Retail Leases

From 1st July 2017, there have been some significant changes to the Retail Leases Act in place.

You can find a brief summary of the significant changes below:

  • No minimum term
    – The 5 year minimum has been removed.
    – This provides flexibility in determining the length of retail leases.
    – This also reduces the red tape for Landlords and Tenants.
    – Section 16 (3) Certificate (Solicitor Certificate for Retail Leases of less than 5 years) has been removed.
     
  • Disclosure of outgoings
    The Tenant is no longer liable for outgoings which are not fully disclosed in the Lessor’s Disclosure Statement.

    If the estimate in the Lessor’s Disclosure Statement is less than the actual amount then the Tenant is only required to pay the estimated amount.

    Close attention should be paid to the Lessor’s Disclosure Statement.
     
  • Mandatory Registration
    Registration of Retail Leases of 3 years or more is now mandatory.

    The Retail Lease must be registered within 3 months after Retail Lease signed by Tenant is returned to the Landlord.

    This 3 month period can be extended due to mortgagee delay.

    If the Retail Lease is not registered and the mortgagee takes possession of the property and did not consent to the Retail Lease, then the mortgagee does not have to recognise the Retail Lease. The Tenant is such as instance would be unprotected.

    Registration is for the Tenant’s protection.
     
  • Return of Tenant’s Bank Guarantee
    Following termination of the Retail Lease, the Tenants Bank Guarantee is to be returned within 2 months after the Tenant has complied with all obligations under the Retail Lease.
     
  • No Mortgagee consent fees
    It is now expressly stated that a Landlord cannot charge Mortgagee consent fees.
     
  • Copy of Retail Lease
    The Tenant is to be provided with a copy of the Retail Lease within 3 months after it is returned to the Landlord.
     
  • Failure to provide Disclosure Statement
    If the Landlord fails to serve the Disclosure Statement within 7 days before the Retail Lease is entered into or if the Disclosure Statement is materially false, misleading or incomplete, then in addition to the Tenant being able to terminate the Retail Lease within the first 6 months, they also have a right to claim compensation including in connection with the fit out of the retail shop.
     
  • Lessors Disclosure Statement can be amended by Agreement or by NCAT
    The Lessor’s Disclosure Statement can be amended both before and after the Retail Lease is entered into by agreement or by NCAT.
     
  • New Schedule 1A
    This new schedule to the Retail Leases Act specifically excludes certain usages. These uses are not Retail uses under the Retail Leases Act:

    – ATMs
    – Vending Machines
    – Public Telephones
    – Children’s Rides
    – Signage Display
    – Internet Booths
    – Private Post-Boxes
    – Storage of goods for use in retail shops
    – Car Parking
    – Communication Towers
    – Digital Display Screens
    – Public Tables and Seating
    – Self-Storage Units and Storage Lockers
     
  • Act does apply to Agreement for Lease
    Accordingly, a Lessor’s Disclosure Statement needs to be served 7 days before Agreement to Retail Lease issued.
     
  • The Retail Leases Permanent Retail Markets
    Act now applies to permanent retail markets. Provided such a store also satisfies the definition of a retail shop.
     
  • Applies to proposed Lessees and Lessors
    A Landlord cannot charge legal fees under Heads of Agreement for a Retail Lease if the Tenant does not proceed.
     
  • Specialist Retail Valuers
    This process run by Office of the NSW Small Business Commissioner and not NCAT.
     
  • Retail Lease Assignment
    Streamline the process – easier and clearer process for assignment of Retail Leases.
     
  • Online Sales
    Are excluded from turnover data.

    Turnover data must be in relation to the “bricks and mortar” shop only.
     
  • NCAT
    Financial jurisdiction increased from $400,000.00 to $750,000.00.

    NCAT may amend Retail Lease or Disclosure Statement.

    NCAT may make order for compensation.
     
  • Demolition
    Demolition of a building and also a part of the building now included.
     
  • Rental Bond
    Online rental bond scheme to apply.
     

According to the Office of NSW Small Business Commissioner such changes were adopted to:
 

  • Better level the playing field between Landlords and Tenants.
     
  • Improve the sharing of information between Landlords and Tenants for example in relation to rent increases, assignment and demolition.
     
  • Refresh and update the legislation to coincide with the rapid change the Retail Industry has faced.

When do I need a Witness

Do you need a signature from a witness in order for a contract to be valid.

Most documents and contracts do not require a witness for them to be valid.  But wills and documents that need to be registered with NSWLRS (Land Registry Office) have legal requirements in relation to witnessing.

Who can be a witness to a document?

The person you choose to witness a document should have no financial or other interest in the document that is being signed. An independent adult (over 18 years old) witness who does not benefit from the document is the best solution.

Ideally a witness will observe the relevant party or parties signing the document and then the witness will sign the document as proof that they witnessed the parties signing. The witness is generally not required to know or understand the contents of the document.

It is also important that documents such as wills have clearly regulated requirements regarding the number of witnesses and the nature of the relationship between the parties and the witness. Most States in Australia will not allow witnesses that are mentioned in your will, either as beneficiary or executors. The witnesses must be of legal age (18) and they must be mentally capable of managing their property and making their own decisions.

Contact our office to get a clarification on witness protocol.

Introducing 2-year time limit on validity of Survey Certificates – Effective 1 September 2018

New legislation to ensure plans of survey contain current information

Legislation imposing a time limit on the validity of a Survey Certificate accompanying a plan of survey will commence on 1 September 2018.  The legislation will form part of the remake of the Conveyancing (General) Regulation 2018 (the Regulation).

The legislation will apply to a plan of survey (as defined by the Regulation) lodged on or after 1 September 2018. It will not apply to compiled plans or strata plans.

The cadastre is dynamic and regularly changing. A plan may no longer be current if there is a delay between completion and lodgment.  By ensuring a plan remains current, the legislation will result in fewer requisitions being issued by NSW LRS and will help to maintain the integrity of the cadastre. The new requirements will formalise and enhance the existing practice of requiring plans to be updated to include current information.

Time Limits – staged introduction

A plan of survey cannot be lodged with the Registrar General more than 2 years after the date of completion of the survey shown on the Survey Certificate unless it is accompanied by a Certificate of Currency attested to by the surveyor in the approved form.

The legislation will provide for a staged introduction to allow lodging parties to transition to the new requirements as follows:

  • For plans lodged on or after 1 September 2018 until 31 August 2019, the requirement will apply where the survey was completed more than 5 years prior to lodgment.
  • For plans lodged on or after 1 September 2019 until 31 August 2020, the requirement will apply where the survey was completed more than 3 years prior to lodgment.
  • For plans lodged on or after 1 September 2020, the requirement will apply where the survey was completed more than 2 years prior to lodgment.
Certificate of Currency

The approved form will be published on the NSW LRS website www.nswlrs.com.au on 1 September 2018. To assist lodging parties prepare for the new requirements, please find a copy of the approved form here. A surveyor must attest to each of the matters in order that the plan can be accepted for lodgment.

To fulfil these requirements, the surveyor will need to review the plan before lodgment to determine whether the plan needs to be updated and to make sure any consents from certifying authorities or other people are obtained.

The Certificate of Currency is an additional Certificate to be attested to by a surveyor.  The Survey Certificate accompanying the plan of survey does not require any further endorsement or alteration.

Lodging parties must ensure they comply with the new provision when lodging a plan of survey.

Stronger laws for off the plan purchasers

NSW home buyers purchasing residential properties off the plan will benefit from stronger protections under new laws set to be introduced to Parliament in the second half of the year.

Minister for Finance, Services and Property Victor Dominello joined Member for Oatley Mark Coure in Penshurst today to announce the proposed changes to the Conveyancing Act that affect disclosures, cooling off periods, holding of deposits and sunset clauses.

“Purchasing a property is one of the most significant financial investments an individual or couple will make in their lifetime. These reforms are a big win for buyers and will provide them with greater confidence and certainty,” Mr Dominello said.

“Buying off-the-plan has become increasingly popular. But there are risks involved and buyers can’t just rely on lavish display centres and glossy brochures.”

Mr Coure said: “The St George region is experiencing a housing boom and the new laws will help families make more informed decisions to ensure they get what they paid for.”

The reforms include:

    • Buyers being provided with a copy of the proposed plan, proposed by-laws and a schedule of finishes before contracts are signed;
    • Vendors providing a copy of the final plan (and notice of changes) at least 21 days before the buyer can be compelled to settle;
    • Allowing buyers to terminate the contract or claim compensation if they are materially impacted by changes made from what was disclosed;
    • Widening existing legislation to clarify that the Supreme Court can award damages where the vendor terminates under a sunset clause; and
    • Extending the cooling off period to 10 business days with any deposit to be held in a controlled account.

The number of off-the-plan sales has increased from just over 2,000 in 2006/07 to nearly 30,000 in the last financial year. They now account for about 12 per cent of all residential property sales in NSW. The reforms follow a public consultation. For more information visit www.registrargeneral.nsw.gov.au.

Difference between Strata Title and Community Title

What’s the difference between strata and community title?

Strata Title:

Town houses, units and some types of commercial property generally fall under these categories.

Each unit and common property comes from one large parcel incorporating property and land.

Each unit or allotment is given its own title as well as the common property (shared between all members of the group).

The difference is in the way in which the land boundaries are defined.

A Strata Title unit’s boundaries are defined by reference to parts of the building, not by the land. There must be an area of common property, for which everyone is responsible.

Community Title:

Similar to that of a Strata Title holding, Community Titles are defined by lot boundaries and surveyed measurements unlimited in height and depth, as well as reference to parts of the building.

Community Title Corporations are also appointed and comprise registered owners of the lots in the community scheme.

The Corporation is responsible for the administration of the group’s by-laws and for maintaining the common property and any fixtures on the property.

Apartment complexes generally fall into this category.

GST Payments changes from 1st July 2018

GST payments changes from 1st July 2018

From 1 July 2018, purchasers of new residential premises or potential residential land are required to withhold an amount of the contract price and pay this directly to us as part of the settlement process. The amount of GST will not change.

This does not affect the sales of existing residential properties or the sales of new or existing commercial properties.

For property transactions, purchasers will need to:

  • split the amount of GST from the total purchase price
  • pay the GST component directly to us by a disbursement at settlement
  • pay the GST exclusive purchase price to the property developer (vendor).
  • Property developers will need to give written notification to the purchasers when they need to withhold. The liability for the GST remains with the property developer, and there are no changes to how property developers lodge their business activity statements.

https://www.ato.gov.au/Business/Large-business/In-detail/Business-bulletins/Articles/GST-property-settlement-changes/

Retirement villages – What are the pitfalls

QUESTION

There was a scary segment on ABC’s 7.30 program recently about retirement villages. It told of a woman who bought a strata title unit about eight years ago, and died two years ago. Because she owned the unit outright, the only way for the family to get the money is to sell the unit but there are 19 for sale in a complex of 35 units and NO BUYERS. The poor family are stuck with paying all the costs of the unit until they find a buyer. What is the solution?

ANSWER

It’s a bit of a Catch 22. The group that run the units claim that it is essential for them to charge these fees because, if they did not charge them to vacant units, they would be forced to reduce services, or increase fees to all the old people who are living in the other units.

As Rachel Lane and I point out in our book Aged Care Who Cares, there is no easy choice. If you opt for a lease or licence arrangement, you accept the buyback price that is written into the contract when you purchase the unit in the first place. If you opt for strata title, you or your estate is stuck with trying to sell it.

It’s a warning to anyone moving into a retirement village to really take advice on the implications of the contract you sign. Unfortunately, I have seen these contracts and they’re nearly as thick as a phone book.

I don’t know any area which is as complex as aged care. This is why taking advice is essential
Read more: http://www.theage.com.au/money/ask-an-expert/blogs/ask-an-expert/retirement-villages-20140524-38ttd.html#ixzz35cDA4E4b

Achieving a Property Settlement

Achieving a property settlement can be a long and painful process. Early provision of honest and accurate information and having realistic expectations can greatly reduce the pain.

Divorce and separation is not easy. With this in mind, I turn your attention towards the property settlement.

A property settlement involves the division of marital assets between separating partners. This can be a highly emotional process and as such both sides may become vindictive. If this happens, the process is all the more painful and drawn out for all concerned.

Despite the obvious difficulty, an amicable approach is always favourable – especially where children are involved.

If an amicable settlement cannot be reached, you will need to involve the courts. The courts will require, among other things, the following:

  • A detailed list of all marital assets, liabilities, income and superannuation, with agreed values or appropriate valuation evidence included in support;
  • Details of the assets, liabilities, income and superannuation that each partner brought to the relationship;
  • The contributions each partner made to the accrual or preservation of assets etc. during the relationship;
  • The length of the relationship;
  • Details of care provided to any children of the relationship;
  • Details of any personal behaviour that might affect settlement, e.g. gambling or drug addiction;
  • Age and health of each partner.

If this information is provided to your solicitors in advance, they may be able to mediate an agreement without recourse to court in the first instance.

If you have any questions regarding family law or require assistance with a property dispute, feel free to contact our office.