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 If the agent uses the outdated marketing contract as the auction contract and proceeds to auction.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.


Tips for Purchasing a Property at Auction

Headshot of Nick Hawkins - Solicitor at Everingham Solomons TamworthPurchasing a property at auction has different challenges to buying through a negotiated sale. Many purchasers can find the experience daunting, especially if they are attending an auction for their first property purchase. These are some things you should know before attending any auction:

1. There is no cooling-off period if you buy a property at auction. This means that if you are the highest bidder at the auction you will then have to sign a contract for the purchase on the same day. This makes the purchase binding and you cannot pull out of the contract if you change your mind about buying the property.

2. It is important to speak with a banker or mortgage broker well before attending the auction to obtain preliminary finance approval and ensure you are able to borrow enough to complete the purchase. You will generally have a 6 week settlement period after the auction and you will then be required to complete the settlement and pay the balance of the purchase price. If you don’t begin to organise finance approval until after the auction it is unlikely that your loan will be approved in time and you risk being in default under the contract.

3. In addition to organising finance approval with a bank you need to have enough funds on the day of auction to pay the deposit. A deposit is usually 10% of the purchase price which you will be required to transfer to the real estate agent upon signing the contract immediately after the auction.

4. Before the auction you need to complete all of your own inspections and enquiries about the property so that you are satisfied that it is in an acceptable condition. If you wish to organised pest and building inspections, you should do this well before the auction date. If the pest and building reports reveal hidden damage or termite infestation you will not be able to get out of the contract after signing the contract at auction.

5. Importantly, you should request a copy of the contract as soon as possible from the real estate agent and ask your solicitor to review the contract before the auction. If you are successful at auction you will be bound by whatever conditions are in the contract so it is important to seek advice beforehand. Your solicitor will ensure the contract is fair and complete and will be able to negotiate conditions that you may require in the contract. They can also provide advice as to whether the property will actually be suitable for the purpose you intend to use if for, i.e. will you be able to build a pool in the back yard? Is the property able to be subdivided? What sort of businesses are permitted to be operated on the property?

If you need further advice in relation to any property transactions or you require a solicitor to review a contract before auction, contact a solicitor at Everingham Solomons because Helping You is Our Business.

Click here for more information on Nick Hawkins.

Development and the requirement for Council approval

Headshot of Jessica Wadwell - Conveyancer at Everingham Solomons TamworthDoes all development need Council approval? 

The type and size of the development will determine whether Council approval is required.  Generally, minor development such as small decks or garden sheds are identified as exempt development and can be undertaken without Council approval.  Development such as home additions will require Council approval.  Prior to undertaking any development, you should seek Council or legal advice specific to your development.

How do I obtain Council approval of an unapproved structure? 

The owner or an authorised third party can apply for a Building Information Certificate.  This certificate is issued by Council and is confirmation that Council will not issue an order, or take proceedings for an order or injunction, for the repair, demolition, alteration, addition or rebuilding of the building.  Applying for this certificate will require a survey report of the property and Council’s inspection of the structure.  If Council refuses to issue the certificate, Council must notify the applicant setting out the reasons for its decision and the work required to be undertaken to permit a certificate to issue.  Depending upon the type of work required, this may result in additional costs.  Once issued, the certificate is for a period of seven (7) years and covers such matters which exist at the time of issue of the certificate.

Selling a property with an unapproved structure?

Vendors should discuss any unapproved structures on their property with their solicitor.  This is due to the prescribed warranty under the Conveyancing (Sale of Land) Regulation 2017 that provides ‘the vendor warrants that, as at the date of the contract and except as disclosed in the contract … there is no matter in relation to any building or structure on the land … that would justify the making of any upgrading or demolition order’.  A breach of this warranty by the vendor may result in the purchaser being permitted to rescind the Contract.

Purchasing a property? 

Be alert to structures that require Council approval.  Initially, you or your solicitor should make enquiries of the vendor to obtain copies of the Council approvals held.  If the vendor does not hold approvals, Council records can be inspected with consent of the vendor.  These records may take time to obtain, so parties should be conscious of potential delays.

Important reminder!

If you are planning to undertake development upon your property, check whether Council approval is required.  If so, ensure all approvals are in place before works are commenced and the works are consistent with the development consent.  Don’t forget to schedule the appropriate inspections during construction to obtain that final approval known as an occupation certificate.

Feeling overwhelmed by the process of obtaining Council approval?  Contact the friendly and experienced team at Everingham Solomons, where Helping You is Our Business.

Click here for more information on Jessica Wadwell

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.

Can I buy land in my name or nominee?

Headshot of Terry Robinson - Accredited Specialist and General Counsel at Everingham Solomons TamworthThis is an often asked question by Purchasers and Real Estate Agents. Typically, someone will have bought a property at auction in their own name or for an off the plan development and then decide they want to buy the property in the name of their spouse or some other entity like their Superannuation Fund.

The decision to change names often happens after the purchaser has discussed the purchase with their accountant and/or solicitor and considered things like asset planning, funding and asset protection.

Most people seem to think they can simply change the “purchaser’s name” on the contract by inserting the words “or nominee” on the contract.

That process in most cases will not work and will result in you paying double Stamp Duty.

In New South Wales the name on the Contract needs to be the same name on the Transfer. On a $1 million purchase price the Stamp Duty payable is over $40,000.00.

If the purchaser on the Transfer document is different from the Contract, then the Transfer will be treated as a sub-sale, resulting in a second or additional Stamp Duty amount of over $40,000.00 being payable, (total of $80k plus).

There is a limited exemption set out in the Duties Act that allows the ultimate purchaser to be a different person from the purchaser in the Contract, so long as they are “related persons” as defined.

A related person includes a spouse, parent and child. It can also be a private company where the person is a director or majority shareholder of that company. It can also be a Trust where the natural person is a beneficiary of the Trust. There is a catch. For that section of the Duties Act to apply, the ultimate purchaser must have been in existence when the Contract was entered into. You cannot form the Company or Trust after the date of the first Contract.

If the “related person” exemption is not available, then your only real alternative is to persuade the seller to rescind the original Contract by agreement and enter into a new Contract.

There is no obligation on the seller to do this and if they do, undoubtedly you will end up paying the sellers legal costs of the rescission of the initial Contract and the preparation and exchange of the new Contract.

The best option is to seek appropriate advice as to the purchasing entity, prior to buying and entering into the Contract in the correct name from the beginning.

Our property team at Everingham Solomons can assist you with all your property related matters, because Helping You is Our Business.

The name’s Bond. Deposit Bond.

Headshot of Sarah Rayner - Solicitor at Everingham Solomons TamworthDeposit Bonds can be quite useful when buying Property. When you exchange on a Contract of Sale to Purchase property, you will usually be required to make payment of a Deposit, usually in cash, which is 10% of the purchase price.

There are circumstances where this can be tricky though. Maybe your assets are invested and you require some time to access them or perhaps your bank is issuing you a loan which will cover 100% of the purchase price, but your loan funds are not available until settlement.

So, what do you do in these situations? The Vendor will still require payment of the Deposit before you enter the Contract.

Usually, a convenient way to address this situation is to have a Deposit Bond issued. A Deposit Bond is essentially a guarantee from a provider that they will make payment of the Deposit, if a purchaser defaults on the Contract. It is a promise to pay.

Some of the perks of Deposit Bonds are that there are multiple providers of Deposit Bonds in NSW, and they usually can be obtained fairly quickly. But there is usually an upfront fee associated with the issuing of a Deposit Bond.

Each provider will have specific criteria you will have to meet to become eligible for a Deposit Bond, which usually will be that you have an asset base in which they can secure the Bond against.

However, you cannot simply assume that a Bond will be accepted by the Vendor in your transaction. You will need to ensure that the Contract of Sale allows you to make payment of the Deposit by way of Bond.

The other big consideration is that the Deposit that you paid by way of using a Deposit Bond isn’t really paid. It is a promise to pay made by the provider. The amount that you are securing with a Bond will become payable at settlement of your transaction. So, the Bond is really only a temporary placeholder for the Deposit. You will still need to have the full amount payable, in cash, available at settlement.

If a Purchaser defaults on the Contract of Sale in which a Bond has been used in lieu of a cash Deposit, and the Vendor becomes entitled to retain the Deposit, the Vendor can then “cash in” the Bond with the provider. The Purchaser will remain liable to the provider to reimburse the amount of money owed to them.

This generally means that while there are a few extra hoops for the Vendor to jump through to collect a forfeited deposit, from the Vendor’s perspective accepting a Deposit Bond instead of a cash Deposit when you are selling, is relatively low risk.

If you have questions about Deposit Bonds, or purchasing property in general, contact Everingham Solomons because Helping You is Our Business.

Click here for more information on Sarah Rayner.

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.

Click here for more information on Suzanne Hindmarsh.

Support for First Home Buyers

Headshot of Nick Hawkins - Solicitor at Everingham Solomons TamworthSaving money to buy property, or even pay a deposit, can be very difficult especially when buying property for the first time. Fortunately, the government is currently offering a number of grants and schemes that can make it a little easier.

First Home Buyer Assistance Scheme

The First Home Buyer Assistance Scheme provides an exemption for first home buyers from having to pay stamp duty on their purchase. The requirement to pay stamp duty is completely waived for first home buyers purchasing a new or existing home for $650,000 or less or buying vacant land for $350,000 or less. A first home buyer may still be eligible for a partial exemption it the value of the property exceeds these amounts.

To be eligible for the scheme you and your spouse must never have owned any interest is residential property in Australia and at least one of the first home buyers making the application must be an Australian citizen or permanent resident. There is also an additional requirement that you must live in the property for 6 months within the first 12 months of buying the property.

First Home Buyer Deposit Scheme

An additional expense for first home buyers is lenders mortgage insurance (LMI). LMI can cost thousands of dollars and is required to be paid by first home buyers that have less than a 20% deposit saved to purchase a property. Under the First Home Buyer Deposit Scheme, eligible people only need to have a 5% deposit saved and the government will guarantee the remaining 15%.

However, there are currently only 10,000 places available between 1 July 2021 and 30 June 2022 for first home buyers to qualify for this scheme. You must also be an Australian citizen and have a taxable income of less than $125,000 for an individual or $200,000 for couples to be eligible. This scheme is not available for individuals with permanent residency status in Australia.

First Home Super Saving Scheme

The First Home Super Saving Scheme allows first home buyers to release funds from their superannuation to buy property. The benefit of this scheme is that purchasers can draw from their superannuation to help fund their purchase or pay a deposit. It also makes it easier to save for a deposit as funds put straight into your superannuation are usually taxed at a lower rate than income tax.

Importantly, only voluntary contributions you have made to your super fund can be released under this scheme. Super contributions made by your employer cannot be released. You can also only release up to $15,000 of voluntary contributions you have made from any one financial year. The total amount of voluntary contributions that can be released is capped at $30,000.
If you need any assistance with purchasing your first property, or any other property transactions, please contact a solicitor or conveyancer at Everingham Solomons because Helping You is Our Business.

Click here for more information on Nick Hawkins.

Abolition of Certificates of Title for land in NSW

Headshot of Jessica Wadwell - Conveyancer at Everingham Solomons TamworthFrom 11 October 2021, all paper Certificates of Title for land in NSW will be cancelled and converted to electronic Certificates of Title.

What does this mean for me as a landowner?

1. If you hold a paper Certificate of Title, that paper title will be cancelled.
2. Those who pay off their mortgage will not receive a paper title.
3. A cash purchaser of land will not receive a paper title following settlement.
4. When a parcel of land is subdivided, consolidated or in any other way created, a paper title will not be issued for that new parcel of land.

Don’t panic! The cancellation of your paper Certificate of Title will not change the ownership of your land.

The Torrens Title Register is the primary register for land held in NSW. This register records land ownership and will continue to be the primary source recording a person’s interest or estate in land in NSW.

The purpose of the cancellation of paper Certificates of Title is in line with the Registrar General’s transition to 100% electronic Conveyancing.

Whilst most dealings with land registered on the Torrens Title Register must already be lodged electronically by a subscriber i.e. solicitor or conveyancer, once this transition is complete, all documents must be lodged electronically by a subscriber.

At Everingham Solomons, we strive to complete your conveyancing transaction efficiently, accurately and securely, because Helping You Is Our Business.