Solicitors 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.
A recent matter in the District Court of NSW considered a claim of negligence brought against a Council.
The claimant was a high school student participating in a touch football competition on a sports field maintained and owned by the Council.
During the game, the claimant fell to the ground alleging her foot got stuck in a hole in the playing surface of the field causing her injury to her knee.
To succeed in her claim, the claimant needed to prove on a balance of probabilities, that there was a hole in the playing surface of the field that caused her to sustain her injury.
The claimant admitted that she did not see any hole in the ground and ultimately was unable to establish that she fell into one.
The Council was also able to show evidence that groups such as touch football associations were issued permits to allow them to play on sports fields on the condition that the sporting entity had to inspect the playing field and surrounding areas prior to play for hazards and defects (such as holes) and any identified risks needed to be fixed before play and reported to the Council.
There was no evidence presented of any reports or defects in the playing surfaces from the touch football association or other sporting bodies who had recently used the sporting field.
Further the sporting Association gave evidence that their usual practice was to inspect the playing fields for risks prior to play and this was supported by a completed checklist which did not identify the hole in the surface of the field.
Additionally, Council had a system of maintenance of the park where the fields were regular inspected by a number of workers and no reports had been lodged of any defects in the playing surface.
The case highlights the importance of bodies having the control or ownership of public areas, having risk management procedures integrated into the day-to-day operation and management of public places such as sports fields, parks etc, to enable the early reporting, identification and elimination of risks on public land.
It also highlights that a claimant should have sufficient evidence and documentation to prove negligence and to prove their case as otherwise it could be an expensive gamble.
At Everingham Solomons Solicitors, we have the legal expertise to advise you regarding all of your legal matters, because Helping You is Our Business.
Saving 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.
If you are a tenant, you need to understand how you can use the leased premises when entering into a commercial or retail lease. For example, you may intend to use the premises as a restaurant or as a bookstore in Tamworth. How you can use the lease premises is negotiated and agreed before you enter into the lease and is provided in the “permitted use” clause of the commercial or retail lease.
The permitted use clause should accurately describe how you intend to use the premises during the lease term, including what you will be doing on the premises now and in the future, and any products or services you will manufacture or sell on the premises. The permitted use clause, even just a few words, is an important commercial term in the lease.
First of all, the permitted use has an impact on the future of the tenant’s business. A broader description of the permitted use is preferred as it will allow a range of activities to be carried out. A narrow description may restrict the tenant’s ability to expand the business. Therefore, tenants need to consider if the permitted use is broad enough to adequately cover their core business and any ancillary activities.
Secondly, tenants should consider the ability to transfer the lease to a third party. A highly restrictive permitted use may affect the tenant’s ability to assign the lease if the landlord is not willing to consent to a change to the permitted use. This is particularly relevant if the tenant intends to sell the business. A broad description of permitted use in the lease would make it easier to find a purchaser of the business.
Lastly, permitted use is closely related to the development approval. Before entering into the lease, tenants should research and enquire about whether the premises are suitable for their intended use and ascertain whether their intended use is permitted on the premises. If the intended use of the premises has not been approved by the council, the tenant will need to lodge an application and obtain the development approval from the council.
If you have any inquiries in respect of your commercial or retail lease, please contact Everingham Solomons because Helping You is Our Business.
From 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.
Over the past few years, The NSW Property Law system has been progressively moving towards a system in which land dealings are being lodged electronically. The electronic system is known as eConveyancing.
Recently, the Office of the Register General has announced the date in which NSW will become a 100% electronic system.
This date is being referred to as the Cessation Date.
The Cessation date of 11 October 2021 brings with it a multitude of changes.
One of the bigger changes to the system is the abolition of the Certificate of Title (CT), or more commonly known as the title deed. The Real Property Amendment (Certificates of Title) Act 2021 now dictates that CTs will no longer be issued when completing a property transaction and further still all CTs in existence will be cancelled.
This will mean that a CT will no longer be a legal document.
However, current advice is that you shouldn’t immediately run to the shredder to destroy any CT you have lying around your house, but that you should retain these Certificates for at least six (6) months after the Cessation date.
The NSW Torrens Title Register will remain the sole way of proving Legal ownership of Property in NSW.
In place of a CT being issued, the NSW Land Registry Service will be issuing an Information Notice.
The Information Notice is said to contain details of the Land affected, the dealing registration number, the date of the dealing and other important information.
With these changes, you can expect that your legal representative will now be required to carry out exhaustive identification checks before they will be able to proceed with your transaction.
For all your property transactions contact Everingham Solomons because Helping You is Our Business.
You’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.
Most Australians will at some point in their lifetime sign a lease. Whether that be a residential lease for a property to live in, a retail space or for some other commercial endeavour.
Most Landlords will require you to put forth some kind of security deposit/bond in leasing matters.
But what are the requirements for you to do such a thing?
In short security for a Lease is not compulsory. In saying that however, most Landlords will require you to pay one. This gives them some security and goes some way to ensuring that they are not left out of pocket if you damage the property or fail to pay rent.
If you refuse to provide some kind of security, then it is likely that a Landlord simply will not lease the property to you and find a tenant that will.
So what happens to a Security deposit/ bond after you pay it to the Landlord?
Well that depends on what kind of Lease it is that you are signing, so let’s go through them.
If you are paying a cash security then Landlords are legally required to give you the option of lodging that security with the Rental Bond Board. The Rental Bond Board is a NSW Government run facility which is managed by Fair Trading. It allows both Tenants and Landlords to make a claim for the security in certain circumstances. It also protects the Tenants security by not allowing Landlord to make a claim for the security without cause.
If the Landlord is managing the property without an Agent, then they have ten (10) working days to lodge the security with the Rental Bond Board.
If the Landlord has engaged an Agent to manage the property then the Agent has ten (10) working days after the end of the month to lodge the security with the Rental Bond Board. We also note that a Landlord cannot require you to pay security of more than four (4) weeks rent.
A cash security paid with respect to a Retail lease must be lodged with the Retail Bond Board NSW, this is a NSW Government run facility very similar to the Rental Bond Board. The security must be lodged within 20 days from receipt of payment.
There is no requirement for a Landlord to lodge the security with a Government agency. Commercial leases usually have a provision that notes that the Security Deposit is to be held by the Landlord.
An alternative to paying a security deposit/bond is a bank guarantee. A bank guarantee is a promise given by a bank or lending facility to pay money to the Landlord if the Landlord makes a claim. They are issued for a certain amount and any claim cannot exceed that amount.
Leasing can be complex, overwhelming and is usually a big legal commitment so if you need assistance with a lease, contact us because Helping You is Our Business.
We are often asked whether a local council requires an easement for its water and sewer pipes to remain on a person’s private land and further whether council is entitled to enter upon the private land to carry out repairs and works on that infrastructure.
The Local Government Act provides the answer in respect of storm water works, sewer and water supply works.
Section 59A of the Local Government Act provides that Council is the owner of all works of water supply, sewerage and storm water drainage installed in or on land by the council, whether or not the land is owned by council.
This means that even where council’s infrastructure is located on private land, the works themselves, if installed by council, belong to council.
The works may be considered to have been installed by council even if a developer partly funded the installation and also applies to council infrastructure that was installed prior to Section 59A being legislated.
The Section of the Local Government Act, goes on to allow the council to operate, repair, replace, maintain, remove, extend, expand, connect, disconnect, improve or do any other thing to those works to ensure their efficient operation for the purpose for which they were installed.
This enables the council to both use the works for the purpose they were installed for example, to drain storm water, water supply and sewerage and also to maintain and extend or replace the works.
In effect the section means that council owns the infrastructure works despite the fact that there is no easement or other interest registered on the certificate of title of a private person’s land and allow the council to operate, repair, replace and maintain the works and no easement is required.
It is, however, normal for council with respect to new subdivisions to require easements to be registered on the title of land being created for essential services such as water, sewerage and storm water.
The result is that a landowner cannot require council to remove any such works or prevent council from exercising those powers.
If you have any property enquiries or need assistance in a property related transaction, contact us at Everingham Solomons, because Helping You is Our Business.
Where a farming enterprise has been carried on a rural property, for a minimum of 5 years and where the purchaser intends to carry on a farming operation, then generally the sale will be exempt from payment of GST.
A recent matter highlighted the importance of ensuring that each transaction is examined on its facts and generalisations such as the above rule, are not adopted on a wholesale basis.
The facts: The sellers had operated a farming enterprise (sheep) on their property for many years. They had agreed to sell 15 acres from their rural property to a Purchaser.
The purchaser indicated that he intended to run sheep on the property and has been advised that the GST farmland exemption will apply. That is, no GST is payable in addition to the purchase price.
At first glance this looks to be a reasonable proposition, as the seller has run a farming business for more than five years and the purchaser wishes to run sheep on the property.
The real issue to enable you to determine whether the GST exemption will apply to this sale, is whether the purchaser intends to carry on the business of primary production being the carrying on of a business of maintaining animals for the purpose of selling them for their bodily produce and natural increase.
The issue is whether the running a few sheep on a small block of land amounts to the purchaser “Carrying on a business”.
Factors which the Courts have indicated are relevant in indicating whether a primary production business is being carried on include:
a. Does the activity have a significant commercial purpose or character;
b. Does the taxpayer have more than just an intention to engage in business;
c. Is there repetition and regularity of the activity;
d. Whether the activity is similar to other businesses carried on in that line of business;
e. Is the activity planned, organised and carried on in a businesslike manner;
f. Is the activity directed at making a profit;
g. What is the size scale and permanency of the activity; and
h. Is the activity better described as a hobby, form of recreational or sporting activity?
In the above factual scenario, the running of a few sheep is unlikely to satisfy the commerciality test of “carrying on a business” and accordingly the sale would not be GST free for the sale of farm land.
At Everingham Solomons we have the expertise to advise you on all of your property needs because Helping You is Our Business.