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Home | Paul Sant providing Q & A on the 2GB Chris Smith Afternoon Show discussing issues in relation to Property Law 18/04/13

Thursday, 18 April 2013

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CS       Turner Freeman, good sponsors of this radio station, have their legal segment on each and every Thursday.  We cover various aspects of law as those who’ve heard this segment before would understand.  Today we’re going to talk about property law.  Now this is a fabulous opportunity to have your questions answered on the radio immediately.  We can’t sit here and listen to the life history associated with any kind of drama you may have so keep it short but, by all means, jump on the open line right now 131873.  Don’t leave it too long, you’ll miss the boat 131873 and from Turner Freeman this afternoon, I welcome Paul Sant.  Paul, thank you for coming in.

PS       Thanks Chris.

CS       Just got out in out of the rain, just in time.

PS       Just.

CS       Just in time, which is fantastic.  We’ll get to callers in just a second 131873 is the telephone number but we’ve got some changes to various aspects of property law that some of which I’ve been aware of but some of which I have not been aware of and we had a discussion about this during the news.  Tell me what’s happening in New South Wales in reference to Title Deeds.

PS       New South Wales has adopted the Electronic Conveyancing National Law Act.  Now basically what that means is they’re going to have…they’re going to do away with actual physical documents and we will not have Title Deeds anymore.

CS       Is this a little bit of a concern because I know, in times gone past, you’d have your title deeds either with your lawyer or in a safe somewhere or maybe held by your own bank so from now on, you don’t have to worry about that.

PS       Not from now on…soon enough, they will not have those title deeds.  It will be some electronic register and there will be methods for third parties who have interests in properties to register their interest.  Chris, by the way, Queensland abolished title deeds well, it’s got to be nay on about 8-10 years ago perhaps.

CS       That doesn’t necessarily mean it was a good thing.

PS       No, I tend to agree with you.  I’m a bit old-fashioned myself and I was a bit worried then and I’m a bit concerned now.

CS       Well, you’ve got to have a hell of a lot of trust in computer systems and programming, don’t you?

PS       100% and they sometimes fail.

CS       Ok, we’ll see how that pans out.

PS       It’ll be very interesting.

CS       Now, in terms of swimming pools, there are some significant changes coming up from next year which the current NSW Government have introduced.  Tell us about what that means.

PS       Well, firstly, if you have a swimming pool, supposedly by the end of this month, you’re going to be able to register those pools with the Council and I think they all have to be registered by October this year but from April next year, if you sell a property with a swimming pool, you are required to attach a compliance certificate, particularly in relation…that the pool complies with the fencing.

CS       So you’re not safe…just by registering your pool doesn’t make it safe.  You end up having to get a compliance certificate.

PS       You’re required to attach a certificate.

CS       And the compliance officer would come from Council would they?

PS       I believe so.  I’m assuming there’s going to be third parties who are able to provide the certificate but, at this stage, I believe it is Council because Council are entitled to…will be entitled to inspect your property and confirm compliance.

CS       Alright so, finally, and I actually think this is, in part, quite a good thing.  You actually have pools that to have them existing as they are, they have to be checked for safety measures etc and fences and proper locks which I think is highly important.

PS       Yeah.

CS       Yeah.  131873 is the telephone number.  If you’ve got questions about those or any other property law 131873.  Paul Sant from Turner Freeman, sponsors of the programme will take your calls.  How about we start with Jeff who’s on line 5.  If you want to grab those headphones Paul and throw them on and we’re ready to go.  Go ahead Jeff.

C1       Hi Paul, how are you?

PS       Good thank you.

C1       Hi mate, a very quick question.  I purchased a townhouse property off the plan.  The developer has only wired the property for NBN and we know what’s all happening with the NBN.  We tried to get a Telstra connection.  Telstra will not be given permission by the NBN to run the conduit for their line…the NBN conduit.  Therefore, it seems to be a responsibility I think of the developer to run now conduit for Telstra to give us an ADSL connection.  We only found this out after we moved into the property so since we’ve been in there, we have no telecommunications connection.  I just wonder what and who’s responsible?

CS       Well I think that it’s the other way around isn’t it Paul, that the NBN don’t have access to any of Telstra’s conduits.

PS       I think that’s right.

CS       I think that’s the way it works but anyway they are separate that’s the point.

C1       Yeah, I mean the NBN conduit is there but they will not allow the Telstra to run their cable through their conduit.

PS       It depends upon what the terms were of the contract.  One has to go back to that contract pursuant to which you’ve bought.  Have a look at the services that the developer was supposed to provide and that’s where, then, may have rights as against the developer if he’s breached those terms of the contract.

C1       Ok, so…I mean, I am of the understanding that they were supposed to have supplied the activity.  It’s ironic that it’s in one part of the complex but not in another part of the complex and we’re now discovering little porky pies that are coming out of the developer and also the agent who sold us the property.

PS       You’re not the only one.  I get this problem quite often.

CS       Well there’s a good question off the back of what Jeff’s saying.  If you’ve got a problem with off-the-plan building and you’re moving in and you’re finding problems with that and you’re looking back on contracts as you say which is the first port of call, after that, what action can you take and how do you go about taking action against the developer who won’t give you what you think you are promised in the first place?

PS       As far as the developer’s concerned, there’s privity of contract.  So you’ve got a contract with the developer.  One has to look at the terms, see what he promised that he would provide, whether that’s in it or not then you’ve got recourse to the normal courts if he’s failed to provide things that he is contracted to provide.  Remember with off-the-plan, most people are buying as part of a strata complex.  Now a lot of the rights that you have then vest into the Owners’ Corporation so a lot of these disputes you may have and probably telecommunications is one, a lot of the power would vest in the Owners’ Corporation so it’s then in the Owner’s Corporation can then move either against the developer or make claims with the Department of Fair Trading, the various avenues that are available.

CS       There are pitfalls with buying off the plan.  What are the things…once you start looking at a complex maybe in one of those suites that they have, the display suites and you’re really wrapped in what’s going to be built down the track and you think to yourself, gee I can afford that.  Especially now that it’s not being built for 18 months from now and I’m due for a rise surely next year and so you take the risk on something that hasn’t even been built, what are the things you’ve got to look for at that stage?

PS       Numerous pitfalls in buying off the plan and that’s where you need someone that’s got the experience in these type of areas.  Someone described buying a property off the plan is like buying a piece of art that’s in the process of being completed.  You’ve got no idea what it’s going to be like until it’s finished and that’s the reality of buying off the plan.  You’ve got a display home, you think, that’s what I’m getting.  When you read the contract, the developer has got every possible clause in there that he can change everything.  He can change location, direction, put a pier in front of your main window, relocate…it’s just incredible.  And then our role is try to limit what the developer can alter to ensure that you get what you hope to get, what you think you’re getting and there’s a whole bunch of pitfalls because you just can’t physically see what’s been completed.  Finance – you’re buying a property, you don’t have to pay for it until two years time well then I’ll organise my finance in two years and then something happens.  You might have lost your job, can I on-sell it?  Some developers say you can’t on-sell.  Some set dates.  They sometimes say, well, you know, this will be ready by a certain date and if it’s not ready, the developer can pull the plug and say…oh well, date’s gone past, I’m entitled to rescind, I haven’t completed.  Here’s your deposit back but I’ll now resell it and make X dollars more.

CS       You’ve got to be super careful and probably talk to the experts about all of that sort of stuff before you set out.

PS       Definitely.

CS       Ok.  I’m with Paul Sant from Turner Freeman, sponsoring this segment this afternoon.  We’re talking property law.  We’ll take your calls right after this.

This is our legal matters segment sponsored by Turner Freeman.  Paul Sant from Turner Freeman is here to take your calls 131873 is the telephone number and plenty to get to.  From Warilla, Danny, go ahead, Paul is listening.

C2       How you going Paul?

PS       Good thank you.

C2       I was…do away with the deeds to your property…

CS       Yeah, title deeds, go ahead yeah.

C2       Yeah, and it dips into the electronic world, the computer world and a computer wiz comes along and hacks all into it and all of a sudden you don’t own your property.  How do you deal with that sort of thing?

CS       Yeah, this is exactly what Paul was concerned about.

PS       Title ownership is guaranteed in New South Wales so, if something happens by way of fraud, you are always entitled to seek compensation and get reimbursed.

CS       What a hassle though.

PS       Yes, it’s a hassle.  Look, I’m the old fashioned style sorry.  I haven’t quite got my head around this but let me say to you.  I mean, they started talking about this ’09/’10.  They’ve had various start dates, it’s been put off.  I think the last I heard…I mean the last discussion or the last paper that came out from Land Titles was about October ’12.  I actually heard that they’ve put it off for another year so there’s a lot more work to be done.

CS       But it’s going to come though.  There’s nothing wrong with a bit of hard copy.  There’s nothing wrong with a bit of hard copy…131873 Matt has an interesting story to tell us about a granny flat that’s been built.  Matt go ahead.

C3       How ya going?

CS       We’re well.

C3       That’s good.  This happened about five years ago.  The house was finished.  The story goes…we built a house behind my mother-in-law’s house.  It was on an acre and a half.  The architect design…it’s more than a granny flat, it’s actually a building.  It was approved by Council, it was all built, nearly finished and then the builder went bankrupt so we had a few little things but that isn’t the problem.  The problem was, six months after, a neighbour applied to Council to do the same thing and Council denied it and said…what we had done was illegal because the house was land-joined, they were separate.  And the reason the Council came to us and told us and said, your dwelling’s illegal, you have to build a patio to join the two houses together, at your cost.  Well, the patio’s a different story but the patio wasn’t finished by the patio mob.

CS       So are you suggesting the builder that built your granny flat didn’t get appropriate approval

C3       No, no.  Approval was approved by Council.  It was all legit, everything was fine.

PS       And he complied with the terms and conditions of the approval?

C3       Sorry?

PS       The builder complied with the terms of conditions of the approval?  The DA conditions.

C3       100% Council approval.  The Council in the time the house was finished being built to the time when the neighbours applied to have the same thing done, the Council changed hands, the Council changed and the new Council said it was illegal but the old Council said it was fine.

CS       These things can’t be retrospective.

PS       No they’re not.  They can’t be.  Because you could have something zoned for one use and then it gets rezoned but if I’ve got permission to use it for that under the old use, they can’t make me change it to comply with the new lease.

CS       You better get a good lawyer, Matt.

C3       Well that’s the thing, we’re just battlers and we were told.  Like I said, it was five years ago.  We were told that because it’s Council, you’ve got no hope of doing anything about it.

PS       Maybe give me a call next week or even tomorrow on our 1800 number and I’ll have a chat to you.

C3       Alright, that would be good.

CS       Alright Matt, stay there, we’ll put you through to Bridgette and get you that number if you’re interested 131873 is the telephone number.  Warren, hi.

C4       Oh, hi there.  I don’t know if you can help me Paul.  This is not my problem but a problem of a few friends of mine who bought a house and they pulled some panels off to do some renovating and discovered it was riddled with white ants and, even the main beams up into the ceiling, to the roof, it’s a basket case really.

CS       They didn’t get a pest inspection first up?

C4       Well, they were told that the seller had done that and it was also approved by the building inspector I believe.

CS       The seller had done that?

C4       Yeah, I think that’s the case, yeah.

CS       Right.

PS       That’s something new Chris.  More and more, we’re finding that the vendor is supplying the pest inspection report on the building.

CS       To make it easier for the buyer to jump to the bank.

PS       Correct.  Now there was talk.  The NSW Government looked at the regulations regarding conveyancing and actually talked about requiring the vendor to supply these things.

CS       It wouldn’t be a bad idea.

PS       They didn’t go ahead with it but the problem becomes this.  The contract is between the vendor and the report right.  I as a buyer, what rights to I have to rely on that contract?  I’m not part of that contract.

CS       So those people, Warren’s friends who bought it have now got to clean it up, clean the white ants out and they have no recourse to the person who wrote the report on the pest control.

PS       When you’ll read the terms and conditions of the report, the report is prepared purely for the benefit of the person who ordered it which is usually the vendor.

CS       Yeah, interesting.  Darren, go right ahead.

C5       Yeah, good afternoon Chris.

CS       Hi.

C5       Chris, my question is pretty much exactly what that last gentleman was talking about.  I’m looking at buying a new home as a first home owner and the question I wanted to know is, why doesn’t the responsibility of the building inspection report or a pest inspection fall onto that person who is wanting to sell their house.  Because we all know that I’m going to buy a house.  I put down my deposit and then when the building inspection or pest inspection comes back and there’s…it might say there’s termites in the front garden but they haven’t got to their house yet and I say, ok well I don’t want a house that’s got terminates.  Why is it that I still lose my deposit and not knowing that there were termites there before I was to put a deposit on their house.

PS       You lose your holding deposit during the cooling off period.  Look the Government looked at it and there were heaps of submissions about what should be included in contracts.  Now I remember the days when you bought a property, you got a survey.  Everyone used to have surveys.  You wouldn’t buy a property without it.  Now I can’t tell you the last time I was instructed to provide a survey or obtain a survey.  I think the biggest factor was the obligations on the vendor because remember years ago, the vendor didn’t have to put anything in the contract.  I remember then there was nothing in the contract and it was up to the purchaser to go get the zoning, the drainage, the searches.  That’s changed.  So the vendor now has to supply a contract with the zoning certificate, title search, drainage diagram and other prescribed documents.  I think their view is that we’ve done enough requiring the vendor to put things in the contract and incur the cost.  The rest is up to the purchaser.

CS       But I myself as a buyer, I would like to have the contact with the pest inspection so if there’s anything wrong with what I find with the house, I can go back to the pest inspector and say, we had a contract, you let me down.

PS       But you’ve got this issue of privity of contract.  You know, I pay for the contract, I’m the one that’s got the benefit of it.  Can I sign that benefit to someone else.  It’s something that will have to be looked at.

CS       Just before we let you go.  Common misunderstandings about deposits on homes.

PS       These days, it is quite often for people to ask to pay a 5% deposit instead of a 10% and everyone will say to you, well you don’t want to lose the buyer except the 5%.  What they don’t realise, what people aren’t being told is that if you accept a 5% deposit and for some reason the purchaser doesn’t proceed, you will only be entitled to retain that 5% deposit.  If you try and sue for the balance, even though there’s a beautiful clause in the contract which says that you’re entitled to the full 10%, the Court of Appeal in a Sovereign developments case held that that additional balance of the deposit is a penalty and therefore non-recoverable.  And from what I understand there have been many attempts to get over that decision, none of which have succeeded.

CS       So, not a bad warning for people when they’re selling to make sure that they get the 10% deposit, the full deposit because if you get 5%, the other 5% may not be available to you.

PS       100% correct.

CS       Alright, fantastic.  Thanks, you’ve been very informative as these segments always are and thank you very much for off the bat in a very ad-lib fashion taking those calls without notice.  Thank you Paul, much appreciated.

PS       Thank you Chris.

CS       Paul Sant from Turner Freeman, our legal matters segment sponsored by Turner Freeman.

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