performed their side of the agreement but when the deceased died in 2015, she did not leave her properties to them in her Will as she had promised. David and his partner sued the executor of the deceased’s estate seeking to enforce their rights by estoppel against her estate.
The court found David and his partner did provide services to the deceased and altered their lifestyle to accommodate the deceased’s needs, and provided companionship and support as the deceased aged over a number of years in reliance upon her promise to them. “Estoppel by encouragement vindicates a plaintiff’s expectations when a defendant seeks unconscionably to resile from an expectation that he or she has created”. The court determined that detrimental reliance “sufficient to render it unconscionable for the deceased to resile from the testamentary promises has been established” and the elements of proprietary estoppel were made out. The court ordered the executor of the deceased’s estate to transfer the 2 properties to David and his partner.
A promise made by one person to another may be enforceable against the promisor particularly where significant steps have been undertaken in reliance upon the promise and you should seek professional legal advice. At Everingham Solomons we have the expertise and experience to advise you on your legal rights because Helping You is Our Business.
Click here for more information on Lesley McDonnell
Under Workers Compensation Legislation, if a worker is assessed at 31% Whole Person Impairment or greater they are considered a “worker with highest needs”. This classification provides them with an entitlement to receive weekly payments at the Pre Injury Average Weekly Earnings rate, in addition to any potential income they may be earning from employment, provided they still have some level of incapacity. Therefore a worker considered in this class, can potentially be receiving significantly more money per week post injury than what they were earning prior to the injury.
However, the question has been raised by the recent case of Meat Carter Pty Ltd v Melides [2020] NSWCA 307, when does the highest rate of weekly payments start.
In this case the worker was first injured on 14 August 2014. However he wasn’t determined to be a “worker with highest needs” until 9 June 2017, following a Medical Assessment Certificate that assessed him at 60% Whole Person Impairment. The worker was then paid at the special Section 38A rate from 9 June 2017 onwards. He made a claim to the insurer, from the date of injury of 14 August 2014 up to 8 June 2017, a period of just less than 3 years, seeking for the special Section 38A rate to be paid.
The matter went on appeal to the New South Wales Court of Appeal but it was held the worker had not satisfied the definition of “worker with highest needs” until 9 June 2017, and therefore weekly payments were only payable from that date onwards and not from the date of injury.
If you have a workers compensation claim and have any questions in relation to what you are entitled to please contact Everingham Solomons because, Helping You is Our Business.
Click here for more information on Libby Campbell.
I have recently joined Everingham Solomons where I work in the litigation and business law team.
I moved to Tamworth in 2019 to join my wife who works at a local secondary school. I have felt warmly welcomed by the local community and I am thoroughly enjoying the lifestyle offered in Tamworth.
Prior to moving to here, I worked in Sydney at one of Australia’s largest commercial law firms where I focused on commercial litigation and business transactions. This included resolving contractual disputes, engaging with regulatory bodies, and preparing contracts/other business documents. I also spent one year working at a youth legal centre where I practised in criminal law. I believe this broad experience has prepared me to meet the diverse legal needs of the local community.
I completed my law degree at the University of New South Wales. Prior to that, I completed a Bachelor of Arts at the University of Sydney where I studied history and government.
In my spare time I like to stay active by walking my dog, playing team sports, cycling and losing golf balls.
I pursued a career in law because I enjoy helping people and advocating for their interests. For me, a good lawyer is someone who listens, understands their client’s objectives and turns that into practical outcomes. I look forward to doing this for the local community as part of the Everingham Solomons team, where Helping You is Our Business.
Click here for more information on David Southwood.
The State Revenue Legislation Further Amendment Act of 2020 has received Royal Assent.
In short, the Act indicates that any discretionary trust or family trust or testamentary trust that owns or will purchase residential property, may be subject to surcharge land tax and surcharge stamp duty.
This means that if a discretionary/family/testamentary trust is purchasing residential property, it will be charged an additional 8% of the market value of a property by way of surcharge stamp duty.
In addition, surcharge land tax over and above the standard rate, is increased by 2% on the unimproved value of the land.
Land tax is particularly nasty as it is levied each year on the 31 December.
Further there is no threshold amount when a trust is involved and land tax is payable on the entire unimproved value of the land annually.
If you have a discretionary/family/testamentary trust, it is more than likely you will receive a letter from Revenue New South Wales indicating that a trustee of a discretionary trust/family trust is deemed to be a foreign person and potentially subject to such additional surcharge taxes.
There is, however, a way to avoid the surcharge.
This involves reviewing the terms of the Trust Deed and if appropriate, amending the trust deed (provided it has an amendment power) to exclude current and future foreign person beneficiaries and ensuring that such amendments to the trust deed are irrevocable.
If you wish to take advantage of that opportunity however, you must make the amendment prior to the 31 December 2020.
If you do not make that change to your trust deed, your trust will not be able to avoid the surcharge duties and taxes.
Revenue New South Wales are regularly requesting copies of trust deeds to check whether those amendments have been made.
If you have a discretionary/family/testamentary trust and own or intend to own residential property, you need to get urgent legal advice.
At Everingham Solomons we have the expertise to assist you because Helping You is Our Business.
The Holliday season is something a lot of us look forward to for the whole year as it brings with it some much awaited time off from work.
It also brings with it a number of Public Holidays, and who doesn’t love a public holiday!
So what Public holidays do we have to look forward to over the holiday season?
In NSW Christmas day, 25 December 2020 and Boxing Day are recognised as Public Holidays.
As Boxing Day falls on a Saturday this year, there is an additional Public holiday on 28 December 2020. Bonus!
New Year’s Day is also a public holiday falling on Friday 1 January 2020.
So let’s talk about what happens when a Public holiday falls on a day you would usually be required to work.
If you a full time or part time employee, then your employer is required to pay you your base rate for the day. So if you would usually work five (5) hours on a Tuesday and a public holiday falls on a Tuesday, then you are entitled to get paid for five (5) hours. If your usual hours do not fall on a day that is public holiday, then you are not entitled to be paid.
If your employer requires you to work on a Public holiday or you agree to do so, then you are entitled to take the hours you worked off on another day in substitution for the Public Holiday. Depending on your award, enterprise agreement or other registered agreement, you may be entitled to a higher rate of pay for hours worked on a Public Holiday.
What about the casual employees out there?
There is no obligation for casual employees to work on public holidays. However if you do, then you are usually well compensated. Depending on your industry, public holiday rates can be up to triple your ordinary rate of pay. The rate for public holiday pay is entirely dependent on what award, enterprise agreement or other registered agreement that your employment falls under.
The Staff and Directors at Everingham Solomons wish you all a Wonderful Holiday Period and a Happy New Year and note we will be back in the office on 4 January 2021 because Helping You is Our Business.
Under an Option Deed and a Lease Agreement, the most common payments are the option fee and the rent. There are other types of payments such as reimbursement of legal costs and fees for grant of easements, but this article will only focus on the option fee and the rent.
Part of the government’s response to the economic downturn caused by Covid-19 has been to encourage spending in certain sectors. The building industry have been given a lifeline via the Homebuilder scheme, which encourages eligible home owners to renovate their existing home, buy a new home off the plan or build a new home.
If you have bought or sold a property in the last few years, then you may have had a conversation with your Solicitor about postponed rates. If not, you probably haven’t heard of them.
Before you sue someone, it is critical to consider whether you will actually be able to get them to pay you money or give you property if you win your court case. If you don’t, you could be in the unfortunate position of having won your case but not being able to enjoy the spoils of your victory.
If a person makes a promise (“the promisor”) to another that s/he will obtain an interest in the promisor’s land and in reliance upon that promise, the other person then acts to his/her detriment, the law will intervene to prevent the promisor from going back on his/her word when it would be unconscionable for the promisor to do so. A recent NSW Supreme Court case has considered this legal principle known as proprietary estoppel where disgruntled neighbours sued the estate of his deceased neighbour after it was discovered that she reneged on her promise to leave them certain land by her Will.
Under Workers Compensation Legislation, if a worker is assessed at 31% Whole Person Impairment or greater they are considered a “worker with highest needs”. This classification provides them with an entitlement to receive weekly payments at the Pre Injury Average Weekly Earnings rate, in addition to any potential income they may be earning from employment, provided they still have some level of incapacity. Therefore a worker considered in this class, can potentially be receiving significantly more money per week post injury than what they were earning prior to the injury.
The State Revenue Legislation Further Amendment Act of 2020 has received Royal Assent.