Wills and Estates lawyer on the Chris Smith Afternoon Show
Tuesday, 10 March 2015
Chris: Turner Freeman Lawyers, Paul Sant in the chair for the first time in 2015 I guess although it sounds belated Happy New Year to you Paul.
Paul: Thank you Chris.
Chris: Good to see you.
Paul: Good to see you too.
Chris: A lot of people come onto the program one week we are talking Wills and Estates the next week we might be talking Family Law and then property and then maybe even something to do with Employment Law. It’s a little bit of a free for all today listeners although there are some aspects of property law we want to tackle today and given the fact that the market is going through the roof at the moment in Sydney you may have some property law issues, some settlement issues, some deposit issues you want to run past Paul go ahead and do it right away. 131872 but if we want to touch on Wills and Estates and Family Law he is quite happy to take your calls in a general sense today on the open line number 131 873.
Free advice don’t forget and I should make mention we have got that $100 Westfield voucher to give away to the caller of the afternoon as we do each and every Tuesday afternoon so we will do that as well $100 Westfield voucher for the best caller of the afternoon and on top of that don’t forget to pick up your local paper because Turner Freeman has a legal segment in there which usually corresponds with what we are doing on air each week and it’s a really handy guide to various aspects of the law which may be helpful to you depending on your circumstances.
Its 11 mins after 1.00 o’clock Paul Sant now property law I wanted to ask a question mainly because I have been following the market at the moment where its hot, where it’s not although I can’t find too many places where it’s not.
Paul: If you do tell me.
Chris: It’s out of control.
Paul: It’s crazy.
Chris: Can I say that I’ve noticed too people are settling quickly. Now normally if I was in a settlement I’d say well six weeks.
Paul: Six weeks is the standard contract provision.
Chris: Yeh if my bank is a little slow on it I will give them an extra two maybe two months just depending on where I am living now so I can work out when I can get in etc. But I’ve noticed some very short settlements. How short do they get.
Paul: We finished one about two weeks ago which was two weeks exactly.
Paul: We settled in about two weeks.
Chris: How does that happen.
Paul: Well in a particular situation our client the vendor had no mortgage, we held the title deed the buyer I am pretty sure didn’t have an incoming bank. The enquiries that years ago used to take weeks to get are now available online. Now you don’t get all of them straight away but you get a majority virtually straight away the rest are within a week.
Chris: So you mean things like from the council.
Paul: Council, outstanding council rates or outstanding water rates, um land tax.
Chris: So you can do that online now.
Paul: All the big providers – service providers will provide that type of package for all enquiries to come through online. Now some of them don’t some of them will take a bit extra time I think about a week it may be two. Sometimes you will get.
Chris: That’s not long though.
Paul: No it’s not long. But then um usually what does happen of course is the buyer if he has got an incoming bank then you’ve got to satisfy the bank requirements. You have got to sign the mortgage papers. You have got to get the bank documents back to the bank. They have got to check them and then they go to their settling people so there is movement from one section to another. That usually um look banks they’ve smartened up. I mean there always used to be a drama trying to get them to settle in six weeks but things are flowing much quicker these days.
Chris: Look I’ve always felt safer having a conveyancer or a solicitor who would handle all of that and be the umbrella holding fort for all those little bits and pieces.
Paul: Yeh indeed.
Chris: It can be a pain. 131 872 before I take your calls there is another more current issue that we need to canvass today which may have an impact on some buyers who are out there with a little bit of money in their hands who are looking for some smaller units to purchase or buyers who have just purchased some smaller units. There has been not a change but a new regulation with the State Environmental Planning Policy Paul.
Paul: Yeh it’s been around since about 2009 and what it was – what it is, is an attempt by the State government to provide an incentive to developers to build residences and what the government has said is “Look we will let you build more than what you can otherwise build provided we get something in return” and what the return is they will sorry for the developer instead of being able to build for example 10 units they could build 15 units or 14 units of whatever it happens to be. The floor space ratio is almost doubled in some instances. So instead of being let’s say a one bedder you would probably be looking at an average of about 55 odd square metres. You know they will allow for example 40 square metres. Much smaller, much cheaper on the market. People go for it and get a cheaper unit. But the other side of the coin is that the government says alright but the condition is that a certain percentage of these units have to be for about ten years from the date of completion have to be made available for affordable housing and the rent has to be managed by a registered community housing provider. So it’s to assist lower income, those in need to provide accommodation for those who couldn’t otherwise rent.
Chris: Almost a semi public housing scenario.
Paul: Correct let the developer do it. We give the developer something back instead because of building 10 units you can build 14 or 15.
Chris: And that might impact on what you have and what you want to use your apartment for.
Paul: Correct the problem well the issue is that you might look at a property. You might not even know that the rest of the complex is subject to these affordable housing provisions. Now in some instances something up to 50% of that development must be provided for affordable housing. In some instances it is only about 20%. You may not know until the time comes to settlement there is a little covenant saying that these properties have got to be used for affordable housing.
Chris: So it can be a pitfall how do you find out exactly what the plans are?
Paul: One thing that I always ask but rarely or not often get is a copy of the DA conditions. It’s things that we will strike out. If it’s a small unit or it’s a complex of a lot of small units bells will start to ring and say hold on is this affordable housing?
Chris: DA conditions.
Paul: We then look at also the Zoning Certificate. There might be something disclosed in that.
Chris: Okay still on property Antonia you have got a question for Paul. Go right ahead.
Antonia: Yeh hi if you subdivide your own block of land if you have a large enough one to subdivide do you have to then pay capital tax on your subdivision.
Paul: The capital gains tax would only apply when you dispose of one of those subdivided lots. Now I am not an accountant that’s number one and this is more of an accountant’s advice but my own view is you own a resident let’s assume it’s your primary place of residence. You subdivide into two lots. The other lot I am assuming you will do what sell or develop? If you sold it straight away I wouldn’t have thought there would be a capital gain on that because you’ve virtually acquired and sold it for the same price. If you held it and then the price went up there is a price gain that would be subject to capital gains. But then again I am not an accountant.
Antonia: If you built on it would you then have to…
Paul: Doesn’t matter it depends on the use. If it’s your primary place of residence its exempt. If it’s used for an investment it attracts capital gains.
Chris: Alright Antonia thank you very much for that. Joe go right ahead.
Joe: Yeh goodday look I am hoping to purchase a property at auction in two weeks time. There is a lot of rubbish on the property inside and out it’s a bit of a hoarder house. Where do we stand, you know come settlement time if the rubbish on the property.
Paul: It depends on the special conditions contained in the contract If there is a clause in the contract a special condition which says, You will take all the rubbish with the property you are stuck. General law.
Chris: The contract that they have issued doesn’t any of that. How do I get that put into the contract.
Paul: You don’t well you go to a solicitor or conveyancer who will write a letter to the other side and say Listen I am acting for Joe he is interested in bidding if he succeeds he wants a clause to put in the contract which says the vendor is going to clean off the rubbish. Now just going to general law there is general law to say when you purchase the property you purchase the land and the house. You do not purchase the rubbish and I’ve used that argument a number of times where I have required the vendor to clean up the place before we settle. But then you are in a situation where you are arguing and you know they are alleging you have got to pay interest and you’re saying no it’s their fault and all this sort of stuff. Better off to have a clause in the contract.
Joe: No worries thanks a lot.
Chris: Good on you Joe thank you 131 873 a break and back with Turner Freeman’s Paul Sant talking primarily about property today but you can use this segment as a free for all Wills and Estates, Family Law maybe some other issues you would like to ask about. Free advice courtesy of Turner Freeman.
A legal free for all on this segment today, Turner Freeman free legal advice Paul Sant in the chair happy to take your call. Hello David.
David: Yeh good afternoon Chris. Good afternoon Paul.
David: Now a property question for you Paul. I am looking at buying a house and land situation but all the documentation searches I have done on the land size is conflicting. For example council documentation is say 784 sq metres. Land papers say it’s 802 square metres but I believe the physical size of the block I want to purchase which was subdivided into two blocks the actual physical size is under 500 square metres.
Paul: So originally it was 800 then cut down.
David: I believe the documentation implies to the two blocks which was block 1 and block. Let’s say for example the street number is no. 7.
Paul: Yeh forget that mate because the council. I have had instances where the council call it one thing and everyone else knows it as something else. Look the answer falls in the DP plan. You are buying a lot in a deposited plan. Attached to the contract is a copy of that deposited plan and that deposited plan will have the size area. The area is clearly there and that will tell you. That’s the bible that’s it.
Paul: Now if you want to know exactly then of course you can get a surveyor out to come out and he will check the fences and he will tell you exactly what it is. But you are buying a lot in a certain plan. The deposited plan will indicate the dimensions of that block plus it will also give you the area.
Chris: Okay David I have got to leave it there. Margaret from Turramurra go ahead.
Margaret: Yeh say if I had 4 or 5. Say I had 5 properties and I was going to leave them to my children. The one that I live in doesn’t have capital gains because it’s the principle place of residence.
Paul: That’s right.
Margaret: If you gave a property to somebody else in the family do they have to pay you know stamp duty and everything else on that property to get it put into their name?
Paul: Okay if it’s pursuant to a Will a Probate Will then the answer for stamp duty is no. Oh sorry $10 that’s the stamp duty you pay for a Transmission application. The value of the property is irrelevant. So transferring it pursuant to a Grant of Probate ten bucks. Your question started out about capital gains. Now if these other properties if they were bought by you or acquired by you after September 1985 then of course the capital gains is ticking. But what happens if a property is passed pursuant to a grant of Probate or pursuant to a Will they don’t pay capital gains there and then. They pay it when they dispose of it. But the gain is calculated from the time you acquired it.
Margaret: No just transferring it into their name its only $10.
Paul: Stamp duty.
Margaret: Even if its more than one property.
Paul: No well its $10 per property because I am assuming you are going to be doing five separate transfers although if you are giving two properties to one person it might only be $10.
Margaret: Thank you very much.
Chris: Good on you Margaret thank you. Lesley go ahead.
Lesley: Oh good afternoon um I am just enquiring um whether you can pull your super. I have been diagnosed with MS and I was hoping I am in a rental property at the moment that I could pull some super and probably buy a little relocatable up the coast or something so that I don’t have to pay this enormous rent it Sydney.
Paul: There are hardship provision in most superannuation deeds. Look it’s something I know our firm is doing it where they are making applications on behalf of clients to get access to their super. I’ve seen super being provided for example you have a mortgage you are in default or you are out of work you have had an accident and can’t pay they will give you the money and you pay off your mortgage. Whether they will advance it to enable you acquire something so that you are not renting I am just not sure that falls within the hardship provisions. But there is a provision in each super deed it’s a question of your trustee and what they determine.
Lesley: Okay thank you very much for that.
Paul: No problems.
Chris: Alright you are whizzing through them this afternoon.
Chris: I tell you what with gas. Mary hello.
Mary: I bought a property it had some old sheds on it before I moved in. I moved in and the previous owner has demolished them but they were asbestos. I have got asbestos everywhere.
Paul: When you say the previous owner has demolished them oh so they were demolished them when you bought them. They weren’t there when you bought them but you found out there is asbestos on the property.
Mary: No they were there when I bought them. Then they demolished them before I moved in.
Paul: Were the sheds noted on the contract as being sold with the property?
Mary: Oh gosh that’s the only thing I don’t know.
Paul: And you’ve settled it?
Paul: Look there are – now contamination is a peculiar area. How long ago are we talking about.
Mary; Three weeks.
Paul: Oh well it’s within the time. There is a period of about twelve months. There is an implied warranty that there the vendor says that he is not aware of any contamination now if he demolished the sheds. But hold on you would have seen the sheds. You would have seen that they were fibro wouldn’t you.
Mary: Well the sheds were there when I first had a look at the property.
Paul: Well they weren’t tin sheds obviously. It was asbestos.
Mary: Well they were fibro sheds.
Paul: Why I am just surprised that he would demolish. There had to be some reason. It’s strange for a vendor to demolish the sheds because you buy the property as is.
Mary: I have no idea why they decided to do it. No idea.
Paul: Yeh if they were nominated in the contract you could say hold on the sheds aren’t there anymore we want to renegotiate the price or we have got to fix this.
Chris: Maybe the sheds should not have been there.
Paul: But then again once you’ve sold it you know you are not aware of anything or you’re supposedly not aware of anything and they have sold it.
Chris: Someone needs to sift through Mary’s contract.
Paul: You’ve got a window of about twelve months I believe in case something crops up that you weren’t aware of and as contamination is an issue.
Chris: Yeh you’ve got twelve months to work on that one but someone needs to look at the fine print and work out what was already approved. If it wasn’t and then work out exactly what you have at your disposal to do over the next twelve months. Phil Hi.
Phil: Good afternoon.
Phil: A brother and sister are beneficiaries in their father’s Will. However the brother hasn’t been in contact with the family for say ten plus years and correspondence gone to his last known address has been returned unknown. What happens to his share?
Paul: Unclaimed moneys. The Office of State Revenue the government will love you. Office of State Revenue has a section has a department where if you’re the trustee and you have an obligation to give a certain share to this brother and you can’t locate the brother you send off the paperwork to the unclaimed moneys Department at the Office of State Revenue and they hold the money and then if the brother or the son reappears he just contacts the unclaimed money section proves that he is entitled to it and gets his money.
Phil: Right how long has he got to do that. Indefinite?
Paul: Ah good question I don’t think there is a time limit. I suppose it can’t be indefinite sooner or later you will die.
Phil: It definitely doesn’t go to the other beneficiary.
Phil: Okay alright thank you.
Chris: Thank you Phil. Troy you have got a question for Paul.
Troy: Look I have got a friend who is in a bit of a dilemma at the moment. She is separated from her husband. Has no forwarding address for him. She is trying to sell the house because the mortgage hasn’t been paid since late last year and the bank is chasing for recovery of the money. How does she go about selling the house um by herself.
Paul: Right so the husband’s on the title. She wants to sell it. See what you can do is you can make an application to well I am assuming they’ve separated.
Troy: They are.
Paul: So she makes an application to the Family Court. She gets an order for substituted service so in other words she can serve him by for example putting an ad in the paper. She asks the Court for an order that she do everything to sell the house and that the Registrar of the Court signs the documents on his behalf. The Registrar is appointed to sign any Transfer documents.
Paul: Look it’s not going to happen overnight but there is a mechanism yeh.
Troy: Okay and from what I heard before she should be able to also claim for hardship of her superannuation.
Paul: Yeh, yeh she could do that but ahh. Yeh she could do that the only question in this scenario is going to be this. If she then, well I suppose she can deal with it in the Family Court documents. She goes pours some money in to stop the bank from attacking is she going to get the money back. But then again if the husband doesn’t intervene she will get what reasonable orders she would ask the Court and say listen well I have poured this money into it and I want this back and then everything else I want “x” percent.
Paul: And the rest well the rest we will pay to him or we will pay to unclaimed moneys or whatever.
Troy: Alright that’s wonderful.
Chris: Good on you Troy thank you. Buying off a plan Paul if someone and there’s so many apartments now in certain parts of Sydney especially the southern suburbs where you have got the option of buying off a plan. What if you go in and settle and you are moving into your brand new apartment and you are very happy you are either downsizing or it’s a first entry and then you find out about four months later that there’s massive creaking on one of the floors or that something by design has gone wrong that you didn’t pick up in that period after paying a deposit and a settlement.
Paul: Usually when you buy off the plan when I am acting for a purchaser I require a vendor warranty provision so that there’s a. Look when you’re buying something new half the stuff don’t show up. They don’t show up until you open the door half a dozen times and the hinge falls off. So that there is usually a three month warranty period where the vendor themselves are required to repair any defect or whatever. There’s that. There is also remember the Home Owners Warranty. Well there isn’t actually insofar as high rise.
Chris: Does it have to be only three months can you not go twelve months.
Paul: No the warranty provisions contained in the contract are usually three months. You could argue but I have never seen anything more.
Chris: But you could say to the developer or the owner Hey listen I want twelve months.
Paul: Oh yeh you can its negotiation.
Chris: If defects turn up in twelve months.
Chris: It’s worth doing because people don’t realise and I have bought off plan and I have discovered like ten months later something that was out of whack.
Paul: There is also remember the not home owners warranty but builder’s warranty or the general warranty regarding structural repairs and the so like. Now I now those time limitations have now all be altered they have been reduced down. I think its twelve months for general defects and probably only a couple of years for structural. Whereas it used to be six years.
Chris: Alright I want to take one final call. John on line 6. John about a Will go ahead.
John: Yes look Paul I am just wondering I may have been made executor of a Will my father-in-law’s Will and he is on his last legs. He is in his 90s. He at the moment has transferred everything to his wife. Now when that happens and she has to make a new Will he has got a daughter can she come at that Will.
Paul: Hold on sorry so the father has transferred everything across to his wife and you’re worried about the daughter making a claim against the father’s Will.
John: Yeh that’s right because she hasn’t seen him for about 20 years.
Paul: Okay. If there are no assets left in his name there is no reason to have a Grant of Probate made. So there’s no assets on the face of it there’s nothing to fight about. There is the concept of notional estate. Notional estate says that if you or what it means is that if you disposed of anything now I don’t have my notes in front of me. I think it’s about 4 years or something before you die and it wasn’t for valuable consideration then she could bring it back in. But when you dispose to a spouse um I don’t think a Court will consider that as disposing of assets because remember if he didn’t have Will the principle beneficiary would be the wife in any event.
John: Fair enough alright.
Paul: But you can’t stop someone from making a claim. I mean that’s what people keep saying to me “oh look if I give you know “x” dollars can I stop them from making a claim” No. She’s the daughter she is an entitled beneficiary she can make the claim. Question is well what’s there to divide then she has got the other hurdle of she’s got to find the assets prove that they fall within the notional state and make a claim.
Chris: You’ve got the $100 Westfield voucher by the way.
John: Oh thanks.
Chris: Good little open question which probably has you know tentacles for just about every person listening because at one stage in their lives they may have to go through that process. So a $100 Westfield voucher for you. Thank you stay there don’t go anywhere and Paul Sant thank you for your time this afternoon.
Paul: Thanks Chris.
Chris; From Turner Freeman.