Q & A on 2GB discussing Property Law 20/05/14

Tuesday 20 May, 2014

********************

CS – Chris Smith/PS – Paul Sant/C1,2,3,4 – Callers

********************

CS       Yes Paul Sant from Turner Freeman Lawyers our good sponsors on this segment is putting on his property law hat this afternoon and quite happy to take your questions, but he won’t be here forever, the best advice is to jump in early in these sorts of segments because towards the end for some reason people tend to sit in a queue and can sometimes miss out, Paul a very good afternoon to you.

PS       Good afternoon Chris

CS       Now I guess I get to the story of the day before we go anywhere, bush fire victims have launched a $200 million lawsuit against a New South Wales energy company for allegedly failing to follow up a tree trimming order, now they should have done it in July as I understand it, we had the fires in October and we had 200 homes destroyed and 200 were damaged. This is going to one hefty payout if they are successful.

PS       Definitely they are talking $200 mil or something

CS       Have you noticed any precedent in this field before, have they got anything to rely on in terms of that

PS       The case that comes to mind is an old Parramatta City Council case, mate you are really taxing my memory, but I remember it, I’m sure in was in the 80s, were an elderly gentleman would go to Parramatta Council, and went on a number of occasions to complain about an over grown property which was next door. He had difficulty speaking English, he made a number of attempts, spoke to a number of people, Council did nothing and I think it might have been Council land, it caught fire, set fire to his place, he sued and won.

CS       And won!

PS       Yeah and that was a landmark case, because up until then with Councils in particular we had this distinction of nonfeasance and misfeasance and everyone thought that if Council’s do nothing they can’t be sued but if they do something badly they could be sued.

CS       This blaze, the blaze we have reported on in October and the world has known about, is alleged to have started after a tree at a private property on Linksview Road, Springwood fell in windy conditions on October 17, it struck a power line which sparked a fire that quickly grew out of control, now lawyers claim the tree was identified by Endeavour Energy inspectors as hazardous in July and a notice served on the property owner ordering them to trim the tree or make it safe. No action was taken it’s alleged and lawyers claim State owned Endeavour Energy is liable because it had the ultimate responsibility to ensure that the order was complied with.

PS       It comes down to the question of foreseeability, with such a risk foreseeable, by the sound of it, it was.

CS       Yeah they’ve got a pretty good case. A $200 million lawsuit. Jean’s got a question for you Paul, go ahead Jean

C1       Hi good afternoon guys

CS/PSGood afternoon

C1       You know when you buy a house and you sell it in under a year you pay capital gains.

PS       No if you sell it within the year, any profit I believe is deemed to be income, capital gains I think. It depends on what, sorry are you buying an investment property? or a property in which you live in?

C1       No sorry I’ve mislead you with that. Someone has built a granny flat at the back of their property and now their selling all the property. Does the same thing apply to the granny flat? Does it have to be there for a year?

PS       That’s a question of improvement. And I’m not a tax lawyer. I’ll be honest.

C1       Ok

PS       I don’t think so, but I’m not 100% sure.

CS       There always has been a law though, in terms of tax law that if you sell a property within 12 months, lets take away this granny flat scenario, but if you sell a property within 12 months you are liable to pay a hefty amount of tax on the difference.

PS       On the profit, I think the basis is this, that if you sell within 12 months, now remember 12 months is from the time you exchange, not the time from when you settle, it’s the time from when you exchange contracts to purchase to the time you exchange contracts to sell. If you sell within 12 months that profit is deemed to be income and then just simply added onto your income and you get taxed accordingly.

CS       So if you’re being taxed at almost 50% you’ll pay 50% of that difference.

PS       Correct, whereas if you waited for 1 year and 1 day, then if you’ve lived in it, then there is no tax on any profit.

CS       Ok so let’s add the granny flat to the situation but still they have only had the property for less than 12 months Jean?

C1       No they’ve had that, but then like 2 months after that they put in the granny flat.

PS       Yeah I think the granny flat may very well be deemed to be an improvement, because that’s like improving your house. Let’s say you had a bathroom and then sell it, what are you saying that maybe the tax man can say well I’m going to charge you tax on the cost of your bathroom. A bit difficult.

C1       Yep

PS       And the other point of course is how do you work out the increase in value of the granny flat unless the prices are portioned.

CS       Yeah that’s a tough one and probably best dealt with by a tax accountant for starters. Zara go ahead, Paul is listening

C2       Thank you, my neighbour actually put an application to build a garage and in that application, they are going to rip off half of the shed fence, which was the garage wall and they are coming towards my property like a bit of paving, slab and camellia tree and the side door of my property will go. So I put an objection to Council, but still they agreed with that neighbour and they’ve given approval, it there anything I can do?

PS       Sorry I just didn’t quite understand that, the neighbour has filed an application to build a garage,

C2       Yes

PS       And how does it affect you?

C2       The garage wall, wall of the garage will be forming, replacing the shared fence.

PS       In other words, he has been allowed to build it right on the boundary?

C2       Yeah, right on the fence and also coming a little bit further in my property.

PS       They can’t give him permission to encroach on your land.

C2       Right, the Council has done it, I don’t know what to do know, where I can go to get help.

PS       An application can lay in the Land & Environment Court, if you’d like to give me a call later on, I’ll talk to you further and we might be able to do something for you.

CS       Yeah will get your number, but Zara have you been in direct contact with the Council.

C2       Yes I put my application. I lodge it and then yesterday there was a letter that they have actually approved the neighbours application and they said within 5 days of this letter there will be something in the website which I can find out about it, in general.

PS       They can’t approve a development on your land.

C2       Yes

PS        Now to allow a development up to the boundary, I can understand that, some garages are allowed provided they don’t have windows and privacy issues. But they can’t, they’ve got no power to give authority or consent for someone to build your land.

CS       And what Council’s do on a regular basis is open their doors through the week so you can go in talk about the development and building issues and look at the plans. You should be able to do that Zara.

C2       Well I’ve spoken to a certain officer, but she said I don’t know if you have an application, you have to put the compliant in the application and that’s all she said to me, she couldn’t help me.

PS       This actually sounds like what you might find, is that your fence isn’t on the boundary line, and that often happens. When they do there survey you find that the boundary is actually one foot in your property or something.

CS       Yeah, I’d be going back in there and asking for someone else to deal with it Zara on the other hand I’ll put you through to Bridget who will take your number and Paul will try and navigate you through what could be a little bit of a messy situation. I think we are not hearing the full storey which is always the case sometimes. 131873 is the telephone number we are talking property law, free legal advice, Paul Sant happy to take your calls and we will continue you that straight after the news at 1 o’clock.

You’re listening to the Chris Smith afternoon show right across Australia

CS       This is the afternoon programme, we a smack bang in the middle of our property law segment this afternoon and a chance for you to have your questions answered on any aspect of property law, Paul Sant in the studio from Turner Freeman Lawyers, I want to go to some callers who’ve got some really good questions that may have some relevance to those listening this afternoon, Corrina go ahead, Paul is listening

C3       Hi I’ve got an issue with a neighbour and a retaining wall which has a colour bond fence sits above it. This is like an existing wall before we moved into the property just over 12 months ago. Now the issue that we have is that this retaining wall and colour bond fence is actually collapsing and is leaning on our pergola and it’s, from what we can see, the original surveys we had done when we purchased the property cause we have been, we were aware of this issue and we have been trying to resolve it with the neighbour and now we went to Council to report it. From what we can tell it’s actually encroached onto our land and when I had Council look into they conducted their own survey and they basically said to me verbally, well we’re not really sure if it’s on the boundary or if it’s on their property or where this originated, because we can’t get to the base of the retaining wall because the neighbours put like about 1.8 meters of soil to basically level out his front yard and that’s what’s pushed it over, cause there wasn’t a retaining wall built for that purpose and now they basically the Council sent a letter saying well how are we going to solve it, we are going to serve orders on both property’s to fix it and I’m kind of thinking well why am I being responsible for fixing a retaining wall that I haven’t damaged and now is actually encroaching on my property and leaning on my property, so I’m you know kind of like well where do I go from here to sort this out because it’s going to be a really expensive exercise to fix.

PS       Good point. Firstly this question about dumping 1.8 meters worth of soil on your land. You’re not allowed to change your, let’s say the natural feature of your property. And if you do so and that creates a problem then you are at risk, certainly under the law of nuisance, now 1.8 meters, my understanding is if you do anything to a property increasing the height by more than about 900 you must have Council permission. So there is point 1, did he get permission to dump the soil and there.

C3       Well when I spoke to Council about that and they said they don’t have any record of it but they don’t seem to really care.

PS       Well that’s one I think you need to further investigate and if Council is not giving you answers or not doing what they are suppose to do, there is avenues for complaint, I think, Councils you can make an application to the Ombudsman

C3       Ok

PS       That they are not pursuing their obligations properly, that certainly one point, the question about where the boundary is, it’s true you can get different surveyors saying different things, but if there is a dispute your ultimate application would be, you can make an application to LPI New South Wales which is the old Lands Titles Office

C3       Ok

PS       And they can determine where the boundary is. And then once you’ve determined that you could, there is an application I suppose, if the neighbour still creates a problem, an application to the Local Court under the Dividing Fences Act, and I think even the Land & Environment Court can make an order that the fence gets put back on the boundary and make appropriate orders for costs and things.

C3       Ok, so you would suggest

PS       I’d have another talk to Council and if you’re not getting anywhere I think you’d better talk to the Ombudsman and perhaps the boundary issue needs to be determined reasonably quickly as well.

C3       Yes Ok

CS       Good on you Corrina, thank you very much for your call, 131873 is the telephone number. Vivek has a pretty straight forward question which requires a straight forward answer, Vivek hi

C4       Hello Chris how are you

CS       Very well, Paul is listening

C4       Hi Paul how are you

PS       Good thank you

C4       Paul I just have a simple question, my uncle and auntie they have a property in joint names.

PS       Yep

C4       So my uncle died about 1½ months ago.

PS       Yes

C4       He already had a Will for auntie, and now she wants to transfer the property under her name. So where to go from here.

PS       Well if they own the property as joint tenants, the aunt can made an application by filling out a form called a Notice of Death, that gets sent to the LPI and the ownership will vest in her absolutely. If they hold it as tenants in common, an application has to be made for a grant of probate, pursuant to your uncle’s Will and then the executor once he or she has a grant of probate can transfer the property to your aunt, assuming your aunt is the beneficiary of the Estate.

C4       Ok so she only has to make application to Lands, which department?

PS       LPI New South Wales

C4       LPI

PS       Land and Property Information, but again with something like this, you should consult a solicitor.

C4       Ok, thank you

CS       131873 the telephone number. Back to neighbours and Marie has a question, go ahead Marie

C5       Hi, look we’ve got neighbours who had one house. Now someone else bought it and they want to put a duplex on it. Our back yard will be, it’s going to be like 2 double storey duplex

PS       It’s going to be

C5       I don’t know, apparently the Council sent us a letter which we’ve never received. We heard rumours from the neighbours, you know here and there and we asked the person concerned next door and he said yeah I’m building in about 2 months.

PS       So it’s been approved.

C5       It’s been approved, what can we do about it now.

PS       How long was it approved, how long ago.

C5       Apparently it was approved back in March.

PS       Have you gone to Council to see the terms of the approvals.

C5       We have gone, there is going to be a lot of windows. It’s going to be very invasive to our privacy and like we set a meeting with them which we are going to see them, I think in the next couple of days.

PS       A meeting with you, Council?

C5       With the Council, yes

PS       See how that develops, but by the sound of it, look Council is obliged to advise the neighbours of the proposals. They say they have done it, assuming they’ve got letters giving you the appropriate notice, they have considered the application, they’ve made a determination, your only alternative would be an application to the Land & Environment Court. But there are, I think there are limitations as to when, as to what your time period is from the time of the approval.

CS       Ok let’s leave Marie there, I think that basic reply is probably suffice at this stage, another quick one Greg go ahead

C6       Good after Chris and Paul

CS       Hi

PS       Greg

C6       Our family have a unit at Manly which we would like to sell. It’s in my mother’s name, she is 94 and in a nursing home and my sister and I both have power of attorney. Is there any problem with us selling the property? The reason we want to do it is the building is getting old and we’ve had it for 40 odd years and there is a possibility of a developer, wanting to buy the whole block.

PS       Now assuming that the power of attorney is an enduring power of attorney? Or that Mum still has capacity, if it’s not an enduring power of attorney, you need to register the power of attorney

C6       It was registered, by a solicitor

PS       Then you are able, unless there are limitations on that power of attorney that I’m not aware of, you’d be able to use that power of attorney to sell the property, but you can’t use the power of attorney for example to sell it to yourselves. You have to sell it to a third party, arms length transaction.

C6       Or if it was to be the home for my sister, once it’s redeveloped etc, can that be done?

PS       To buy it back

C6       Rather than wait until my Mum passes, there is a developer interested in the building.

PS       If you sell it to a developer holus bolus, and then you buy 1 unit back, well that’s one thing, but there are restrictions, well you can’t use a power of attorney to obtain a benefit for yourself. The power of attorney has to be used for the benefit of the person who made the appointment.

CS       Which is fairly straight forward, Greg, I’ll leave you there, Graham you have been waiting patiently go ahead

C7       Yeah g’day guys, I was just curious Paul about one of things you said a minute ago about if there is a debt on a property, in my situation my father passed away 5 years ago and he left a property to myself and my 2 brothers as tenants in common

PS       Yep

C7       He made me the trustee, there is a debt on that farm to me on that property $46,000.00. Do I, can I, I think one of the things you said, you go through probate, once you go through probate and I could have this 100% wrong, so please forgive me, that the trustee can then give the property and settle the debt, I’m the trustee, are you saying that as a trustee I can sell the property and pay myself and distribute the rest.

PS       If it’s a valid debt, if it’s an established debt, it can be proved or written and you’ve got evidence, then you’ve got an obligation to pay the debts of the estate first.

C7       So that means I can sell the place, pay myself

PS       Pay yourself debt and then distribute the balance, that’s the whole mechanism of dealing with an estate.

C7       Oh well thank you very much for that because people have been telling me I can’t do that. I can actually do, I can actually sell the property to settle the debt which has been documented for years

PS       Unless, if there is another alternative, let’s assume there is $46,000 in a bank account or something, you can use that bank account to settle the debt and than transfer the property into the ownership of the beneficiaries.

C7       Yeah, unfortunately there’s not because my parents died, without, they only had a property and everything else. Alright thank you very much Paul I really appreciate it

PS       Not a problem Graham

CS       Good on you Graham, thank you so much I won’t be able to get to any more calls unfortunately, we’ve run out of time, but Paul thank you very much for answering those to the best of your ability and we will follow up on a couple of those queries and maybe you can help people off air

PS       Not a problem

CS       Well done, thank you, Paul Sant property law on the agenda today and some interesting topics that no doubt have some residence with other listeners who weren’t necessarily calling in for advice.