As we get older, some things just get harder to manage.

That goes especially for the traditional family home. When you’re in your 30s, maintaining a house with two big yards is something to look forward to on the weekend.

But when you’re in your 60s, you just want to enjoy your retirement.

For many of my parents’ generation – the Baby Boomers – the decision to downsize is a tough one.

Some people don’t want to let go of the house they raised their children in. Others see downsizing as one step closer to the nursing home. Some see it as “trading down”; letting go of a sizable bricks and mortar asset to move into something smaller.

Recent changes to superannuation law are enticing many of these “fence sitters” to commit to downsizing.

Under the new rules, retirees can funnel up to $300,000 from the proceeds of the sale of a home they’ve owned for 10 or more years into their super fund. If you’re a married couple, that means between you, up to $600,000 from that sale could be invested into your super – and all the tax benefits your super fund enjoys.

On the surface, this might seem like the chance for a windfall: sell the family home, or an investment property, and move into something cheaper and live comfortably on the extra funds you’ll free up for your super.

But as an estate lawyer, I can tell you it’s never that simple.

Already, plenty of retirees are taking advantage of this new scheme, meaning demand for smaller homes is increasing. And not only are you up against other retirees in this market, but younger Australians are increasingly seeking apartments or townhouses to match their busy lifestyles.

That means you may not have the buying power you’d like when re-entering the housing market and could take a hit in stamp duty.

More importantly, how will the sale affect your entitlement for the aged pension? Cash is not exempt from aged pension means testing, so by liquidating your biggest asset you could be shooting yourself in the foot. Other questions to consider include:

• Is the house you’re looking to sell Capital Gains Tax exempt?
• Is the property owned as part of a trust, or subject to finance?
• How will the sale affect your children and grandchildren’s inheritance?

Downsizing can be a liberating experience, something that can actually help you enjoy your retirement more by freeing you up to live, but it needs to be done properly.

At Welden & Coluccio Lawyers, we are Estate Law specialists. This means we help people make decisions that will benefit them and their families into retirement and beyond.

If you’re considering selling your home to take advantage of this new super scheme, make an appointment to speak to us, as no decision happens in a vacuum.

It is wise to see what is proposed all from all angles.

So you have your business plan mapped out, have secured funding for your venture and are now ready to take a giant leap and secure premises for your operation. Before signing on the dotted line make sure that you know all there is to know about Retail and Commercial Leases.

Firstly, Retail and Commercial Leases are governed by the Retail and Commercial Leases Act 1995 (SA).

Before you enter into a retail or commercial lease, you need to obtain a copy of the lease for negotiation and a disclosure statement from the landlord. The disclosure statement will outline all significant elements of the lease, including but not limited to:-
– The property address; size of letable area
– permitted use of the area
– term of the lease
– amount of rent payable
– whether the lessee is required to pay outgoings
– right of renewal, and
– consequences of breaching the lease.

Before signing it is critical that you carefully read this document and have a thorough understanding of all the terms.

At this point it is important to note that the minimum term for a lease period is 5 years. 5 years can sound like an eternity when you are starting a new (and unproven) business. However, there are exemptions to this which may be described in the document as a short-term lease, an exclusionary clause or sub-lease.

You must make sure you understand the full effect of your lease period prior to signing the lease.

In the event that your business were to fail, it is sometimes possible to assign the lease. This can only occur with the consent of the lessor. Under this procedure, you request consent to assign the lease in writing, providing the lessor with all information of the proposed assignee. This information includes the assignee’s financial position and relevant business experience. Upon receipt of this application, the lessor must provide to you a notice in writing as to whether or not consent is granted. This needs to be done within 42 days. Furthermore, if consent to the assignment of the lease is granted you would be would be liable under the lease until either:-

– The second anniversary of date which lease was assigned;
– The date which the lease expires; or
– If the lease is renewed or extended after assignment, then the date which renewal or extension occurs.

In the event that landlord fails to grant consent to the assignment, you will be liable for the remainder of the duration of the lease. It is not difficult to appreciate that entering into a Retail or Commercial Lease is not without risk.

In any event, retail and commercial leases are always complex. It is prudent to seek advice from a solicitor if you are thinking of entering into a commercial lease arrangement. A solicitor is best equipped to provide you with appropriate advice. For advice on property law or leases in general, please contact Jason Coluccio or the team at Welden & Coluccio Lawyers.

Maddalena Romano, an experienced solicitor skilled in all facets of property conveyancing, discusses the process for selling a home and advocates for the role of a knowledgeable solicitor in this.

There are different reasons homes are sold. For example, you might be up-grading to a bigger home, down-sizing to a smaller one, or finalising a property settlement. Regardless of your reasons, selling a property it can be a difficult and emotional time. Selling a house is the process of exchanging ownership in property; it involves a broad range of steps such as disclosures, contracts, cooling-off periods, title searches and property inspections before the home is sold.

Selling your home normally consists of three steps

• Pre-contract – preparation of form 1 and searches
• Pre-completion – preparation of the contract of sale
• Post-completion – conveyancing

The solicitor will deal with the full range of potential issues relating to a property including:

• Investigate any charges and encumbrances on the property
• Identify precisely what is included and excluded in the sale? Which items are considered fittings and which are considered fixtures?
• Negotiate the possibility of a final inspection before settlement
• Determine whether or not GST applies to the purchase price.
• Advise on Ownership structure such as joint tenancy or tenants in common

Should I use a solicitor?

Using a solicitor will give you peace of mind thus allowing your agent do what they do best; getting you the best price for your home:
• Cost: for a solicitor to undertake the Form 1, conveyancing will be a fixed fee
• Protection: Solicitors will be able to assist you if the sale goes wrong and protect your interest as you are our client.
• Legislation: Property laws are constantly changing. We have an in depth knowledge of the property laws.
• Qualifications and experience: The contract that will be used is the Law Society contract. We recommend that the Law Society contract is used as the contracts are updates yearly to ensure it meets the highest quality and standards of legal principles adopted by the Law Society. The contact is only available to authorised members of the profession.
• Specialist advice: There is frequently a lot of variation across property sales. Solicitors can help you with the particular needs you have in the transaction. Do you need advice on Capital Gains Tax? Do you need to change your Will? Will the sale have family law implications?

Hidden Costs of Using a Conveyancers

You might think that you are saving costs when you use a conveyancer to undertake your property settlement. When you speak to a conveyancer they will advise you that their cost will be $650 + GST ($715), but they don’t explain to you the hidden costs which you don’t know until you receive your settlement statement after settlement.

Conveyancers will charge you extra for the following:

• For disbursement for check and history search of CT, photocopying, postage, bank cheques, insurance, phone, fax and printing which can equate to an additional cost of between $100 and $150 ;
• VOI fee to comply with Registrar General’s Verification of Identity Policy between $50 and $80 per person;
• Banking fees to attend at Banks to deposit proceeds of sale to nominated bank accounts after settlement an additional $44.

Therefore a simple conveyance of your home goes from $715 to $1000, this is without the benefit of receiving any legal advice.

In Summary…

Solicitors have a comprehensive and nuanced understanding of the Law. As a homebuyer, you are potentially engaged in a complex sale with a high number of issues and risks. Using a solicitor affords you the experience and knowledge to tackle any hurdles decisively and with confidence. Welden & Coluccio Lawyers are experienced in all facets of this process and are able to assist you enabling you to get on with the joys of home ownership rather than the stresses.

A recent Revenue Ruling by the Commissioner of State Taxation has now made clear that the use and implementation of including the phrase ‘and or nominee’ in a contract, most likely for the purchase of land, is no longer required.

A word of warning. If you think it is now safe to begin executing contracts for the purchase of land on behalf of family and friends and so on, think again. Signing a contract for the purchase of land, or any contract for that matter, is a serious step and should not be undertaken without considerable thought and legal advice. If the intended purchaser, perhaps your friend, pulls out of the deal or fails to settle, the vendor will sue YOU. After all, you signed the contract and until settlement occurs you are required at law to fulfill all of the purchaser obligations, including to settle and purchase the property.

First things first, what is ‘and or nominee’ and why was it frequently used?  By using the phrase ‘and or nominee’ after the name of a purchaser, allowed one party to sign the physical contract for the purchase of land, whilst reserving the ability to register the actual owner of the property recorded on the title deed in another.

The best example is the purchase of property at an auction.  Once the bidding has ended the highest bidder must immediately execute the contract for the purchase of the land. On many occasions, the intended purchaser may not be able to physically attend the auction but has given authority and instructions to a third party to bid and execute the contract on their behalf.  In such an instance, the actual purchaser, Mr X, authorised and instructed the winning bidder, Mrs Z, to execute the contract. The name of the purchaser would be recorded as Mrs Z and or nominee.  Shortly after the contract was signed the letter of agency is produced and the Memorandum of Transfer is drafted with Mr X appearing as the actual purchaser.  What is often overlooked is that the letter of agency must pre-date the execution of the contract.

Another avenue for those that have executed a contract for the purchase of land to own it in another name is to assign the contract by way of a deed, another short written contract. In our previous example, if the letter of agency did not exist, or perhaps Mrs Z and Mr X wish to hold the land in a company which has not yet been created, Mrs Z can assign her interest in the contract by deed to the new company.
When it comes to Stamp Duty, a State assessed tax enshrined in the Stamp Duties Act 1923, which is charged on certain documents and transactions (usually where a transfer of ownership has occurred), it has been the previous practice of the Commissioner for State Taxation to require evidence of duty being payable not only on the Memorandum of Transfer but also the Deed of Assignment.  Stamp Duty on the Deed of Assignment is paid on the amount of the deposit paid.

Back to the new ruling. The Commissioner of State Taxation has confirmed he will adopt and recognise the existing common law that a purchaser recorded in a contract may direct (without the need for a deed of letter of agency) the vendor who to transfer the property to.  This will now avoid the need for letters of agency, Deeds of Assignment and the use or overuse of the phrase and or nominee.

Signing any sort of legal document without legal advice is risky. You should always seek professional advice on all legal documents before signing. Welden & Coluccio Lawyers are here to assist and can provide expert legal advice on a range of written contracts including the purchase, or sale, of real estate property.

Each morning I like to watch a few minutes of Sunrise.  At least I do, until I realise that the kids are no-where close to being ready for school (and the grumbling ensues).  At any rate, yesterday morning, I happened to catch a report about the rise of ‘Mum and Dad Banks’.  This is the term that has been coined to describe a situation when parents provide money or security to assist their children to jump onto the property ladder. . . although usually not at the bottom (as most of us did, and perhaps where they should).

The story continued, suggesting that a whopping 52 percent of all first home buyers in this country required some sort of financial assistance from their parents in order to secure their first foothold on the property ladder.

While the story was primarily focussed upon housing unaffordability throughout Australia with ‘Family Pledges’ as being a realistic solution to this problem, I was thinking ‘Oh no! Please don’t go there.’

Let me state, from the outset, that Family Pledging is a risky strategy.

So what exactly is a ‘Family Pledge’?

Essentially it is a guarantee.  It is a guarantee that you (the parent), should your offspring fail to meet their financial obligations or find themselves in a situation where they are unable to make their loan repayments, will undertake to pay the debt.

In most cases, Family Pledges evolve like this.  Son or daughter finds the perfect property (often expensive and close to the CBD).  They approach the bank presenting their meagre savings and are swiftly declined.  The initial ‘No’ is soon replaced by a ‘Yes’ along with the provision that a family member (usually Mum and Dad), put up their home as a security for the loan.

In recent times, especially as house prices have risen, this has evolved to be an effective strategy used  by banks.  After all, they know how hard it is for parents to say no to their kids.

The nature of these pledges, I mean ‘guarantees’, is that the bank will demand that parents go and seek their own independent legal advice on the guarantee document they are about to sign.

Why?

Well, they know that there is a lot at stake if things go wrong and they are seeking to absolve themselves of all liability if it does.  Make no mistake the stakes are indeed high, the kind of situation that has Mum and Dad losing the very roof over their own heads.

While I’d like to say that we have parents beating down our doors asking for legal advice on such documents, the reality is it doesn’t happen.  Lawyers seldom, if ever, provide advice on these kinds of documents.  You see, parents want to help their kids.  More pertinently, and assuming that they believe their kids are financially responsible, they seem to believe that the main (and only) risk is that their kids will be remiss in their repayments.  Unfortunately, there is no ‘peace of mind’ to be found in this belief.  You see, even the most financially astute person can fall victim to relationship breakdown.  Yes, should your child and his partner separate, chances are they will not be able to afford the loan repayments and you will be called upon to pay off the huge interest that has accrued.  I mean, let’s face it, if they could they would not have needed you to go guarantor in the first place.

The bank knows that very few people will seek advice on such a document and will never even consider such a scenario or countless others (job loss, illness) all which have the potential to leave you in a precarious situation.

The bank always wins.

Always.

Consider this.  If your son has a $100,000 loan with the bank and has it paid down to $30,000 but THEN defaults on his payments, the bank may want YOU to repay the $20,000 credit card AND the $25,000 personal loan he has with the bank also.  It is all in the fine print.

An old gambler’s truth is that you should only gamble what you can afford to lose.  Can you afford to lose your family home?  Your retirement fund?

I thought not.

All contracts, loans, guarantees and other important documents should always be examined by a lawyer. Visit Jason Coluccio or myself, for this and any other property related issues so that if you do decide to sign, it is with eyes wide open to all the potential risks.

Purchasing a new home is undoubtedly one of the most exciting, yet stressful of life experiences.  Recently we had the absolute privilege to assist a young family secure their ‘dream home’.  They, like many new couples, quickly realised that becoming a home owner was about much more than simply identifying their search area, drawing up a wish list and agreeing on a maximum budget.  In fact, finding their ‘forever home’ was only the beginning of a long and complicated process that would be filled with more than one legal pot-hole.

You see, purchasing a new house is a big task that extends well beyond the primal need to find a place to live.  Common factors in this choice may include:

• Location
• An intention to renovate
• Price
• Proximity to friends, relatives, schools and amenities
• Aesthetics

Too often once the property is purchased, upon closer inspection of the documents, the new owner discovers that their ‘dream property’ fails to meet their needs.  For example:

• You wish to run your business and consultation rooms from your house, only to find out that council won’t approve it.
• You intend to demolish the building to build a brand new home, only to realise the house is heritage listed which doesn’t allow you to touch it.
• You purchase the house in an auction for an absolute steal, only to realise afterwards that it needs many repairs that you didn’t notice beforehand. It suddenly becomes a costly investment.
• You plan to subdivide the property only to find out there is an encumbrance that doesn’t allow for it.
• The building has a demolition order from the council.
• You buy a strata unit with the intention of building a deck, only to find out that the council has fire-proofing restrictions that don’t allow for a deck to be constructed.

These situations are ones which your conveyancer should actively be working to avoid before you cool-off from a contract

At Welden & Coluccio Lawyers, we scrutinise both Contracts & Form 1’s during your cooling-off period in order to identify any potential issues related to the property. As legal professionals we always have our client at the forefront of our minds, and we understand that buying a home is a daunting process. Our job is to assure our clients that even the most apparently insignificant details are never overlooked so that you can purchase your property with eyes wide open.

So, list the reasons as to why you wish to purchase your home, and make it known to us as your conveyancer.  In this way when we act for you, we know exactly what you want, and we can work towards your goal together.  Fortunately the family I mentioned previously did just this and having a team of lawyers in their corner meant that they did indeed get their ‘happily-ever after’.

As part of the 2015-2016 State Budget, the government has abolished stamp duty on transfers of non-real property, together with stamp duty on transfers of non-residential, non-primary production real property, with phasing-in commencing from 1st July 2016.

Abolishment of Stamp Duty on Some Items

The abolishment of stamp duty on transfers of non-real property applies to items such as plant and equipment (which are not fixed to land), goodwill, intellectual property, receivables and transfers of statutory leases and licences, such as fishing licences, taxi licences and gaming machine licences and entitlements.

Non-Residential, Non-Primary Production and Real Property (“Qualifying Land”) to be Phased in

A one-third reduction was brought in on the 7th of December 2015. Phasing-in of stamp duty abolishment will continue with another third reduction on the 1st July 2017, with the complete abolition of stamp duty occurring on the 1st of July 2018.

Until duty on transfers of non-residential, non-primary production real property is abolished on the 1st of July 2018, duty will continue to apply to the following transfers:

• an estate or interest in land
• an estate or interest in a mining tenement, pipeline construction (under the authority of a pipeline licence), or an interest conferred by a forest property agreement
• an option to acquire land
• a right to acquire an estate or interest in land
• any other right or interest prescribed by the regulations
• anything fixed to land
• goods which have a significant connection to the transferred land.

What is Qualifying Land?

Land which is being used other than for residential purposes or primary production as defined in section 50 of the 2015 Budget Act.

To determine this, the Commissioner will rely on land use codes when considering land to be residential or primary production land. Qualifying land will be seen as: commercial, industrial, vacant land (exceptions apply) institutions, public utilities, recreation and mining and quarrying.

Residential land is determined to be land which will predominantly be used for that purpose. If the land is vacant but within a zone established by a Development Plant that envisages the use or potential use to be residential, it will be classed as such.

Changes to stamp duty payments as outlined in the 2015-2016 will affect those with an interest in commercial property. For a full understanding of these changes and to ensure you receive the benefits of them, it is important to engage a conveyancer with specialised commercial experience.

As a father of three I know too well the importance of pool safety especially where young children are concerned.  In fact, our youngest child is currently enrolled in VacSwim, a brilliant government-funded program that is designed to promote water safety in our primary school-aged children.  While programs such as this are important, alone, they are not enough to prevent water related deaths.  Unfortunately we have recently witnessed a dramatic nationwide surge in water related tragedies.  With this in mind it is pertinent to address the important issues related to pool ownership and associated legal responsibilities (particularly if you are selling your home).

The South Australian Government takes public safety very seriously.  This safety extends to what happens within the privacy of your own home. With drowning remaining the biggest cause of accidental death in young children, a majority occurring in private backyard swimming pools and spas, there are some regulations that you must adhere to if you plan on selling your home with a pool.

All pools must have a continuous safety barrier that restricts young children access. It must be permanent and at least 1.2 metres in height. If a boundary fence is used, it must not be any less than 1.8 metres in height where it faces the pool and must have 900 millimetres of ‘non-climbable’ space at the top inside of the fence. Gates should swing outwards and be self-closing. They should also have a child-resistant doorset that stands 1.5 metres off the ground. Filtration systems must comply with Australian standards to reduce risk of injury. There are also additional protocols specifically related to above ground and portable pools and spas.

If you are selling your property with a swimming pool or spa, you are responsible for meeting all safety requirements prior to placing your home on the market. There are different specifications that must be adhered to (depending on the age of your pool or spa).

Although it’s not a requirement to have pool or spa area inspected; if you are unsure about what safety regulations you need to comply with, or wish to know if your current setup observes the legal obligations; it is recommended that you contact a local council officer.  Local councils have legislative authority to enforce requirements and tell you what needs to be done. Alternately, you can use a private certifier to undertake an inspection. Furthermore, it is critical to understand that if you move into a new home without a pool, development approval is also required, by law, from your local council, if you wish to install one.

So keep this in mind before you dive into selling your home, if you have a pool or spa (or both if you’re so lucky) make sure you comply with government regulations, not only to make your selling process smooth, but to make life with a pool safer and more enjoyable for everyone right now and for many summers to come.