Q & A on 2GB discussing property law 22/9/2015
Tuesday, 22 September 2015
WM –Warren Moore /PS– Paul Sant /C1,2,3, etc – Callers
WM And joining us in the studio today by our Turner Freeman Lawyer Paul Sant who’s here to discuss everything to do with property law. How are you Paul?
PS Good thank you Warren.
WM I better say 131873. Call now. We are only here for about 15 minutes or so and last time you were in, or at least recently when I was filling in for Chris, it was very very busy, wasn’t it?
PS It didn’t stop.
PS Yes, I remember that well.
WM I’m sure you did. 131873. Now obviously this is an area of law that affects so many people, so if you have any questions about property law, 131873. And there is a bit around at the moment, as there always is Paul, changes and particularly when you’re talking about one of the things you, about the buying off the plan.
PS Buying off the plan. There’s a whole raft of changes being talked about, legislation going before the parliament. The latest one about, and I have to admit, it is a mate of mine, I’m sorry… is well…. calls to remove provisions which enable developers to get out of contracts based on the sunset clause provision. So, you buy off the plan, the thing doesn’t exist, there’s a clause in there that says if we don’t build it by 31 December 2015, either party can pull out.
PS The developer for whatever reason, things get delayed, costs go up, the market goes through the roof, nothing gets finished. Come 31 December, two weeks later writes off to all the buyers, sorry we haven’t completed by the sunset date, contract is rescinded, here’s your 10% back. Oh, by the way, you can buy for you know 50% more.
WM Oh, how bad is that?
PS That’s exactly what happened. That’s exactly what happened at I think at Surry Hills…..
PS And again I think there was another incident at Alexandria. The same provision. And mind you Western Australia has got different provisions….Those provisions, it’s the buyer who’s got the right to pull the plug, not the developer and that’s what they are going to introduce here…. actually, it’s about bloody time.
WM Yeah. I mean you’ve got to be so careful about buying off the plan. I have to say as an individual, I wouldn’t if I was going to live in it, because, not only because of all of the issues you’re talking about, I just like to see the ambiance…. I mean buying off the plan, you are never going to get the true feel of it are you?
PS Especially if they are doing staged development, you know you think you are going to have this view.
PS But you don’t imagine the next unit of the next block is going to come in front of you and you’re not going to have that view any more, but you’ve so much before….
WM Well that’s just a personal thing for me…I wouldn’t do it, but from an investment perspective it’s different too, isn’t it?
WM And the other thing coming about is revolving around real estate agents isn’t it?
PS It is. And this is ….. are actually before….. I think went before the senate. It’s going back before parliament I think in October. So it’s pretty close with that coming into play. To stop this price bating business. Now, look, it relates to auctions and what they’re enacting is that if an agent gives…. an agent is required to give a genuine estimate of the price they are expected to get at the auction with the contract with the vendor and he cannot advertise a lower price. So he can’t say to the vendor, listen I think your place is going to be worth a million but we’ll tell everyone we’ll start at 800 so we can get more and more people in.. right.
PS But there’s…… look again there’s another issue that’s been around for a while. One of the reasons for this new change in legislation is, well people pay hundreds of dollars to get pre-inspection reports prior to auction.
WM That’s right.
PS Because if you put your hand up and you succeed, it’s yours. Full of white ants, bad luck Charlie boy.
PS But there’s an easier way to fix that. Make auction contracts include Pest Reports, Building Reports, Survey Reports, strata.
PS Then people don’t have to spend that money. Right?
PS That to me is the easier way…..
WM You know, you talk about that money. If you are trying to get into your first ever property, you are struggling to get the deposit together and you are just on the verge, but you miss out on four or five properties, you can be out of thousands.
PS Yes that is exactly right. And especially if you’ve you know bated in and you are, it’s going to go for a certain price. If it goes to say $20,000/$30,000 more.
WM Yes, I mean it’s bad for anybody but I particularly feel for those struggling to get their foot in that first door if you know what I mean.
PS Yes. It’s a good change.
WM 131873… yes…. 131873. Now Turner Freeman Lawyers and their Legal Matters segment. We’ve got the $100 Westfield Voucher we give away each week, so one of our callers will get that. Remember to pick up your news local paper each week to read the Turner Freeman Legal Matters Column with lawyers covering topics such as compensation and negligence law, family and employment law, wills and estate law and superannuation and disability claims. Now Paul, we’ve got Adam on the line for you. What’s your question there Adam?
Caller 1 – Adam
Adam How are you going Paul? I’m just wondering if you’ve got a property overseas that was given to you/inherited to you and put in your name by your father and you wanted to sell it and bring the money here, so you can better your life here. I was wondering whether you have to pay tax for that?
PS Hahahaha…… I think no, but, there is a provision income tax returns which asks you whether you have any property overseas. Now, if you have a property that earns an income, I know that you know with certain countries there’s legislation about double taxation and all that sort of stuff. But, no – the fact that it came in……
Adam It’s not earning any money or nothing….
PS No. And actually if it’s an inheritance, no. Because if it’s a property you gained by inheritance and you brought the money in, there shouldn’t be an issue.
Adam Because it was given to me by my father and put in my name and it’s just that, my wife isn’t over there anymore and she’s over here, and I want to sell it, it’s not earning any rent as such…. it’s just land sitting there, but I just want to bring the money here and work it here… you know.
PS I think if there’s no implications for tax, you know there is not issue at all.
WM Okay, good on you Adam, 131873, hello Jim.
Caller 2 – Jim
Jim G’day mate, how’re you going?
WM We’re good. What’s your question?
Jim My question is, I sold a house recently. The buyer signed the papers as I did and he had no money. So instead of putting down a deposit which he didn’t have, the real estate agent accepted him because he was selling another property. Instead of putting in 10% deposit, he only put in about 2% deposit. Question is, am I entitled to that 2% that is sitting in there and so, because the second buyer that we eventually got a second buyer, puts $20,000 less, can I charge the real estate agent for that loss of money?
PS Yes. Now we’ve got a whole bunch of questions here.
Jim Oh, it’s a long story mate.
PS Sounds like it. In a normal real estate transaction a buyer only has to put down, sorry, a normal transaction and a more common transaction, a buyer only has to put down .25%. He has a 5 day cooling off period. So in that 5 day, he can pull the plug.
Jim He didn’t put in any extra in. We’re talking over $1 million dollar property and we are talking about $10,000 deposit.
PS Okay, was it signed off with a cooling off period? Or was it a binding contract there and then?
Jim Well as far as I know, it was a binding contract.
PS Alright, there’s a 66W Certificate. And what, you’re telling me that the contract said that he had to pay a 10% deposit and no-one changed it. You didn’t sign an authority with the agent accepting.
PS Are you sure?
Jim Of course I’m sure.
PS Because I’ve seen a lot of paper – I’ve seen a lot of contracts where the agents get vendors to sign a clause that says “we will accept 5% or 2% or whatever it happens to be.
Jim Oh I only signed one bit of paper….
PS So, if there is no variation to the contract and the contract required a 10% deposit, the purchaser is in breach of that contract.
PS So you then terminate the contract and then you’ll be entitled to the 2% deposit.
WM Okay Jim.
Jim Do I have to take him to Court to get that?
PS The agent probably won’t release it unless the purchaser agrees or if there is a court order. They won’t automatically release it. It’s not like the cooling off provisions.
Jim Well my solicitor sent a letter to his solicitor asking for that deposit and we haven’t received a reply, so where do we stand?
PS You would then have to make an application to the court to get an order that you’re entitled to that money.
WM Okay Jim, unfortunately it is more legal action by the sounds of that. Hello Marie.
Caller 3 – Marie
Marie Good afternoon. What I want to know is if you’ve got a caveat on a home and you should die, does the caveat die with you or does it continue on until there’s a settlement of some sort?
PS In other words someone has placed a caveat on your behalf on another property?
Marie No – on my own property.
PS Oh a caveat has been placed on your property?
Marie By me.
PS Sorry, by yourself? You wouldn’t place a caveat on your own property?
Marie Well I have because I had the property taken off me.
PS Alright okay so you’ve placed a caveat on your own property.
Marie Yes. I want to know…….
PS It’s the basis of the caveat. Let’s say that the caveat was based on a contract or some sort of mortgage document or some sort of loan document, that says the benefits and rights of that contract carry on to heirs and administrators and no it doesn’t die with you. If it wasn’t based on that, then it may depend on the basis of the contract, the grounds upon which the caveat is based on sorry.
Marie Yes, well that seems like what you said was the correct thing.
WM Okay Marie.
Marie Thank you.
WM So that’s the advice you wanted? Okay. Clear I think. 131 873. Hello Diana.
Caller 4 – Diana
Diana Oh hi. Just a quick query if you don’t mind. I’m on a disability support pension and I live in a certain area in Sydney and I rent community housing. My father passed away late May and I just wanted to know…. we are selling the flat…. he left a flat and my sister and I are supposed to be sharing that but I don’t know as yet, we haven’t read the Will. Having said that, I just wanted to know if I had to pay any percentage of that inheritance towards my rental because according the Community Housing, I do and…….
PS It depends upon when….. I don’t think anything happens until you get your inheritance. Now, if that inheritance happens to be a million dollars, I’m sure that under the terms of the contract…. I mean I am just picking a figure out of the air……
Diana Oh okay yes.
PS I’m sure under the terms …… because it’s a….. sorry…. assisted residential accommodation, I’m sure there are provisions in there that the rent might be somehow tied or connected to in…Now income would also include interest on monies and therefore that’s where it would affect what rent you would pay I would think. But you’d have to look at the agreement, the rental agreement.
Diana Well I’ve asked Community Housing on a number of occasions to send me that agreement in writing and to no surprise to me they just haven’t and my request is falling on deaf ears basically.
PS Contact your local member…
Diana I tried that in the past about something different and nothing happened there either. I just wanted to know is there somewhere until…… because I mean if I do get any of this inheritance, it won’t last long believe me because there are a number of things that I need to do that I’ve wanted to do for many many years in my life, so it wouldn’t last long.
PS Then it may not affect you.
WM Okay Diana.
PS I think it’s based on income.
WM Okay, we’ll take a break and quickly back with another call. It’s 11 to 2.
WM And Paul Sant from Turner Freeman Lawyers in the studio. We are talking property law. Our final little bit for this week and Paul, we’ve got Tom on the line. G’day Tom….
Caller 5 – Tom
Tom Oh, Good afternoon. How are you?
WM We’re well.
Tom Good. Question. We had….. we made an offer on a property 4.8 million dollars. We gave the estate agent for the fellow a $500,000 cheque with contracts written up by our lawyer and at the very last minute the seller pulled out and sold it to somebody else. Why isn’t gazumping illegal in New South Wales?
PS Well gazumping is but well… sorry… that’s why they introduced the current conveyancing system where you can exchange contracts straight away and you’ve got your five days to then do all your enquiries and organise your finance for example.
Tom Yeah…. we had finance, we had everything ready to go….
PS But see, there’s no contract until such time as that both parties have signed and dated.
WM Have both parties signed Tom?
PS It was signed on our side but not theirs.
WM Not theirs. You see, there’s no contract…. there.
Tom Yeah I know.
PS And that’s why this idea now….. well it’s been around for a long time….. it’s been around for a number of years actually… you know that you can actually sign the contract there at the agent and you know…. as long as the vendor then signs the contract you’ve got them locked in and you can to do all of your enquiries and get your finance organised.
Tom Oh right. Okay.
WM Good on you Tom.
PS And that was anti-gazumping legislation actually.
WM Yes it’s very frustrating when it happens but….
PS Especially in this market.
WM Yes. It’s such an emotional thing too. If it’s your home. It’s going to be your home. From a legal perspective your might not have even signed anything. It might only be verbal but when it does happen it’s…….
PS Because once you…. I’ve been through it…. Once you walk into the one that you want…. you know it…. you want it…
WM Yes…. it’s it…. then you’re told it’s ours and it’s not. Geoff quickly… G’day Geoff.
Caller 6 Geoff
Geoff Hi. A Council put a caveat on my property about 30 years ago I was starting to build a 2 storey house. I found out from them that there was a caveat on the land, not the two storey house to be constructed. Now, we wanted to extend the house, what do we have to do to remove the caveat if I have to do anything?
WM Okay Geoff, what are you talking about a caveat or is that just the zoning of the area?
PS I think its zoning.
PS Is that the zoning? It’s not a caveat.
Geoff No caveat from the Land and Environment Court I was told.
PS Oh well someone….. well not from the actual Court… Someone must have brought proceedings to restrict or restrict a two storey house being built on there and therefore they’ve put that restriction on there.
WM Oh okay….. we are almost out of time….
PS The only way you can remove it is to go back to the Court.
WM Yes. Have to go to the Court. Sorry about that Geoff… Yeah. Normally you would only have a zoning issue on that sort of thing wouldn’t you?
PS Correct. Someone might have the rights for example, might have been a sub-division, some guys got views and so he puts a restriction that you can’t build a 2 storey to block the views. Someone tries to build and you go to the Land and Environment Court to get your rights protected.
WM Okay. Thank you for that Paul.
PS No problem.
WM Much appreciated. Paul Sant and that is our Legal Matters from Turner Freeman Lawyers. Their number of course is 134363 – That’s 134363. Our number is 131873 and back after the news.