ByLawyers News and Updates

1 January updates – All states

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The By Lawyers has attended to the following 1 January updates required by legislation and practice in all relevant jurisdictions:

Land tax – Increases to threshold values – NSW

Land tax thresholds in NSW are indexed to rise on 1 January each year.

The 2021 threshold combined land value has increased to $755,000 for all liable land. Special trusts and non-concessional companies are excepted.

A marginal tax rate of 1.6% of the aggregate taxable value above the tax-free threshold plus $100 applies.

If the aggregate taxable value exceeds the premium rate threshold of $4,616,000 then $60,164 is payable plus a marginal tax rate of 2% over that amount.

All relevant commentary and precedents in the By Lawyers Conveyancing & Property and Trusts guides have been updated accordingly.

By Lawyers Contract for sale of land

The 2021 edition is now available on the Sale of real property matter plan in the Contract section.

Leases and subleases – NSW, VIC, QLD, SA and WA

The 2021 editions are now available on the Leases – Act for Lessor matter plan for each jurisdiction.

These additions form part of our continuing commitment to enhancing our content and helping our subscribers enjoy practice more.

Bankruptcy

In response to the COVID-19 pandemic temporary changes were made to bankruptcy law, increasing the debt threshold to $20,000 from $5,000 and increasing the time frame for a debtor to respond to a bankruptcy notice to 6 months from 21 days.

As of 1 January 2021 these changes have ceased and a new permanent bankruptcy threshold has been implemented.

The current debt requirement for bankruptcy is a minimum debt of $10,000 and the current time to respond to a bankruptcy notice is 21 days.

The By Lawyers Insolvency – Bankruptcy of individuals publication has been updated accordingly.

Always up to date

In addition to our annual 1 January updates, By Lawyers ensures our publications are updated for 1 June and any other statutory or regulated adjustments where necessary. We also promptly  update our content for all relevant legislative amendments and other legal developments throughout the year, in all jurisdictions.

The team at By Lawyers wishes everyone a prosperous and safe 2021.

Contract of sale of land – VIC

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The Law Institute of Victoria has recently released a new version of their contract of sale of land. The By Lawyers Conveyancing Guide has been updated to include references to the current clauses of the 2019 LIV contract.

While no form of contract is prescribed by law any longer, various requirements are prescribed before a contract can be enforced.

The 2019 By Lawyers Contract of Sale of Land also meets these requirements and has a number of advantages over the LIV contract. The sale and purchase commentaries in the By Lawyers Conveyancing Guide include a detailed comparison between the LIV contract and the By Lawyers contract on a clause-by-clause basis, to assist in comparing them.

The By Lawyers Contract of Sale of Land, co-authored by conveyancing guru and By Lawyers author Russell Cocks, provides a vendor’s statement and contract in one document. The By Lawyers  contract is specifically designed for residential conveyancing transactions and seeks to overcome some of the traditional road blocks that arise.

The By Lawyers 2019 Contract of Sale of Land is located in the Contract folder in the Sale of Real Property Guide and is also available to purchase through InfoTrack.

For further information, see the article Seven reasons to use the By Lawyers contract or listen to an informative podcast explaining the features of the By Lawyers contract.

Off the plan – sunset clauses – VIC

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Vendors face new restrictions when seeking to activate sunset clauses to end off the plan contracts in Victoria.

Amendments for off the plan contracts

The Sale of Land Amendment Act 2019 commenced on 4 June 2019. It amends the Sale of Land Act 1962. The amendments require vendors wishing to end residential off the plan contracts pursuant to a sunset clause to either obtain the purchaser’s consent, or an order from the Supreme Court.

New notice requirements created by section 13 of the amending Act for off-the-plan contracts for residential land including a sunset clause, have yet to commence.

The changes do not affect the existing statutory rights of purchasers to end a contract if the plan of subdivision is not approved by the sunset date.

Rescission

Section 10A of the Sale of Land Act 1962 provides that if a sunset clause in a contract allows the vendor to rescind the contract, then rescission must be in accordance with the Act. Section 10C overcomes any inconsistent contractual provision.

Purchaser’s consent

Section 10B of the Sale of Land Act prohibits a vendor from relying on a sunset clause unless the vendor obtains the purchaser’s written consent to any such rescission.

A vendor seeking to obtain the purchaser’s consent must give the purchaser 28 days notice setting out the reason that the vendor proposes to rescind, the reason for the delay in registration of the plan and that the purchaser is not obliged to consent to the proposed rescission.

A precedent ‘Notice of rescission of off the plan contract’ in accordance with s 10B(3) can be found on the By Lawyers matter plan.

Court order

Section 10D of the Sale of Land Act provides that the vendor may apply to the Supreme Court for an order permitting the vendor to rescind a contract pursuant to a sunset clause. The Court must consider a wide variety of matters relating to the contract and the property, including increase in value. If an order is made it may include compensation to the purchaser and the vendor will be liable for the purchaser’s costs.

Notice

Section 10F, created by section 13 of the Amendment Act, has yet to commence. This new section will require residential off-the-plan contracts that include a sunset clause to include a notice informing the purchaser that:

  • the vendor may give a notice proposing to rescind the contract;
  • the purchaser may consent to rescission, but is not obliged to consent;
  • the vendor may apply to the court for an order permitting rescission;
  • the court may make such an order.

A precedent notice in compliance with s 10F will be included in General Condition 9 of the By Lawyers contract on commencement of s 10F.

By Lawyers contract

The general conditions and particulars of sale in the By Lawyers Contract satisfy all of the statutory requirements when selling prior to registration, relying on the default sunset period of 18 months.

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.

Conveyancing Victoria – Seven reasons to use the By Lawyers Contract of Sale of Land

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The By Lawyers Contract of Sale of Land for Victoria is gaining more fans among Victorian lawyers and conveyancers all the time, as it simplifies the conveyancing process.

For those still wondering what all the fuss is about, you can read below Seven reasons to use the By Lawyers contract – or you can listen to this lively and informative podcast:

 

Seven reason to use the By Lawyers Contract of Sale of Land:

  1. The contract and the vendor’s statement are combined into ONE document, with the vendor’s statement, logically, coming FIRST. The vendor’s statement is formatted to deal with the obligatory disclosures first, then to group the optional fields in a way that makes removal of those fields simple if they are not required. Part 2 general conditions in PDF form removes the need for ‘standard’ special conditions. Any genuinely special conditions can be added.
  2. Clear new approach – all pertinent details are set out in Part 1 to enable anyone to quickly understand the deal by referring to this Part.
  3. Particulars of sale include a “sunset date” for off the plan approvals. No more searching through mountains of special conditions to work out this crucial date.
  4. Non-derogation warranty. The general conditions can be amended by any special conditions BUT not so as to reduce the rights created by the general conditions. No more contracts that say one thing on page 1 and reverse that on page 15! This contract is fair to both parties.
  5. General Condition 12 – deposit release – establishes a clear protocol for early release, by requiring timely objection to title. Title objections actually have very limited relevance to the Torrens system, as title is part of the disclosure in the contract. General Condition 12 allows 28 days to object to title. This offers protection to purchasers, while allowing the vendor to have use of the deposit. Again, this process is fair to both parties.
  6. General Condition 14 – loan condition – extends the time for approval to 21 days and allows for extension, subject to vendor’s ability to end the extension by notice.
  7. General Condition 25 – losses – removes any disputes relating to default losses from the settlement process and allows the parties to resolve these issues after settlement. Unless there is a legitimate objection to title, the matter is settle and disputes relating to quality and inclusions etc, follow after settlement. This removes unnecessary settlement delays.

The By Lawyers Contract of sale of Land is available to LEAP users and By Lawyers subscribers via the Conveyancing & Property – Sale matter plans, or for purchase on the By Lawyers website.

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.

By Lawyers Contract of Sale of Land – Victoria

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A new form of contract, co-authored by Russell Cocks, providing a vendor’s statement and contract in one document.

The contract is specifically designed for residential conveyancing transactions and seeks to smooth some of the traditional road blocks that arise in these transactions.

The By Lawyers Contract of Sale of Land is located in the Contract folder in the Sale of Real Property Guide.

Seven reasons to use the By Lawyers contract

  1. The Contract and Vendor’s Statement are combined into ONE document, with the Vendor’s Statement, logically, coming FIRST. The Vendor’s Statement is formatted in such a way as to deal with the obligatory fields first and then group the optional fields in way that makes removal of those fields simple if they are not required.
  2. Particulars of Sale in the Contract includes a “sunset date” for off the plan approval. No more searching through mountains of Special Conditions.
  3. Non-derogation warranty. General Conditions can be amended by Special Conditions BUT not such as to reduce the rights created by the General Conditions. No more contracts that say one thing on page 1 and reverse that on page 15. This Contract is fair to both parties; if someone wants to create an unfair contract they cannot hide it within this contract.
  4. General Condition 12 – deposit release. Establishes a clear protocol for release by requiring timely objection to title.
  5. General Condition 14 – loan condition. Extends time for approval to 21 days and allows for automatic extension, subject to vendor’s ability to end the extension by notice.
  6. General Condition 25 – losses. Removes disputes relating to default losses from the settlement process and allows the parties to resolve these issues after settlement.
  7. General Conditions 27 & 28 – default and rescission notices. Divides the process into two steps with specified legal cost in respect of notices.

There are also other improvements, such as simple off the plan and electronic conveyancing conditions, a requirement that a vendor produce a copy lease at settlement and a clause passing ownership of abandoned goods to the purchaser. This Contract continues the quest commenced by the 2008 Contract (remember Requisitions?) to simplify conveyancing by ironing out the speedhumps.

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