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ARNECC Model Participation Rules Version 5

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The ARNECC Model Participation Rules Version 5 for e-conveyancing are in effect from 25 February 2019 in NSW, VIC, QLD, WA and SA.

Client Authorisation Forms

There are now two separate types of Client Authorisation Forms:

  • Client Authorisation Representative– authorises a solicitor or conveyancer to act for the client in a conveyancing transaction;
  • Client Authorisation Attorney– authorises a person acting under a power of attorney to act for the donor in a conveyancing transaction, the donor being the person giving the power.

See rules 5.6 and 6.3 for requirements.

Practitioners must ensure they use the correct Client Authorisation Form for each conveyancing transaction.

These forms are available on all By Lawyers Conveyancing matter plans within Folder ‘A. Getting the matter underway > Verification of identity folder’.

Verification of Identity in mortgage transactions

Responsibilities for verifying the identity of mortgagors have been updated. Practitioners acting for a mortgagee, must take reasonable steps to verify the identity of mortgagors in accordance with r 6.5.1(b), even where the mortgagor is represented.

Additional identity documents

Australian Evidence of Immigration Status ‘ImmiCard’ and Australian Migration Status ‘ImmiCards’ are now acceptable types of identity documents and have been added to the table in Schedule 8 of the Model Participation Rules.

All relevant By Lawyers publications have been updated to reflect the ARNECC Model Participation Rules Version 5, including the detailed Verification of Identity commentary located in all conveyancing and property matter plans under Folder ‘A. Getting the matter underway’.

Retirement Villages Amendment Act 2018 NSW – Schedule 1 [10], [17]-[20] commenced

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Commencing 11 February 2019, the Retirement Villages Amendment Act 2018 introduces rules of conduct for operators (Schedule 1 [10]), provides for the sharing of village information and allows for mediation of disputes (Schedule 1[17]-[20]).

Yet to commence are provisions implementing village contract information meetings, asset management plans, the annual auditing of village accounts and the provision of quarterly accounts to the Residents Committee. The commentary will be updated when the main provisions commence.

Leases – Demolition and relocation clause – Commercial lease

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A new demolition and relocation clause for use in commercial leases has been added to the Library of clauses in all By Lawyers Leases publications. This clause was added as a result of a request from a By Lawyers user.

The new clause provides for termination by either the lessor or lessee in the event that the lessor proposes to demolish the building or a substantial portion of the building of which the premises form part, on the lessor providing 90 days written notice to the lessee. This clause also addresses the costs of relocation of the lessee’s business and requires the proposal for demolition to be genuine.

Please email us at askus@bylawyers.com.au or call 02 4858 0619 with any feedback or suggestions. We would love to hear from you!

Author review of Conveyancing (VIC) Publication

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Conveyancing (VIC) – Author review

The By Lawyers Conveyancing (VIC) Publication, which includes the 1001 Conveyancing Answers, Sale of Real Property and Purchase of Real Property guides, has been reviewed to ensure that the commentaries and precedents (including the By Lawyers Contract of Sale of Land) are in line with current law and conveyancing practice, including electronic conveyancing.

The extensive review was performed by our author Russell Cocks. As with all our authors, Russell takes a practical approach drawing on his considerable experience to cover all aspects of procedure, with a focus on practical tips that will help solicitors and conveyancers confidently run a sale or purchase matter to completion.

We invite you to explore this updated publication and to consider the wealth of assistance the guides offers for solicitors and conveyancers acting in the sale and purchase of residential property in Victoria.

Foreign Buyers Duty – Western Australia

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From 1 January 2019 Foreign Buyers Duty applies, being additional duty imposed on certain transactions and acquisitions involving foreign persons or entities acquiring residential property in Western Australia. An additional duty of 7% is imposed on direct acquisitions (foreign transfer duty) and indirect acquisitions (foreign landholder duty) of residential property by foreign persons.

Foreign Buyers Duty will not apply to purchases of commercial, industrial or mixed used properties used primarily for commercial purposes.

An exemption from foreign transfer duty and foreign landholder duty for residential developments applies where certain conditions are met.

A Foreign Transfer Duty Declaration form is used to declare whether each purchaser or transferee is a foreign person. This form must be completed by each person acquiring an interest in any land in Western Australia.

The By Lawyers Purchase of Real Property (WA) guide has been updated as follows:

  • Comprehensive commentary has been added on Foreign Buyers Duty.
  • New forms added to the matter plan include Foreign Transfer Duty Declaration, Foreign Landholder Duty – Developer Exemptions and Foreign Transfer Duty – Developer Exemptions.
  • The To Do List – Purchase of Real Property now includes an item on the obligation to complete a foreign transfer duty declaration form.

By Lawyers keep on top of changes in the law so you can focus on getting the job done.

Electronic lodgement of leases – NSW

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From 10 December 2018 electronic lodgement of leases commences via PEXA.

Summary of the procedure for electronic lodgement of leases

The annexures to the Real Property Act lease form are prepared in the usual way outside PEXA and then uploaded for attachment to the RPA lease form in PEXA .

The RPA lease form is created in PEXA, the annexures attached and the lease document is then signed and lodged electronically.

A lease may be lodged electronically:

  • as a stand-alone registration;
  • in combination with a transfer of land; and
  • in a series with other leases.

Sub-leases, surrenders of lease and variations of lease are not yet available in PEXA. This functionality is expected mid-2019.

The Office of the Registrar General has granted a partial waiver of a subscriber’s obligations to comply with rule 1 of Schedule 3 – Certification Rules of the Model Participation Rules relating to verification of identity for lessors and lessees, in that there is no requirement to take reasonable steps to verify the identity of the parties. The waiver will continue until either the Model Participation Rules are amended or the partial waiver is revoked.

By Lawyers Leases (NSW) guide updated for electronic lodgement of leases

The relevant sections of the By Lawyers Leases (NSW) commentary, as well as the following applicable precedents, has now been updated for the electronic lodgement of leases:

  • To do list; and
  • Retainer instructions.

A new folder E. If required – Electronic lodgement has been added to both the Act for lessor and Act for lessee matter plans and includes:

  • A brief explanation of the transition to E-conveyancing;
  • Letter to lessor/lessee enclosing lease to be registered and client authorisation; and
  • Client Authorisation forms.

Enjoy practice more with By Lawyers!

New owners corporations regulations – VIC

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On 2 December 2018 the Owners Corporations Regulations 2007 were replaced with the Owners Corporations Regulations 2018, providing new owners corporations regulations which include amendments to the model rules for an owners corporation in Schedule 2 of the regulations.

A notable amendment to the model rules concerns changes to the external appearance of a lot and notification requirements for renovations to a lot.

Rule 5.2 requires lot owners to obtain the written approval of the owners corporation before changing the external appearance of their lot. An owners corporation cannot unreasonably withhold approval, but may give approval subject to reasonable conditions to protect the quiet enjoyment of other lot owners and the structural integrity or the value of other lots and/or common property.

Rule 5.3 provides that an owner or occupier of a lot must notify the owners corporation when undertaking any renovations or other works that may affect the common property and/or other lot owners’ or occupiers’ enjoyment of the common property.

The commentary and relevant precedents in the By Lawyers Conveyancing (VIC) guide – and the applicable sections of our very popular Reference Manual 1001 Conveyancing Answers (VIC) – have all been updated accordingly in consultation with our Victorian conveyancing author Russell Cocks.

 

Mandatory electronic lodgement from 1 December – WA

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Are you ready for mandatory electronic lodgement?

From 1 December 2018, all new eligible stand-alone transfers, caveats and withdrawal of caveats, and any lodgement case consisting of eligible discharges, transfers, mortgages, caveats and withdrawal of caveats must be lodged electronically.

Electronic lodgement is mandatory from this date and paper lodgement will not be accepted for the above scenarios, unless an instrument cannot be lodged using an Electronic Lodgement Network and a completed Request to accept paper lodgement form is attached. The form must be completed by the party requesting paper lodgement, and that party must also ensure that they hold evidence that supports their request. The form does not need to be used in a lodgement case that includes an additional document not listed above e.g. transmission, survivorship application.

The By Lawyers Conveyancing (WA) Publication has been updated accordingly to assist WA solicitors and conveyancers with the transition to electronic conveyancing.

For further details, see the ‘E-Conveyancing’ section of the By Lawyers conveyancing commentaries and our related article ‘A brief explanation of the transition to E-conveyancing’, which includes information on how to get connected, both accessible from the Matter Plan in our Conveyancing Guides.

 

Cladding rectification agreements – Sale and Purchase – VIC

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Amendments to the Local Government Act 1989 mean that solicitors acting for buyers and sellers of real estate now need to take into account any charges recorded against the property relating to funding for cladding rectification.

Concern about defective cladding used in the construction of high-rise residential buildings has resulted in the government adopting a legislative solution intended to provide some solace to unit owners who are faced with rectification costs, but it also has an impact on third-party purchasers of such properties.

Responsibility for administration of the solution has been allocated to municipal Councils, with a new Part 8B inserted into the Local Government Act 1989, which came into operation on 30 October 2018. This authorises Councils to enter into a ‘cladding rectification agreement’ with the owner of rateable land, or an Owners Corporation, and a lending body – presumably a conventional financier. Council may also be the lending body, but it is difficult to imagine, in the short term at least, that Councils will assume this role. Thus, the standard agreement will be tripartite, between the owner or Owners Corporation, the Council and a lender.

These agreements provide that the lender will advance the funds to pay the rectification works and Council will levy a charge on the land to recover the loan advance, interest and fees associated with the levy by instalments over a period of not less than 10 years.

Adjustment on purchase

In relation to the effect on departing and incoming owners, s 185L treats the cladding rectification levy as a ‘service charge’. Section 162 authorises the imposition of a service charge and s 185L (6) requires a cladding rectification charge to be paid by instalments. A vendor is obliged to disclose statutory charges pursuant to s 32A (b) of the Sale of Land Act 1962 and also charges ‘for which the purchaser will become liable in consequence of the sale’ pursuant to s 32A (c). Disclosure of current charges and any arrears may be achieved by annexing a rate notice, a land information certificate or giving an estimate, but the vendor is also obliged to disclose future liabilities due under the cladding rectification charge and information provided by Council will be crucial in this regard.

Any arrears under the levy will be the vendor’s responsibility, the current instalment will be adjusted between the parties at settlement and the outstanding levy will become the responsibility of the purchaser as a charge on the land: s 156 (6).

Section 175 allows a purchaser to continue to pay charges by instalments. A purchaser will therefore need to adjust the price to take account of the outstanding cladding rectification levy that the purchaser will become liable for and full disclosure in this regard is essential so as to allow the purchaser to set its price.

The Sale and Purchase commentary within the By Lawyers Conveyancing (VIC) Guide has been updated accordingly.

Conveyancing – signing electronic mortgage documents – NSW

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Procedure for signing electronic mortgage documents for mortgages over real property has been clarified in NSW with amendments to the Real Property Act 1900 made by the Conveyancing Legislation Amendment Act 2018 which commenced on 22 November 2018.

The amendments provide:

  • That where a mortgage is lodged for registration, any other document supporting that instrument, such as a caveator’s consent, may also be signed electronically: s 36 (1F) Real Property Act 1900; and
  • That a mortgage is acceptable for registration in NSW where it is signed by the mortgagee alone (that is, not also signed by the borrower and witnessed), provided that the mortgagee certifies that it holds a mortgage granted by the borrower on the same terms as that which is lodged for registration: s 56 (1A) Real Property Act,

The amendments reflect practice which has developed following the introduction of the National Mortgage Form.

The Commentary in the By Lawyers Mortgages (NSW) Guide has been updated accordingly.

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