Cessation Day is Coming

The NSW government is enacting reforms very soon that will transition the land titles system away from paper, becoming fully electronic. A major part of this reform is that from 11 October 2021, the Registrar-General will no longer be issuing Certificates of Title (CTs). Lodgement must also be made electronically. No paper dealings will be accepted past this date, or ‘cessation day.’

This means CTs will no longer be a legal document. With regard to proof of ownership, practically nothing will change. As the Office of the Registrar-General (RG) stresses, “The Torrens Title Register has always been and will continue to be the single source of truth as to the ownership of a person’s home.” However, don’t assume that you can lose or destroy your CT just yet. The RG outlines two reasons you might want to hold onto it even after 11 October:

  • If a transaction involving your land hasn’t been finalised before cessation day, the CT may still be required to satisfy requisitions or other administrative notices issued prior to that date.
  • Lawyers who rely on CT to establish a client’s right to deal in a transaction conducted before cessation day must retain that CT in line with the requirements for retaining supporting evidence.

Outside of those circumstances, CTs will be largely useless.

Paper dealings will also be phased out. This means lodgement must be made through a subscriber to an Electronic Lodgement Network, such as a lawyer or licenced conveyancer. With that said, it is recognised that certain dealings must be made outside of available eConveyancing systems for technical reasons. Don’t fret, there will be established rules to govern ‘out-of-scope transactions.’ However, these will be very much the exception and not the rule.

For more information, the RG’s website goes into all the changes summarised above. Alternatively, you could consult a lawyer or licenced conveyancer. We are more than happy to take your call!

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Don’t Be Put Out by Put Options

Have you secured the sale of your residential property with put and call options? A recent legal decision shows that sale may not be as secure as you think.

So, What Happened?

A potential purchaser of several residential properties entered into put and call option deeds with several vendors. When the purchaser failed to exercise their call option by a certain date, the vendors decided to exercise their put options. Thereby, the sales contracts attached to those options became binding and the purchaser would be required to make the purchase… At least, that’s what the vendors planned.

Instead, the purchaser rescinded all sales contracts and cited their right to a cooling off period under section 66S of the Conveyancing Act 1919. The vendors were left high and dry.

How could they rescind the contracts if they were made under put and call options? There’s no cooling off period for sales contracts made as a consequence of an option to purchase (section 66T(d) of the Conveyancing Act 1919).

The answer lies in the phrase ‘option to purchase.’ The judge ruled that this language did not include put options, which would be regarded as “options to sell” or “options to require someone else to purchase.”

Since the sales contracts were made binding by the exercising of put options, section 66T(d) didn’t apply. It followed that the purchaser did have a right to a cooling off period and they could rescind the sales contracts when they did.

The Takeaway Is Simple:

When entering into put and call options, make sure you get a section 66W certificate from your potential purchaser. This certificate waives the purchaser’s right to a cooling off period in the case that you exercise your put option.

Many developers consider put and call options to be just as good as a sales contract. This case, however, reveals the differences that could expose you to more risk than you bargained for. Don’t get caught out!

You can find the case of BP7 Pty Ltd v Gavancorp Pty Ltd here.

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Watch the Key Parts of The Developers Forum 2021

The night of March 31st at Rosehill Racecourse was spectacular, as The Developers Forum 2021 was a huge success. If you couldn’t make it this year, don’t fret! You can watch the highlights of the night right here.

The keynote address from our special guest speaker, NSW Building Commissioner David Chandler OAM, “Restoring Confidence and Trustworthiness in the Construction Industry.”

You can also watch the Q&A panel with Mr. Chandler below. Joining him are the founding partners of The Developers Forum: Michael Dakhoul (Construction Consultants), Sid Sfeir (Sfeir Accountants), and our Principal & Director Pierre Saab.

If you like what you’re seeing and you don’t want to miss information regarding the next event, we’d encourage you to follow The Developers Forum on Facebook, LinkedIn or Instagram to stay informed. We’d love to see you there!

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HBCF Construction Classification Updates

icare have updated what constitutes structural and non-structural work for the purposes of providing cover under the Home Building Compensation Fund.

Work is deemed structural if it involves a component that is essential to the stability of a building, or that is classified as a “major element” of the building under the Home Building Regulation 2014.

Additionally, work is deemed structural if it involves cladding, fire safety systems or waterproofing.

A more detailed breakdown, including examples of components that fall under the above classifications, can be found in a document released by icare here.

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Appeal Upheld

Thanks to the representation of Macquarie Lawyers, an appeal was successfully upheld in the NSW Land and Environmental Court to allow the construction of a new 15 room boarding house in Blacktown, and to reverse the decision of Blacktown Council to refuse the application.

The result is most pleasing for our client. The commissioner stated that “The development expands affordable rental housing to cater for the needs of lower income people.” She also noted the development’s encouragement of alternative methods of transportation, citing its proximity to public transport and bike storage.

A link to the full decision can be found here.

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Make Your New Years Resolution to Update Your Will

Anyone who’s written or pondered their will has probably reflected on how important it can be to those we leave behind. But, while we’re still around, our lives and circumstances are always changing. When was the last time you considered updating your will? Is what you wrote back then still applicable to your situation now?

Let’s go over some reasons you might want to revisit your last will and testament.

Marital Status

If you and your significant other have taken that big step together into marriage, you might want to think a little bit about how such a change is reflected in your will.

On the other hand, if your long-time relationship has ended, divorce or separation might also affect your final wishes.

Children & Grandchildren

The single greatest change to anyone’s life probably happens when a child enters the picture. Whether through birth, adoption or marriage, make sure you consider your children’s future when thinking about your will.

Children don’t stay young forever, though. Sometimes, they can outgrow the sentiments expressed in your will. For instance, you may have left instructions to hold your child’s inheritance in trust until they’re 18. Now that they’re in their 20’s, you might want to revisit that clause.

Speaking of children growing up, what if they’ve had children themselves? How are they reflected in your will?

Death of a Beneficiary

Just as people enter our lives, people unfortunately leave our lives as well. One of your beneficiaries may not be around to collect their inheritance any more. Whether you consider their estate, or remove them entirely, it’s time to update your will. 

Your Assets

Have you ever come home from work, sat down in your lovely house and thought, “I’ve come a long way from renting that 1-bedroom apartment all those years ago”? Have you started a business since then? Maybe you have a few investment properties. Have you bought a car? Sold your car?

How significantly have your assets changed since you last checked your will? It’s not just about gaining or losing assets either. Your assets themselves can change in value over time.

Social Media

Your online presence grows more important every day in this digital age. As such, you might want to think about how your digital assets are handled once you’re gone. Leaving login details and instructions regarding social media is becoming increasingly common.

You’ve Moved

Legal requirements regarding wills vary from state to state. If you’ve moved interstate, it’s a really good idea to consult an attorney to make sure your will is still valid. Especially so if you’ve moved overseas!

Changing Tax Laws

Tax laws change constantly and there’s a chance this could affect your final wishes. For this reason, it’s a good idea to consult an attorney and check your will regularly, even if you don’t think your circumstances have changed that much.

You’ve Just Changed Your Mind

Maybe you think to yourself one day, “My eldest isn’t the right one to take over the business.” One day, it might behove you to include a charity in your will. Whatever the reason may be – and however subtle that reason – it’s ok to change your mind regarding anything in your will.

That covers some of the biggest reasons, but those were just a few of many. It’s generally a good idea to at least look at your will once a year. Some people do this around the end of the financial year, rolling their yearly check into their regular tax time preparations.

If you’re thinking about updating your will, or writing one for the first time, we’re happy to take your call. Macquarie Lawyers has extensive experience advising clients on all matters regarding their last will and testament. Either way, as your life and circumstances change, stay safe and be well.

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The Developers Forum – Save the Date!

Save the date! The Developers Forum is starting up again next year with an event on 31st March, 2021 with a special guest speaker: Mr. David Chandler, the Building Commissioner for NSW!

The Developers Forum was created to give small to medium sized developers and builders access to a community forum that includes important industry and professional services information. Macquarie Lawyers is proud to be a founding partner of The Developers Forum.

Find out more about The Developers Forum here!

Don’t miss out!

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Building Contractors Beware!

Are you making valid payment claims?

For your tax invoice to be valid as a payment claim, it must:

  • Indicate the amount of the progress payment you are claiming,
  • Identify and sufficiently describe the construction work (or related goods/services) to which the payment relates,
  • Be served to the other party to the contract,
  • (for contracts entered into before 21 October 2019) Be issued after a “Reference Date,” and
  • Have an accompanying Supporting Statement if the claim is to be served by a Head Contract under a Main Contract.

What’s a Supporting Statement, though?

If you’re a head contractor serving a payment claim to a principal, you must include a Supporting Statement. This is a statement that declares that all subcontractors and suppliers you’ve engaged with directly (if any) have been paid all amounts due and payable relevant to the contract, including retention amounts. These amounts do not include any amounts that may be in dispute between you and your subcontractors, but those amounts must be separately identified.

Your Supporting Statement has to be true at time of signing and in the proper form (prescribed by the Building and Construction Industry Security of Payment Regulation 2008).

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Beware Email Fraud!

Scammers are increasingly targeting law practices, posing as clients or beneficiaries via email to divert payment of funds away from you.

This is why we will always confirm account details over the phone before any fund transfer is processed. This is the best defence against this type of scam.

On top of this, we also consistently:

  • Request clients update or confirm telephone numbers held on file (scammers will often send fake phone numbers and avoid confirming details over the phone).
  • Warn clients about email fraud and make sure they know that our firm will NEVER advise of changes to account details via email.

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