Where a person leases a house on a farm, it can sometimes be unclear whether they are a residential tenant or an agricultural tenant.
A residential tenant has rights and responsibilities under the Residential Tenancies Act 2010. This legislation governs the landlord’s requirements to provide a safe and secure residence, matters that are to be included in a lease, what constitutes a breach of the lease, and the tenant’s right to privacy.
An agricultural tenancy is governed by the Agricultural Tenancies Act 1990. This Act sets out the rights of tenants to receive compensation for improvements undertaken on the property, and the capacity of landlords to require maintenance of land and infrastructure. The Act also provides a framework for resolution of disputes.
The Agricultural Tenancies Act only applies to farms that are larger than 1 hectare.
Where the principal use of a property is for agricultural purposes (which includes grazing, cropping, poultry & pig farming, bee-keeping, dairying and viticulture), the tenancy will be deemed agricultural. Even if the tenant leases the farm as well as a house, the tenant will not have the protection of the Residential Tenancies Act.
This means that a tenant will need to be aware of their responsibilities under the Agricultural Tenancies Act to ensure that they do not carry out work that is not authorised – doing so could mean that the tenant is not entitled to be compensated and the landlord will be deemed to own any new infrastructure but will not have to pay the tenant for the materials or labour.
It is therefore important that the landlord and tenant agree on what is required of each party at the beginning of the tenancy, and that the agreement is formalised by entering into a lease. The lease should also include a condition report, so that there is a reference point for any matters that become contested in the future. Photographs are a good way to document the condition of houses, sheds and fencing as well as pasture & weeds.
Whether you are a landlord or tenant, if you are considering entering into an agricultural lease contact the experienced conveyancing team at Everingham Solomons where Helping You is Our Business.
Click here for more information on Rebecca Greenland.
History has shown that disputes often arise over fences that divide separately owned properties.
A fence can be an asset that you share with people that you don’t know, don’t want to know, or didn’t know would be so unreasonable.
In a rural setting the cost of repairing fences is often significant. The cost of not repairing fences can sometimes be even greater.
Who owns the fence, who wrecked it, who should fix it, to what standard and at what cost are all common dispute issues.
Thankfully, there is a piece of legislation which answers most of the above questions and provides a mechanism to resolve fencing disputes.
It is called the Dividing Fences Act and it applies to both rural and residential areas. It’s pretty straightforward to understand and easy to apply. However, most applications will require some time inside a court room and the production of evidence tailored to address specific issues raised by the act.
In some cases a dividing fence will simply be dilapidated by the rigors of time, weather and normal use. Sometimes however, it might be the case that one party in particular has caused all or most of the damage to the fence.
Under the act a party can request another person to pay an equal amount for the fence to be fixed, or any other amount which reflects the parties’ proportionate liability for the fence’s damage. The request must be set out in a particular manner and form.
If the requested party either does not respond to the request, or disputes some element of the request, an application can be made to the local court to have the dispute determined. The proceedings are usually fairly quick and fairly cheap.
If, at court, you are the successful party, you can apply to have your costs paid by the other party. However, you need to be careful when you commence the proceedings because if what you request is unreasonable or untenable and the court decides against you, you can be ordered to pay the other party’s costs.
If you, like many people, have a problem with a dividing fence, contact Everingham Solomons, because Helping You is Our Business.
Land Tax is a tax levied by the NSW Government on owners of land. Generally your home or “principal place of residence” is exempt from Land Tax.
Whilst “principal place of residence” appears to be a fairly straightforward concept, arguments often arise in relation to the term, particularly when the Office of State Revenue is chasing Land Tax payments.
Essentially Land Tax is not payable on land that is a “principal place of residence” – that is, residential land that is used and occupied by the owner as their principal place of residence and for no other purpose (with limited home business exceptions).
When determining whether a property is a “principal place of residence”, the following factors are taken into consideration:
the architectural design and physical character of the property (such that a sleeping place or presence of a bed does not necessarily make the property a “residence”)
matching the owner’s tax returns, utility bills and drivers licence to the address claimed as the principal place of residence
the legal right to occupy the property (for example, living in a shed whilst a house is constructed)
whether the residence is habitable
whether the utility consumption for the property (for example water, electricity and gas) indicates the owner is living in the residence
With the Chief Commissioner of State Revenue always on the lookout for landowners trying to avoid Land Tax, it is important that the property claimed as your “principal place of residence” is actually that – falsely describing your property as a principal place of residence attracts interest and steep penalties.
It is also necessary for landowners with multiple properties to register for Land Tax so as to receive annual assessments. The Land Tax threshold for 2013 is $406,000 – meaning if the combined unimproved land value of all land owned is greater than this threshold, Land Tax will be payable.
If you are considering purchasing land, contact the experienced conveyancing team at Everingham Solomons who can assist you in determining whether you will be liable for Land Tax because Helping You is Our Business.
Click here for more information on Rebecca Greenland.
The Home Building Act 1989 (‘the act’) is a set of laws designed specifically to help residential homeowners who have received sub-standard building work.
The act can help almost any homeowner from almost any form of bad building related work
The act provides protection to homeowners who have constructed a new home, including cases where the home was built with structural defects, with poor quality materials or in a way that departed from the building plans. However, the act is not limited to new buildings and also applies to renovations and home additions as well as any isolated specialist work, like plumbing, electrical work, tiling and cabinet or kitchen making. Basically any work related to building or altering a residential dwelling will be covered under the act.
In certain circumstances, the act even helps the purchaser of a used home to rectify poor building work supplied to the home’s previous owner.
The act helps homeowners in two main ways.
Firstly, it ensures that all tradesmen are insured. This means that if a tradesman is ultimately found to be liable for a building problem, and becomes insolvent or disappears, that there will be an insurer in the background who can pay for the inadequate work to be rectified.
Secondly, the act gives each homeowner a warranty as to the quality of the building work that they receive from the tradesman. The warranties are very broad but basically mandate that:
the work will be of good tradesman quality;
the work will be done in accordance with the plans;
the materials used will be good, new and suitable;
the work will be done on time; and
the work will be fit for the purpose that it was designed for.
The majority of claims made under the act are heard in the Consumer Trade and Tenancy Tribunal (‘CTTT’). This is a real benefit for homeowners. The process is much cheaper and is informal. Applying to the CTTT is not as slow, expensive or as intimidating as going to court.
Just like with most legislation, time limits and warranty periods apply. If those periods lapse before the homeowner makes a claim, the homeowner can lose the right to recover their money or have the work rectified.
If you have any questions about the quality of building or construction work, contact Everingham Solomons, because Helping You is Our Business.
Generally speaking, a lien allows a person to retain possession of another person’s property until the costs or monies have been paid for it.
There can be a statutory lien which gives a person the right to hold the goods until the seller’s monies are paid.
Under the common law there can be a general or particular lien. A particular lien which is more common refers to a person holding goods for work done on those goods until accounts have been paid. Examples of this are a mechanic holding a car until a bill is paid or a solicitor holding a file until their account is paid.
A general lien however allows the person to hold the goods until all sums payable are satisfied. Again to use the prior analogy, mechanics holding a car for bills paid for that car as well as another car, or a solicitor holding a file regarding family law for work done on that file and a conveyance file.
An interesting case on this topic is Stapley v Towing Masters Pty Limited (trading a Dynamic Towing) [2009] NSW CA 382. This involved a tow truck driver claiming a lien over a vehicle. The case was bought by an insurer who argued that a tow truck driver did not have lien over the vehicle.
The facts in short are that the truck driver picked up a vehicle and was asked by the driver’s insurer to drop it to a service centre so that the insurer could assess the damage. When they went to deliver it the insurer refused to pay their account, so the tow truck driver took the car back to its depot and claimed a lien over it.
At first instance the court held that the tow truck driver was entitled to exercise a lien over the car as he was a common carrier.
The Court of Appeal however held that the tow truck driver was not a common carrier and therefore was not entitled to the lien. This matter turned on the facts and whether the tow truck driver was a common carrier and held himself out to pick up all jobs at reasonable rates without reservation.
If you should have any queries about goods being held until payment, please do not hesitate to call us at Everingham Solomons because Helping You is Our Business.
Last year the NSW New Home Grant Scheme was introduced to stimulate the construction of new homes in NSW and remains open today to non-first home buyers and investors alike. Eligible purchasers can receive a $5,000 grant towards the purchase of a new home, a home off the plan and the purchase of vacant land on which a new home will be built.
To take advantage of the $5,000 grant, purchasers must fall into one of these categories:-
The value of the new home must not exceed $650,000; or
The value of the vacant land (upon which a new house will be built) must not exceed $450,000.
This means that a purchaser seeking to purchase a new home will be eligible if the agreement provides for the purchase of land that is the site of a new home which is complete and ready for occupation. A new home is a home that has not been previously occupied or sold as a place of residence, and includes a home that is a substantially renovated home. Whether a home has been substantially renovated needs to be determined in the particular circumstances because it is a defined term under the legislation.
Likewise an off the plan purchase is also eligible for the grant. An off the plan purchase involves a contract for the purchase of land intended to be used as the site of a new home, which is to be built before completion of the agreement.
And finally, a purchaser of vacant land that is intended to be used as the site of a new home and which is not an off the plan purchase may also be eligible for the grant if the value of the land being purchased does not exceed $450,000 and the laying of foundations for the home must commence within 26 weeks of settlement of the purchase of land.
The grant will not be available to purchasers if the new home, or the land on which the new home is located or to be built, is intended to be used for any purpose other than residential such as commercial, industrial or professional.
The above scheme should not be confused with the First Home—New Home scheme. If you are eligible for a stamp duty exemption/concession under the First Home – New Home Scheme, you cannot receive the $5,000 New Home Grant.
If you are considering buying a new home or vacant land to build your new home on there are conditions that apply and you should come and see our experienced property team who can help answer all of your questions, because Helping You is Our Business.
Click here for more information on Lesley McDonnell
<Last week we looked at a landlords rights under a commercial lease where the tenant left the property and stopped making rental payments mid way through a lease.
Our firm brought the matter before the Tamworth Local Court before the lease term expired.
In short there were three periods in which the court had to consider the landlord’s right to damages under the lease. To recap they were as follows:
the time between the tenant ceasing to make rental payments and surrendering the keys;
the time between the tenant surrendering the keys and the date the matter was brought before the court; and
the time between the court date and the end of the lease which was not due to expire for a further six months.
In the first period, the tenant simply owes the landlord the rent not paid, as discussed last week.
In regard to the second period, the landlord could recover the unpaid rent because he was entitled to be compensated as though the contract had been completed without default. During this period however, the landlord needed to show that he had taken reasonable steps to mitigate his loss. This meant demonstrating that steps had been taken to encourage other tenants to lease the empty premises.
The third period is legally tricky. For that period, the court could not be sure that the landlord would continue to advertise the property or that the premises would remain empty.
There is no NSW case law on the point. We researched and relied on a Western Australian case of Luxer Holdings v Glentham which stated that:
Where the matter is decided in court before the term of the lease expired, the normal damages are the total rent that would otherwise have been paid, less any amount the landlord has, or is likely to obtain, as profits from the use of the premises until the date the lease would have otherwise expired.”
We were able to prove that the landlord had taken all possible steps to mitigate its loss up to the date of the court hearing and that it was unlikely that the landlord would obtain any profit from the premises between the date of the court hearing and the expiry of the lease.
Our client was awarded the full value of the rent that he would have been paid had the tenant stayed in place until the end of the lease.
Should you wish to discuss any aspect of commercial leasing please contact Everingham Solomons, because Helping You is Our Business.
An interesting legal point arose recently in a case that I conducted in the Local Court. The question centred around the damages that a landlord is entitled to recover from a commercial tenant that breaches a lease.
Six months into the lease the tenant stopped making rental payments. Nine months into the lease, the tenant surrendered the keys to the premises and moved out.
Court proceedings were brought by the landlord and when the matter came before the Tamworth Local Court, about six months of the original lease term remained yet to expire.
The court had to consider whether the landlord was able to recover from the tenant, rental payments for three separate periods:
the time between the tenant ceasing to make rental payments and surrendering the keys;
the time between the tenant surrendering the keys and the date the matter was brought before the court; and
the time between the court date and the end of the lease which was not due to expire for a further six months.
Leases are contracts. There are two general contractual principles which have relevance.
Firstly, where a contract is unlawfully terminated by one party, the other party is entitled to recover damages so as to place him or her in the position that he or she would have been in, if the contract had been completed .
Secondly, the aggrieved party must take reasonable steps to mitigate his/her loss. You cannot claim for a loss that you have not attempted to avoid.
In respect to the first period of time, the application of the law is relatively simple. The tenant owes the landlord money just like a debt. The landlord cannot mitigate their loss because the tenant was still in the premises.
Establishing the landlord’s rights to damages in the second and third periods is a little more complex and requires further explanation which will be explored in an article next week.
If you have any questions regarding commercial leases, please do not hesitate to contact Everingham Solomons because, Helping You is Our Business.
When buying a rural property, it pays to do your homework. Rural conveyancing is a complex area in which purchasers need to take care to ensure they know exactly what they are buying.
The general principle of “caveat emptor” – buyer beware – applies to all land purchases, but has particular significance for rural properties. Not only is a farm a home, but also a business. Failure on the part of a purchaser to adequately investigate the property can have not only functional implications, but often monetary consequences too.
It is generally advisable for purchasers to conduct pre-purchase searches or enquiries prior to entering into the contract – once contracts are exchanged, the purchaser is locked into the deal and it will be too late to withdraw if a problem arises.
Some common searches include:
Livestock Health & Pest Authority – provides information regarding chemical residue and stock diseases.
Crown Lands – ascertains whether there is any land within the boundaries of the farm that does not belong to the Vendor and for which a rental may be payable to the government.
Mineral Resources – with mining and gas installations becoming ever more common, this search identifies whether any exploration or drilling licences affect the property.
Water entitlements – the implementation of water sharing plans is changing the nature of water licences, whereby water entitlements that were once attached to the land can in some situations now be severed from the land and sold separately. The distinction is important not only for the purchaser’s use of the water, but also as it alters the conveyancing process in terms of ensuring the purchaser receives legal title to use the water.
Building entitlements – the introduction of new local environmental plans is changing Council requirements regarding the lot size on which dwellings can be constructed. A farm may have no value to the purchaser if they cannot build their home on the property.
There are a plethora of other enquiries which can be made, however the searches will differ depending on the location and proposed use of the property.
Whilst the searches require money to be expended prior to securing the purchase, it is worthwhile outlaying some funds to ensure the property will meet all of the purchaser’s requirements.
If you are considering buying a rural property, contact the experienced team at Everingham Solomons where Helping You is Our Business.
Click here for more information on Rebecca Greenland.
Purchasing property can be both an exciting and daunting experience. Exciting because on the one hand you have found the property you have been searching for and you start dreaming of what you will do to transform the house into your home. In what can seem like the daunting side to your property purchase is the point at which you first lay eyes on the contract for sale of land. The contract requires you to make some important decisions. When you purchase property with your spouse or partner, you must decide how you will buy the property together. You can purchase either as joint tenants or as tenants in common. The distinction between the two is an important one because it can have an impact on future life events for example a relationship breakdown or death.
If you purchase property as joint tenants, this means that upon your death, your interest in the property automatically passes to your spouse/partner. This is despite any provision in your will to the contrary. This is because your interest in the property does not form part of your estate and it is not available for distribution to the beneficiaries of your will. Many married couples own property as joint tenants. Also a joint tenancy may exist where property is held in trust.
By contrast, if you purchase as tenants in common, then your individual share in the property can be gifted in your will. Furthermore the respective shares in the property may be held equally (e.g. 50/50) or in some other proportion (e.g. 60/40, 75/25 or 80/20 etc). Sometimes couples may choose to own property as tenants in common if for example there are children from a previous marriage for whom they wish to make provision upon their death. Also investors often buy property together as tenants in common.
If property is owned as joint tenants there is a process by which that property holding can be unilaterally severed by one party. The other party is given notice of this before it occurs. There are circumstances where this can be an appropriate course of action.
Being aware of your options can assist you in making a more informed choice when it comes to buying your next property. At Everingham Solomons we have the experience to assist you with all your property needs because Helping You is Our Business.
Click here for more information on Lesley McDonnell
Where a person leases a house on a farm, it can sometimes be unclear whether they are a residential tenant or an agricultural tenant.
