Property Law & Strata

The ATO has issued a private binding ruling which provides information on potential tax implications that can occur with limited recourse borrowing arrangements in an SMSF.

The private ruling relates to an SMSF borrowing 100% of an asset’s value on an interest free, related party loan.  In the circumstances set out in the ruling, it was found the parties were not dealing at arms length and as a result the fund would receive more income than would have been the case if they were dealing at arms length. [...]  READ MORE →

For vendors of properties with swimming pools, the new swimming pool legislation meant that a certificate certifying compliance with the regulations needed to be attached to their sale Contract.

Failure to comply with the regulation meant purchasers could to get out of the Contact for a period of 14 days after entering into the Contract.  This requirement was set to start on 29 April 2014.

The Department of Local Government has announced by circular to local Councils that the requirement to include a Certificate of Compliance or Occupation Certificate in a Contract for the Sale of Land or a Lease of property with a swimming pool has been pushed back to 29 April 2015. At this stage legislation has not yet been amended to reflect the above, but we assume it will be in the near future. [...]  READ MORE →

The recent case of Burwood Council v Ralan Pty Limited raises interesting issues in relation to the extent to which a construction certificate must not be inconsistent with a development consent.

Ultimately, the key matter for determination in the case concerned the issue of 6 constructions certificates (“CCs”) in relation to the erection of a mixed-use development consisting of 268 dwellings in 3 towers, shops and commercial suites over 4 levels of basement parking.

Clause 145(2) of the EP&A  Regulation prevents a certifier from issuing a construction certificate which is inconsistent with a DA. The Council argued that there were many inconsistencies between the development consent and the CCs but the most significant inconsistencies was the finish and appearance of the building which resulted due to the external louvres shown on the approved DA drawings not being incorporated into the building and the as-built finishes, including the window frames and colours being different to those in the approved DA drawings. [...]  READ MORE →

Section 58 of the Property, Stock and Business Agents Act 2002 provides an agent must not enter into an agency agreement with a person in respect of the sale or purchase of residential property if:

(a) the agreement provides for an entitlement to commission in respect of services to be provided at a time when the property is or is to be the subject of a sole agency agreement or exclusive agency agreement with another agent for the provision of those services, and

(b) the agent knows or has reasonable cause to suspect that the person has entered into that sole agency agreement or exclusive agency agreement. [...]  READ MORE →

Recent Case

The decision in Barlin Investments Pty Ltd v Westpac Banking Corporation (2012) 16 BPR 30,671; [2012] NSWSC 699 (Ball J) highlights the fact that s43A can override long established priority principles and the fact that the provision’s purpose is to protect purchasers and mortgagees in the interval between completion and eventual registration of their dealings.  It also highlights the wisdom of lodging and maintaining a caveat to protect an unregistered interest.

Facts                                                                                                                       [...]  READ MORE →

Westpac Banking Corporation (as Plaintiff) v Kurobe Holdings Pty Ltd and Karovel Nominees Pty Ltd (as Defendants) [2010] NSWSC 537

This case, between landlord and tenant, concerned the validity of an exercise of option, in relation to a lease.

Two issues arose:

1) whether the notice is valid; and

2) if not, whether the defendants are estopped from denying that it is.

The facts:

• On 6 August, Kurobe’s (Landlord’s) managing agent, Sydney Property Management Pty Ltd (SPM), sent a letter to United, Westpac’s leasing agent, a letter asking them to consider taking up the option period.
• On 29 August Mr Loblay, director of Kurobe and SPM, sent a letter to Westpac (Tenant) notifying them to send future notices to Kurobe’s new address.
• On 16 October United (Tenant) sent a letter to SPM (Landlord) with a notice of intention to exercise the option.
• On 20 October, Mr Mann of SPM acknowledged receipt of United’s notice of intention by signing it and returning it to United.
• On 8 November 2008, the option period expired.
• On 1 December 2008, Mr Loblay sent a letter stating “we note you have not exercised your option to renew the lease”.

Issue 1: Is the notice of intention to exercise the option valid?

Held: The notice of exercise of option was valid for the following reasons: [...]  READ MORE →

In Gubbay v Burnet [2012] NSWCA 174 Ms Gubbay purchased property from Mr Burnet and Ms Clancy (“the Vendors”) at an auction for $2,300,000.

The Contract for the Sale of Land provided for a 10% deposit, being $230,000. The Contract was exchanged and Ms Gubbay provided the Vendors with a cheque for $2,300,000.

Some four days later, the solicitor for Ms Gubbay wrote to the solicitors for the Vendors advising that the cheque would be dishonoured as Ms Gubbay did not have the means to pay it.

The solicitor for the Vendor raised the possibility of a $50,000 replacement deposit in lieu of the $230,000 deposit. However, no agreement had been reached. [...]  READ MORE →

The Building Energy Efficiency Disclosure Act, 2010 (“the Act”) came into effect on 1 November, 2010.

The purpose of the Act is to provide potential purchasers and tenants of commercial office buildings comprising an area of more than 2,000m² information regarding the building’s energy efficiency.

All owners of large commercial office buildings are not required to obtain a NABERS Certificate (National Australian Built Environmental Rating System) which provides potential purchasers and tenants with: [...]  READ MORE →

Many developers often offer purchasers of property a rebate for undertaking certain works after completion, such as landscaping and complying with design guidelines which improves the quality and amenity of the subdivision. These rebates do not raise fraudulent concerns.

However, some rebates are for a significant portion of the purchase price. For example, rebates relieving the purchaser of the obligation to pay a deposit. In Miro v Fu Pty Ltd [2003] NSWSC 1009 the Court observed that it was “this type of clause is quite improper. It can be inserted for no purpose other than to mislead persons such as lending authorities and purchasers of other units in the development”. [...]  READ MORE →

Many developers often offer purchasers of property a rebate for undertaking certain works after completion, such as landscaping and complying with design guidelines which improves the quality and amenity of the subdivision. These rebates do not raise fraudulent concerns.

However, some rebates are for a significant portion of the purchase price. For example, rebates relieving the purchaser of the obligation to pay a deposit required under a contract. In Miro v Fu Pty Ltd [2003] NSWSC 1009 the Court observed that “this type of clause is quite improper. It can be inserted for no purpose other than to mislead persons such as lending authorities and purchasers of other units in the development”. [...]  READ MORE →

What is a Retail Shop Lease?

The Retail Leases Act 1994 defines a retail shop lease as any agreement under which a person grants or agrees to grant to another person for value a right of occupation of premises for the purpose of a retail shop.

How does the Act define a Retail Shop?

A retail shop is defined as premises that are used wholly or predominately for the carrying on of one or more of the businesses prescribed in Schedule 1 or are being used for the carrying on of business in a retail shopping centre. [...]  READ MORE →

The new National Credit Code (“NCC”) came into effect on 1 January 2011, replacing the NSW Credit Code.   The NCC is Schedule 1 of the National Consumer Credit Protection Act 2009 (Cth).  This means that the Commonwealth, not the State, now has the power to regulate credit and finance broking.

When does the National Credit Code Apply?

The National Credit Code applies to the provision of credit by a financial institution to an individual (or strata corporation), where the credit is provided or intended to be provided wholly or predominantly: [...]  READ MORE →