Successful Council Negotiations

Happy to have assisted another small developer who has tried to dip its toes into property development by making an application to Council for a duplex development with granny flats at the rear of each proposed dwelling.

Council initially resisted the application, because whilst the development was permissible in the R2 residential zone, the building of the duplex and granny flats all at the same time (and before subdivision) now categorised the development as multi dwelling housing which became prohibited in the zone.

Proceedings were commenced in the Land & Environment Court, and Council insisted that the duplex had to be constructed and have a Final Occupation Certificate issued before the granny flats could be built, which would have made the construction of the granny flats in such a confined space difficult and prohibitive.

Thankfully, as part of the court process, Council were persuaded to issue a staged development consent where the duplexes and granny flats would be built at the same time, but the granny flats not finally completed (i.e. the kitchen still to be installed), which got the client over the permissibility argument and allowed a development consent to be issued.

A difficult case for a small-time developer, but a very pleasing result in the end.

We look forward to seeing the final product once it is finished.

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Appeal Upheld

Pleased to have assisted our client in obtaining approval through the Land & Environment Court for a boarding house development in Belmore Road Randwick under the Affordable Housing SEPP.

The application was originally refused by Randwick Council.

As can be seen from the judgment, the issues that had to be overcome included maintaining a heritage façade, parking, overshadowing, accessibility, height, scale and character, all on a very narrow and constrained site.

We worked through the issues with Council in the court process to achieve an excellent outcome for the client and a development that will sit well in its location.

It was a great result for the client and I look forward to seeing the quality finished product once it is constructed.

You can find the full judgement here.

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More Relief for Commercial Leases Impacted by Lockdowns

On 13 August 2021, amendments to Retail and Other Commercial Leases (COVID-19) Regulation 2021 and Conveyancing (General) Regulation 2018 came into effect. These amendments extended and expanded protections for parties to commercial leases impacted by lockdowns.

Most notably, the new expiry date for these protections is 13 January 2022. Along with this extension of the relief period, a number of further protections have been instated for both lessees and lessors. We’ve summarised these below.

Does This Apply to Me?

These regulations apply to commercial leases where the lessee:

  1. Qualifies for one or more of
    • 2021 COVID-19 Micro-business Grant
    • 2021 COVID-19 Business Grant
    • 2021 JobSaver Payment
  2. Had less than $50 million (including internet sales) of turnover in the 2020–2021 financial year.

If the lessee satisfies both of these criteria, then they qualify as an ‘impacted lessee’ for the purposes of these regulations and the following applies to you.

Your Obligations as a Lessor

If the lessee is an impacted lessee, then you must not increase their rent until the proscribed period expires.

Also, you must not take action against the impacted lessee for a breach without first going through mediation or renegotiating the lease with the lessee (unless the impacted lessee agrees to the action being taken).

Should any party request to renegotiate the terms of the lease, those negotiations must commence within 14 days of the request (unless both parties agree on an alternative period). All negotiation must be done in good faith, with consideration given to the economic impacts of the pandemic on the parties involved.

Lastly, any actions required by law do not constitute a breach of the lease and may not be used as grounds for action against an impacted lessee.

Your Obligations as an Impacted Lessee

You have to inform the lessor of your impacted status. This includes a statement to the effect that you are impacted and evidence to demonstrate that you qualify under the criteria outlined above.

If the lessor requests this information, you must provide it within a reasonable timeframe. You can also volunteer this information to the lessor at any time before a supposed breach, or as soon as you can afterwards.

Remember that during renegotiations, the requirements of good faith, commencement within 14 days of a request, and consideration of economic impacts also apply to you as the lessee.

Lastly, your lessor may still take action against you on grounds unrelated to the economic impacts of the pandemic.

Resources

You can find the current (at time of posting) version of the Retail and Other Commercial Leases (COVID-19) Regulation 2021 on the Legislation NSW website here.

For advice that is more specific to your situation, we would be happy to take your call.

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Appeal Upheld

Very pleased to have assisted our client in obtaining approval through the Land & Environment Court to increase the capacity of the childcare facility from 24 children to 45 children after commencing proceedings against Penrith City Council who originally refused the proposal.

It was a great outcome for the client who is a family operator, runs a great child care centre, and is extremely pleased at being able to offer an increased child care capacity to that area.

The full decision can be found here.

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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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