What if I accept less than 10% deposit when selling my property?

When selling a property, usually a sum of 10% of the purchase price is paid as a deposit by the Purchaser. Recently, however, the acceptance of 5% deposits are becoming more acceptable, especially as property prices have increased.

Is there a risk to you as a Vendor if a 5% deposit is excepted?

The main risk associated with accepting a deposit of less than 10% is that if the purchaser defaults, you may not be able to claim the full 10% deposit as compensation.

Often, as a common practice, a Special Condition can be included in a Contract for Sale which states that if the deposit is less than 10% and if the purchaser, by its default, fails to complete the purchase, the deposit is forfeited to the Vendor and the purchaser must also pay to the Vendor the balance of the agreed 10% deposit. Unfortunately there is much uncertainty from the Courts as to whether such a clause is enforceable. Fortunately, default by a Purchaser is a rarity in a property transaction.

But is there a benefit to the Vendor if a 5% deposit is excepted?

Yes! You may have a purchaser that has offered you the price you are looking for however, does not have the cash available for the full 10% deposit. In doing this you are removing the risk of not selling the property or receiving the asking price for the property.

If it is known that you may accept a deposit of less than 10%, this increases the number of potential purchasers that may make offers on your property. In turn, this can result in achieving a higher purchase price, particularly at auctions. The more people making offers or bidding at auction for your property, the greater chance of securing a great sale price.

If you need legal assistance, contact Everingham Solomon’s team of experienced Solicitors because Helping You is Our Business.

Click here for more information on Lisa Biddle.

Should you allow a purchaser early possession of your property?

Early possession in the sale of a property occurs when a vendor, being the owner of the property, allows a purchaser access to the property prior to settlement.  There can be various reasons why a purchaser may request early possession.  The purchaser may have sold their property, or they may need to vacate their residence earlier than expected.  The purchaser may also wish to gain a head start on moving by storing items in the property if the whole or a portion of the property is vacant.

In terms of the advantages of early possession, it is the purchaser who primarily benefits as early possession provides relief for housing or storage issues the purchaser may be experiencing.  There may be some advantages for the vendor.  Such as, if the property is vacant it may be beneficial to have someone residing in the property to reduce the risk of a break-in and vandalism.  Early possession can also create additional income through an early possession fee.  Whilst there are some benefits for vendors, allowing early possession comes with risks.

If the vendor grants the purchaser access to the property prior to settlement, the purchaser is obtaining the benefit of the property whilst the vendor must wait until settlement to receive the settlement monies.  This is because, at settlement the title to the property passes from the vendor to the purchaser when the purchaser pays the settlement monies to the vendor.  The risk is, if settlement does not go as planned, the vendor may experience the added stress, delay and cost of taking action to have the purchaser and their belongings removed from the property.  The vendor may also need to deal with repairing damage caused by the purchaser.

Every sale is unique and involves vendors and purchasers who have different needs and goals.  Early possession is just another consideration to the transaction.  Before you agree to granting a purchaser early possession of your property, it is strongly recommended you seek legal advice.  This is to ensure you fully understand the risks but also to ensure the terms of early possession are clearly outlined and agreed to by all parties.

For efficient and expert advice, contact Everingham Solomons where Helping You Is Our Business.

Click here for more information on Jessica Wadwell

Frustrating Contracts

Yes, entering into a Contract can be frustrating but did you know there is a legal doctrine known as “frustration”. This is where a Contract is brought to an end because of a supervening event that is beyond the control of the parties.

For example a Contract between A and B, where B agrees to hire a local hall on a particular night may be frustrated as a result of a wind storm that removed the roof from the hall. Hence despite the best efforts of A and B, the Contract cannot be performed and is deemed to be “frustrated”.

The doctrine of frustration only applies in a limited range of circumstances where the event renders performance of the Contract something fundamentally different from that anticipated by the parties. The Courts are unlikely to be sympathetic if the event could have been anticipated and therefore provided for by the parties in the terms of their Contract.

If a Contract is found to be frustrated, it is automatically terminated and all future obligations of the parties to the Contract are discharged.

Examples of where frustration is likely to bring a Contract to and end are where:

  • The subject matter of a contract is destroyed
  • There is an excessive delay in performance due to unforeseen circumstances
  • A party to the Contract dies or is incapacitated
  • The expected method of performance becomes impossible due to unforeseen circumstances
  • There is a natural disaster or terrorist attack.

There is no legislative test to determine whether a Contract has been frustrated, however a Court will consider factors such as whether the event in question was foreseeable and whether obligations under the contract have become impossible to perform.

Some Contracts do contain terms to deal with a frustrating event.

A Contract will not be found to be frustrated and at an end where a party simply faces loss or inconvenience or the event in question could have been reasonably foreseen.

If you have questions or requirements regarding Contract Law, we can at Everingham Solomons assist you, because Helping You is Our Business.

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Going… Going… Gone are the days of rental bidding

With rental properties becoming more and more difficult to obtain, there has been a trend of Real Estate Agents engaging in a process referred to as rental bidding between prospective tenants.

Rental bidding is a practice in which Agents encourage a prospective tenant to increase their rental offer on a property because it may increase their prospects of securing the property. Essentially an auction is conducted between the prospective tenants to decide what rent will be paid, playing each offer against the other, which results in a higher rent being required.

A recent change to the Property and Stock Agents Regulations now prohibits Licensed Real Estate Agents from engaging in this practice.

From 17 December 2022, Agents can no longer invite offers of rent that is higher than the advertised price for a residential property.

These changes also effect the ways in which a residential property can be marketed for rent. A price range or a “starting price” can no longer be utilised by licensed agents. There must be a fixed rent amount listed on the advertisement.

This does not mean however that a higher offer cannot be accepted, however agents are prohibited from disclosing if higher offers have been made and they certainly cannot suggest you offer an amount over and above the rent noted in the advertisement.

There is, however, a bit of a catch. This change only applies to residential properties which are being managed by a licensed real estate.  These changes do not apply to anyone who is privately advertising a residential property for lease.

Real estate agents can individually face fines of $550.00 and businesses of up to $1,100.00 for breaching these regulations. General or ongoing non-compliance can see businesses faced with Court imposed fines of up to $11,000.00.

If you need legal assistance, contact Everingham Solomon’s team of experienced Solicitors because Helping You is Our Business.

Click here for more information on Sarah Rayner.

Premium Stamp Duty – What is it and when is it payable??

Stamp duty (now called transfer duty in NSW) is a tax imposed by the NSW Government upon the transfer of the title to a property from a Vendor to a Purchaser. Transfer duty must be paid when you buy any property in NSW whether it be your home, holiday home, investment, vacant land, or faming properties.

Generally, stamp duty must be paid on the earlier of the following:

  1. Completion of the Contract (also called settlement); or
  2. Three (3) months from the date of exchange of Contract

In New South Wales, “premium stamp duty” may be payable, in addition to transfer duty, on properties that attract a higher value. The purpose of premium stamp duty is to raise additional revenue from high-value properties.

Premium duty is calculated as a percentage of the value of the property above a specified threshold. Each year the threshold for premium duty is adjusted in accordance with CPI. The rate of premium stamp duty varies based on the value of the property and is applied for residential properties worth more than $3,268,000.00. Premium Duty does not apply on properties that are rural.

The same timeframes for payment of premium duty are applicable in terms of when stamp duty is payable. Revenue NSW provides a number of online calculators so you can determine stamp duty payable on your property transaction.

If you need legal assistance, contact Everingham Solomon’s team of experienced Solicitors because Helping You is Our Business.

Click here for more information on Lisa Biddle.


What is involved when a person dies owning land?

Land in NSW can be held 3 ways by a person. Firstly, as an individual, secondly, jointly with another person, and thirdly, as tenants in common with one or more persons.  All these holdings are dealt with separately on death.  In this article, I will only deal with holding the land individually.

The first step is to ascertain if the deceased left a Will. If the deceased left a Will, the executor needs to apply for a Grant of Probate (“Probate”) from Supreme Court of NSW (“Court”). Probate is issued by the Court acknowledging the validity of the deceased’s Will and authorizing the executor to administer the Estate.  If there is no Will, the next of kin of the deceased needs to apply for Letters of Administration.  This is issued by the Supreme Court of NSW authorizing the next of kin (known as the “Administrator”) to administer the Estate according to intestacy rules.  Once Probate or Letters of Administration has been obtained, the land is able to be dealt with.

If the land has not been left to a beneficiary in the Will, the land will be sold and sale proceeds will be distributed to the beneficiaries in the Estate.

In order for the property to be sold, a Contract for Sale of Land (“Contract”) needs to be prepared by your solicitor/conveyancer.  This can be prepared prior to receiving a Probate/Letters of Administration.  In the special conditions of the Contract, your solicitor will have a clause making completion of the contract subject to Probate being obtained. The time period is usually 3 months to allow sufficient time for the Probate to be obtained and registration of the Transmission Application to executor to enable the executor to sell the land.

Currently, the time frame for the Court to process Probate is approximately ten weeks from the time your solicitor has lodged the probate application with the Court.  If a requisition is received from the Court, this will take a further period of a few weeks in order to comply with the requisition and that means a further delay in obtaining Probate.

In all likelihood, your solicitor will be extending the period of the special condition regarding Probate to be obtained to 4 or 5 months to ensure sufficient time is allowed to obtain Probate so the executor will not be in default of the Contract.

Settlement of a matter cannot take place until the Probate is obtained as this is the document required to enable the Transmission to the Executor to be lodged with the Land Registry Services.

At Everingham Solomons, we have the expertise to assist you in Estate and conveyancing matters because, Helping You is Our Business.

Click here for more information on Suzanne Hindmarsh.

Head-to-Head: Solicitors v Conveyancers

Headshot of Terry Robinson - Accredited Specialist and General Counsel at Everingham Solomons TamworthIt’s the age-old question, who do you get to act for you in a property transaction?

Can you use a Conveyancer or do you need a Solicitor?

If you are dealing with a simple transaction, then the short answer is you can use either.

Licensed Conveyancers are professionals who are registered with NSW Fair Trading and have a formal qualification relevant to this area of practice.
Solicitors are professionals who must have formal qualifications (minimum of a Law Degree and Graduate Diploma) and hold a current practicing certificate with the NSW Law Society. They must also hold significant professional indemnity insurance.

Can they both do the job for you? Absolutely.

However, there are many benefits of engaging a firm to act for you who has access to both Conveyancers and Solicitors.

Simply put, if you retain a legal firm, you will get an all-in-one service. If the matter goes wrong or you need to take legal action, you won’t have to take your matter to a legal firm. This will save you from having to go through the additional cost and process of instructing another person, this time a Solicitor, and providing all of the details of your case.

Solicitors will know your legal rights as well as the Court process, have the skills to negotiate (with a view to settling a dispute) and they can represent you if the matter proceeds to Court.

Solicitors will also be able to assist with many other things that usually go hand in hand with property transactions like providing advice on the purchasing entity. Should I use a company or trust? Is the transaction subject to GST or is there an exemption? Is capital gains tax payable and are there any concessions? They can also provide advice on loan and mortgage documents, tax implications, leasing issues and estate planning. Do you need to change your Will and/or power of attorney in light of your property transaction? Unfortunately, Conveyancers are very limited in what advice and services that they can give to you.

Everingham Solomons has both Licensed Conveyancers and Solicitors on our team, so you get the best of best worlds, because Helping You is Our Business.

Click here for more information on Terry Robinson

Hot Property: Know your cooling off rights

Headshot of Jessica Wadwell - Conveyancer at Everingham Solomons TamworthIf you have sold or purchased property before, you may be familiar with what is known as the “cooling off period”. The cooling off period is five business days following exchange of Contracts whereby a purchaser is permitted to withdraw from the Contract for any reason and rather than forfeiting 10% of the purchase price, the purchaser only forfeits 0.25% of the purchase price. For off the plan Contracts, the cooling off period is ten business days following exchange of Contracts.

The cooling off period only applies to Contracts for the sale of residential property. For the purposes of the cooling off period, residential property is defined as land with no more than two places of residence or vacant land which allows for the construction of a single residential premises. The area of the land must be no more than 2.5 hectares.

Despite a property being residential property, there are certain cases when there is no cooling off period. For instance, if the cooling off period is waived, if the property is sold by public auction or the Contract is exchanged on the same day as the public auction but passed in, or if the Contract is exchanged in consequence of the exercise of an option.

The cooling off period can be extended by a provision in the Contract or by the vendor in writing prior to the expiration of the period. The period may also be shortened by written or oral agreement by the parties, or it may be waived by the purchaser. For the purchaser to waive the cooling off period, the purchaser’s solicitor or conveyancer must provide what is known as a Section 66W Certificate.

In country areas such as Tamworth, it is normal for the vendor to request the cooling off period be waived as Contracts are rarely exchanged by the real estate agent. If you are purchasing in an area of high demand, you may need to exchange with the cooling off period to prevent the loss of the property to another purchaser whilst still allowing yourself the opportunity to consider the purchase further.

You should always seek legal advice before signing or entering into a Contract. For efficient and expert advice, contact Everingham Solomons where Helping You Is Our Business.

Click here for more information on Jessica Wadwell

The implications of incorrectly spelling your name

Headshot of Suzanne Hindmarsh - Conveyancer at Everingham Solomons Tamworth

Quite often I come across sellers, testators, shareholders, lessors/lessees and mortgagors/mortgagees wherein their names are incomplete or otherwise different from their identification documents (ID) i.e. birth certificate, driver’s licence, passport and marriage certificate (if applicable).

The spelling of your name is critical when preparing any legal documents for example your Will, Power of Attorney, Appointment of Enduring Guardian, sale and purchase of Land Contracts, Leases, Mortgages and transferring of Company Shares.

These discrepancies can result in delays finalising your property transaction, in some cases causing a breach of contract and can result in increased transaction costs, and frustration. It can also cause issues or delays with selling your shares if you want to hit the market at its peak.

There are many reasons for the inconsistencies, however the most common are:-

  1. Anglicised names (which buyers/sellers/shareholders may commonly go by in day to day life) are not always the same names as reflected on their legal ID documents
  2. Marriage (or breakdown of marriage) where the seller has changed their name since purchasing the property or shares
  3. Missing middle names, which buyer/seller/shareholder may not use all the time, accidently being omitted from the legal documents i.e. Contract for Sale or Purchase of Land/Share Transfer Forms/Will/Power of Attorney etc
  4. Testators/donors providing misspelt names of their executors, beneficiaries and attorneys.
  5. Old errors, perhaps from missing or incorrectly spelt names when a seller originally purchased the property/shares or data entry errors made by land/ share registry at the time
  6. Foreign names where there is unfamiliarity. In some cultures, the christian name is written last and the surname is written first for example, Liu Jianguo, in Chinese would be Mr. Jianguo Liu using the Western style.

As we are moving towards a more digital world, it is becoming more important for us to use our full legal name as set out in our identity documents, and we need to ensure our full legal name is used on all documentation in any legal process.

At Everingham Solomons, we have the expertise to assist you because, Helping You is Our Business.

Click here for more information on Suzanne Hindmarsh.

What is Vacant Possession?

Headshot of Suzanne Hindmarsh - Conveyancer at Everingham Solomons TamworthWhen buying a property you need to ascertain if the property is vacant possession or tenanted.  If you want to live in the property, you will require the contract to stipulate vacant possession.

What is vacant possession?

Vacant possession refers to the exclusive use of the property, free from any tenancy or any physical impediment preventing the purchaser from enjoyment of the property. This requires the property to be free of chattels such as furniture, any rubbish or personal items at the time of completion.

If at the initial inspection of the property there is significant rubbish on the property, we recommend a special condition be inserted in the contract before the parties sign the contract requiring the seller to remove any rubbish before settlement.

For a majority of contracts, the seller is obligated to provide vacant possession on completion. This requires the seller, on or before completion of the contract (settlement day), to remove any items not included in the sale of the property.  If items of furniture, rubbish or personal property not included in the contract remains on the property, vacant possession has not been provided.

A final inspection by the purchaser, in the presence of the real estate agent, prior to the completion is required to ensure no undesired items are left behind. This allows the seller another opportunity to remove these items prior to completion.  If these items are not removed, the purchaser’s options can include:-

  • Refusing to complete the contract
  • Negotiate to retain a percentage of the deposit to cover the cost of removal of unwanted items; or
  • Commence legal proceedings to recover damages

Remember, as a purchaser you do not want any surprises after completing the contract and paying the full purchase price.

At Everingham Solomons, we can provide you with advice to assist in the smooth running of your conveyancing transaction because Helping You is Our Business.

Click here for more information on Suzanne Hindmarsh.