ByLawyers News and Updates

Victoria – deregulated Contract of Sale

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Consequences of the deregulated Contract of Sale of Land

What were the regulations?

The Estate Agents (Contracts) Regulations 2008 (‘regulations’) reached their sunset date on 11 August 2018. Consequently, those regulations and the amending regulations in 2011 and 2014, are revoked. The regulations bound estate agents, but not legal practitioners and conveyancers.

Legal practitioners and conveyancers may prepare contracts of sale of land in any form, and such contracts, provided they satisfy formal requirements, will be enforceable. The regulations on the other hand required estate agents to prepare contracts in the ‘prescribed form’, unless an agent used a form of contract prepared by a legal practitioner or conveyancer.

What does the deregulation mean?

The revocation of the regulations notionally means that the minority of estate agents who chose to prepare contracts are left with no prescribed form of contract. However, s 53A of the Estate Agents Act 1980 authorises agents to use contracts that are approved by a professional association, within the meaning of the then applicable Legal Profession Act 2004. The prescribed contract was approved by the Law Institute of Victoria (LIV) and the revocation of the regulation does not affect that approval. The current version of the LIV contract includes a warranty in GC 2.1 that the general conditions of the contract are identical with the general conditions prescribed in the regulations. That warranty would appear to be unaffected by the revocation of the regulations.  Thus, we can expect that the prescribed contract will continue in general use into the near future.

What are the alternatives to the prescribed contract?

Whether the deregulation of the contract will result in other forms of contract becoming common is yet to be seen. It would be fair to say that special conditions created to accommodate recent changes, including CGT & GST withholding, have resulted in the LIV contract becoming unwieldy and the use of alternative contracts increasing.

The By Lawyers contract is ready and waiting

The By Lawyers Contract of Sale of Land for Victoria was introduced on 1 March 2018 and its use has been increasing steadily among Victorian legal practitioners and conveyancers. The By Lawyers contract covers CGT & GST withholding in simple terms, without the need for Special Conditions, and has a number of other advances over the LIV contract which further simplify the conveyancing process.

Some of the compelling reasons to use the By Lawyers contract include:

  • it is co-authored by Russell Cocks, who has brought to the task 40 years of hands-on Victorian conveyancing experience and Guy Dawson of By Lawyers, arguably the most widely read legal author in Australia today; and,
  • the By Lawyers legal and editorial teams ensure the By Lawyers contract is always up to date with any changes in the law or practice.

For further information you can read the related post Seven reasons to use the By Lawyers contract.

The By Lawyers Contract of sale of Land is available to LEAP users and can also be accessed through the By Lawyers website by subscribing to the Conveyancing Guide.

FED – Immigration – New charge

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The Migration Amendment (Skilling Australians Fund) Act 2018 introduces a new charge.

Employers who wish to sponsor employee visa applications must pay a Nomination Training Contribution charge for all nominations after 12 August 2018.

The visa subclasses that will initially be affected are 482, 186 and 187.

Commentary has been added to the By lawyers Immigration publication accordingly.

By Lawyers always keeps you up to date!

 

Family Law – FCC costs increases

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There have been costs increases in the Federal Circuit Court for itemised costs in family law and child support proceedings, pursuant to Schedule 1 of the Federal Circuit Court Rules 2001.

The increases are for initiating applications and other hearing-related costs.

An alert has been added to the By Lawyers Children and Property settlement publications.

Employment Law – Domestic violence leave

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From 1 August 2018 all employees under modern awards – full-time, part-time and casual – have an entitlement to 5 days unpaid leave to deal with family or domestic violence issues.

The Fair Work Commission decided in their four-yearly review to add a new model term into all modern awards. The Full Bench concluded that:

…retaining employment is an important pathway out of violent relationships. Conversely, a lack of financial security has an adverse impact on the ability to recover from family and domestic violence. Absent an entitlement to unpaid family and domestic violence leave, employees will be reliant on the goodwill of their employer to obtain the leave necessary to deal with the various issues arising from family and domestic violence while remaining in employment.

The model clause will allow unpaid leave for family or domestic violence reasons which are defined as… violent, threatening or other abusive behaviour by a family member that seeks to coerce or control the employee and that causes them harm or to be fearful.

The unpaid leave may be taken for such reasons as to make safety arrangements for the employee or a family member, to attend court, or to access police services.

Employees are not required to access paid holiday or sick leave first before taking the unpaid domestic violence leave.

The leave is available in full at the start of each 12-month period of the employee’s employment, does not accrue and is available to full-time, part-time and casual employees.

Our Employment Law guide has been updated.

Costs agreements and client service agreements – enhancement for protection against fraud

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All By Lawyers costs agreements and client service agreements have been enhanced within the Billing and payment arrangements section now including:

 

  •  Two-factor verification protocol: a suggestion that the client always telephone to notify the firm and confirm bank account details before making any electronic transfer of funds into the firm’s trust or office accounts. With recent incidents of fraud involving interception and hacking of lawyers’ emails and the fraudulent provision of incorrect bank account details to clients, this suggestion is in line with the advice of the various state regulatory bodies and, if followed, provides protection against such criminal activities; and,

 

  • Specific provision and authority for alternate payment options, including credit card, electronic funds transfer and instalment plans, confirming that clients are required to comply not only with the terms of the law firm’s costs agreement, but also with the terms of any third party agreement for payment, such as the agreement with their bank regarding the use of a credit card. This provides protection for the law firm against credit providers seeking to recover funds paid via unauthorised transactions.

Family Law Courts fees increase 1 July 2018

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The fees payable in the Family Court and Federal Circuit Court are changing from 1 July 2018. These increases will impact on Children and Property Settlement matters as well as Divorce/Nullity.

The By Lawyers Family Law guide will be updated where applicable to reflect these amended fees.

A brief explanation of the move to e-conveyancing – PEXA settlements

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Electronic conveyancing is coming

The conduct of a sale and purchase up to and including exchange can and will remain unchanged for some time as practitioners adapt to conducting matters electronically using emails and software that is currently being introduced into the market.

It is in fact possible today to prepare, submit, negotiate, sign and exchange contracts without the use of paper. Those practitioners interested in joining this move away from paper will find the means to do so within the By Lawyers conveyancing guides.

Electronic settlement has already arrived

However, the focus of this explanatory paper is the electronic settlement process – currently available via PEXA, but soon also via SYMPLI, a joint venture of Infotrack and the ASX.

So, how does PEXA work?

The PEXA process that follows exchange requires all participants in the transaction to have been identified, be registered and have a PEXA digital certification that entitles them to transact electronically in what is known as a ‘workspace’.

A workspace in the electronic conveyancing platform is opened by the vendor, or failing the vendor any other party, for each transaction and a date and time for settlement is entered. When the workspace is created the vendor ‘invites’ all other parties to the workspace via PEXA.

The workspace is where the transaction occurs. As the transaction progresses, each party can add, remove or amend their information in the workspace.

Whilst such matters as requisitions and settlement adjustments are completed outside the workspace, they can be uploaded to the workspace and made visible to a party of choice. For instance, a discharge authority might be made visible to the vendor’s discharging mortgagee only.

The vendor and purchaser sign a paper Client Authorisation allowing their practitioner to sign for them, as it is the practitioner who has the authority through their Digital Certificate to sign for clients. Therefore, the Client Authorisation is a critical document and must be retained for 7 years as they may be audited.

Outgoing and incoming mortgagees make their arrangements for settlement without input from practitioners. Payment directions are communicated by entry into a Financial Settlement Schedule which contains tabs for Source Funds and Disbursements.

Each party to the transaction completes their tasks prior to the nominated settlement time and for settlement to take place as planned, the Settlement Schedule must balance, the source funds must be available, and all documents must be signed.

How does settlement occur?

The workspace is locked automatically once everything is ready. This triggers title verification and movement of the source funds into a holding account. A final search is not required as the workspace will not lock if there are title impediments to registration.

Settlement occurs exactly as scheduled and title documents are lodged and registered, and the settlement funds disbursed in accordance with the Financial Settlement Schedule. The settlement process is automatic and completed in about 15 minutes which sees cleared funds transferred and title registered.

Note settlement can be cancelled at any time prior to the locking of the workspace.

The way of the future

 

The electronic settlement process is remarkably efficient and easy once you get used to it. As it seems inevitable that electronic settlements – and ultimately electronic conveyancing – will become standard practice, it is well worth becoming familiar with it and its really not so hard to do. By Lawyers conveyancing guides can assist you.

Immigration work to become easier for lawyers

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With the impending removal of dual regulation, immigration practice becomes more accessible for legal practitioners.

Currently, lawyers practising in immigration law are subject to dual regulation: the regulation already applicable to Australian legal practitioners, plus the requirement to be registered as migration agents and subject to the Migration Agents Regulatory Authority (MARA).

Under the proposed Migration Amendment (Regulation of Migration Agents) Bill 2017 (Cth), currently before the senate, this barrier to lawyers conducting immigration matters will be removed. Lawyers will no longer have to register as migration agents and will not be subject to regulation by MARA.

This means lawyers will be able to conduct immigration matters as part of their usual practice, with no additional registration or regulatory requirements.

The proposed commencement date, for lawyers holding practising certificates without a supervised legal practice condition, is 19 November 2018.

Further information about the Bill, including proposed consumer education on the changes, is available on the MARA website.

By Lawyers Immigration guide allows lawyers to take advantage of these changes

By Lawyers continually reviews and updates all publications in line with legislative and procedural changes, ensuring publications are current for every matter undertaken.

Whether acting for an employer who wants to sponsor a temporary overseas worker or a family seeking to bring an older relative from another country, the By Lawyers Immigration publication assists practitioners from start to finish.

Conveyancing – GST withholding – additional commentary, amendments to contracts and precedents

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The requirement for purchasers to withhold and remit GST on taxable supplies of certain real property under subdivision 14-E Schedule 1 Taxation Administration Act 1953 comes into force on 1 July 2018. This applies to all contracts that settle after 1 July. The transitional arrangements are that contracts entered into prior to 1 July 2018 and settle before 1 July 2020 are exempt from the withholding regime.

The sale and purchase commentaries in all states have been updated, the By Lawyers contracts in NSW and VIC have appropriate new provisions and precedent letters are being updated.

QLD – Online transmission applications – Updated forms, new Trust Details form and updated commentaries

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From May 2018 transfers recording a transferee  – that is, the executor – as trustee can be lodged electronically. To do this only details of the trust will be required – that is, as executor pursuant to grant of probate.

For consistency in paper the Titles Registry introduced the Trust Details form, on which the basis of the trustee transfer can be noted. Transmission applications that are supported by a grant from a foreign jurisdiction that is eligible for re-seal in Queensland under the British Probates Act 1898 (a Queensland recognised grant) that have not been resealed in Queensland are now made on a form 5.

While a form 1 Transfer is available through PEXA and eLodgement, transmission application forms 5 and 5A can only be lodged through eLodgement. See Electronic lodgement of title transactions (eLodgement) for details of what forms can be lodged and how to use eLodgement.

Transitional provisions for forms 5 and 5A are in place until 30 September.

Forms 5 and 5A have been updated to the latest version. The new Trust Details form has been added to the matter plan. Also our Probate and Letters of Administration commentaries have been updated to reflect these changes.

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