Property Law

One of the most important considerations in both establishing and running a business is getting the structuring right at the outset. In this video, our Simon Bennett discusses the things you need to be considering in this regard.

In this video, OMB Solicitors Senior Associate Cameron Marshall discusses the things you need to do if you need access to your neighbour’s lot.

What are Things You Should Consider Before a Buying a Duplex?

In this video, OMB Solicitors‘ Partner & Accredited Property Law Specialist, Simon Bennett discusses the things that you should be considering prior to purchasing a duplex.

Contact our Gold Coast Lawyers team for more information here Propery Law Enquiries.

What New Zealand Citizens need to know before considering purchasing Property in Queensland?

In this video, Property Law Associate Jessica Thomas talks about legal considerations for New Zealand Citizens thinking about purchasing Property in Queensland.

Contact our Gold Coast Lawyers team for more information here Property Law Enquiries.

Transcript

Hi, my name’s Jess Thomas, I’m an Associate here at OMB Solicitors and today I’ll be providing some advice to our Kiwi cousins across the ditch about purchasing property in Australia.

The first issue I’d like to discuss is the Foreign Investment Review Board approval and whether or not a New Zealand citizen must apply for approval before they enter into a transaction to purchase property in Australia.

The answer is no, a New Zealand citizen does not need to apply for Foreign Investment Review Board approval before entering into a transaction in Australia.

The second issue I’d like to discuss is stamp duty and in particular, Additional foreigners’s acquire duty. Now, Additional foreigners acquire duty is an additional amount of stamp duty imposed on foreign purchases.

The rate of AFAD is currently 7 %, so this is on top of the standard rate of stamp duty that is imposed on a purchaser in Queensland. There are some exemptions to this, however, a New Zealand citizen who holds a special category visa when entering into a transaction is exempt from paying the Additional foreigners acquire duty.

Now, a special category visa is granted automatically to a New Zealand passport holder when they enter Australia. We act for a number of New Zealand clients at OMB and we encourage you to seek proper legal advice before entering into any transaction involving residential land in Queensland.

Small And Medium-Sized Developments and how we can help.

In this video, Property Law Partner and Accredited Specialist (Property Law) Simon Bennett takes us through Small And Medium-Sized Developments

Contact our Gold Coast Lawyers team for more information here Property Law Enquiries.

Transcript

I’m Simon Bennett, Property Partner OMB Solicitors. Today I’m going to talk to you about small and medium sized developments, and when we talk about small and medium sized developments, we’re talking about various options, including land, units, industrial, or anything of that nature.

When I talk about small to medium, it could be a duplex in a residential property, it could be something up to, say, 30 or 40 units, it doesn’t really matter about the size so much. The first thing we look at when we look at a small to medium sized development is the purchase or the acquisition of the land.

Now, this is a key time in that process because we need to contract carefully and we need to make sure that when we contract, there’s appropriate special conditions which protect a buyer to ensure that they can make the appropriate inquiries, carry out the relevant due diligence, and if all of those things are satisfactory, we can proceed with the purchase.

Now, if they’re not, we need the opportunity to be able to terminate that contract with minimal cost to our purchaser. Once we’re satisfied that the contract documentation is satisfactory and will protect us as a buyer, we conduct the appropriate due diligence and subject to that all being okay, proceed to the purchase of the actual site.

Now, that’s an important stage, but the next stage is equally important, which is engaging the appropriate contractors. A developer or a purchaser may decide to do that earlier, but it is important that in doing so, they take recommendations or make appropriate inquiries about getting the relevant experts.

Now, we might be talking about town planners, architects, surveyors, or people in that vein to help us make the relevant inquiries with respect to the land we’re buying, and also to start to plan about the type of development that we may be undertaking.

It’s important we build a strong relationship with those experts, both from a client perspective and from a solicitor’s perspective, because unless the parties are talking and there’s proper communication between everyone, all of the various aspects may not be covered when we’re looking at a development site.

So, we’ve engaged in the contract process, we’ve got our consultants lined up, we’re satisfied with the piece of land and we’ve completed the purchase. What we need to think about now is how we’re going to sell this development, and it’s not quite as simple as a normal sale of an existing property where you can pull out an REIQ contract and effectively fill in the spaces.

With a development, once the appropriate approvals have been obtained, we need to prepare quite a complicated document which we commonly refer to as an off the plan contract. Now, this document has substantial disclosure obligations on the developer, pretty much designed to protect a buyer.

So, in a circumstance where we’re doing an off the plan development, we don’t have a constructed pre-existing item that we’re selling, be it a unit, piece of land, or industrial shed.

So, these contract documents off the plan need to adequately describe not only the type of development, but the inclusions, the specifications, the timing, and things like that to protect the buyer ultimately, and that’s governed by quite restrictive legislation.

So, that purchaser is protected that they will ultimately be sold the product that they think they’re buying. At the moment, we might be selling them a piece of thin air effectively, a concept of what a unit might look like is currently 10 stories up on a block of vacant land, so we need to lock in exactly what we’re going to do.

So that contract is quite detailed, and you’ll need an expert to help you construct that document who will, in conjunction with your body corporate expert, your surveyor, et cetera, get together and produce a suite of documents which will then be provided to a prospective purchaser.

These will include things like creating a body corporate. So, in the instance where we’re building unit or, say, an industrial shed as part of a complex which will be constructed by way of strata titling or body corporate, we’ll have to produce the documentation to disclose how that body corporate will be set up.

The body corporate will involve a community management statement which will set out the lot and interest entitlements of each of the prospective lots. It will set out things like the bylaws, which are the rules and regulations by which people who own a unit or a shed, for example, would be governed.

These are both restrictive and protective of a potential purchaser, and what I mean by that is they will restrict a buyer, let’s say in a unit high rise situation or low rise, that they may not be able to hold parties until two o’clock in the morning.

But it protects your buyer as well because they know that their neighbours can’t hold a similar event and disrupt the living there. They may not also be able to change the external appearance of their unit without body corporate consent, thus protecting the other owners and maintaining the values.

So, these sort of things need to be drilled down on. We also need to set levies, which is the component that a buyer will pay for the ongoing operation of the development that is the body corporate. If there’s no body corporate, there will still be disclosure obligations with respect to, for example, the land with survey plans and the light to be disclosed in those disclosure documents, so these contracts are quite substantial.

Once we get through that and we get through the sales project, what happens at the end of the development? Well, when we get to the end, we’re going to need to pay out your funder because most development projects obviously have finance, we’re going to need to get to settlement.

But before we can do those things, the development is going to have to be approved by the local council and certified and signed off on and the plan will be sealed through council. Those sealed plans then go to the Department of Natural Resources and Mines, who will then attend to the registration of the plan.

At that time, our single piece of land will be subdivided into a substantial number of separate totals, one for each lot, which are then capable of being sold.

Once we get to that stage, the settlement phase is triggered, and as your solicitors would organise the settlements, including adjustments of the price, and then arranging for the payout of your financier. After we get through that settlement phase, your obligations won’t finish.

There is still a general defects period which may be set out in the terms of the contract whereby a purchaser can notify a defects in the premises which would be required to be fixed or attended to by a developer. As a general rule, the contracts will be drafted so that a buyer will conduct an inspection prior to settlement.

But even if there is defects, they can’t delay the settlement, these will be attended to usually in a period of, say, 90 days after settlement by a developer. Once we get through all of the settlements, then our work is largely done and the developer can enjoy the fruits of their labour.

Commercial & Retail Leasing from a Landlord & Tenant Perspective and how we can help.

In this video, Property Law  Partner and Accredited Specialist (Property Law) Simon Bennett talks about Commercial & Retail Leasing from a Landlord & Tenant Perspective.

Contact our Gold Coast Lawyers team for more information here Property Law Enquiries.

Transcript

Hi, I’m Simon Bennett, property law partner at OMB Solicitors. Today I’m going to have a chat to you about leasing, both from a landlord and a tenant’s perspective.

So leasing is the arrangement between the owner of property or the person who has the right to control that property, sometimes a lessee themselves, and a party who takes possession or has the right to use it under an agreement. This agreement usually takes the form of a lease.

It can take the form of a licence or some other tenancy right. So this is what we refer to when we talk about leasing i’m talking generally to you today about what will roughly be referred to as commercial leasing, so that is distinct from residential leasing, which we’re not going to discuss.

The landlord and the tenant both have competing and distinct interests when entering into a transaction of this type. The landlord is concerned about their real asset, their property, and ensuring the value of that is protected and making sure that they secure the income and that they are otherwise protected from the party who’s occupying their building.

Now, a tenant is concerned about getting quiet enjoyment. That is the right to use the property without being interfered with. They’re also interested about how much money they’re going to be paying, and is there any capacity for the landlord to increase that payment?

Is there any additional charges for things like outgoings? Does the landlord have a right to terminate under any circumstances? And we can talk about a couple of those clauses that we need to look carefully for when we’re reading the documents.

But the most important thing that we look at is whether the lease is a retail lease or a general commercial lease, and the reason for that is the different rules apply. So a retail lease is generally a lease of a premises where the business in the premises is a retail business.

Now, those businesses are defined in a schedule to the Retail Shop Leases Act, which is the legislation which governs this area. But there’s another time when a business which isn’t listed as a retail type of business can be caught, and that is where that business is in a premises in a retail shopping centre.

Now, without going into too much detail, a retail shopping centre is generally a centre which has five or more shops of retail nature. So, for example, you could have a business which is clearly not retail, let’s say a legal firm, but it’s in a centre where there are five or more retail shops and the lease of that premises will be caught by the Retail Shop Leases Act and the lease will generally, generally be retail.

So what does that mean? Well, when the Retail Shop Leases Act applies, there’s certain rights and obligations on the parties. For a landlord, there’s disclosure obligations. There’s limitations on what they can and can’t do in the lease and its terms.

For example, a landlord can’t charge certain outgoings under a retail lease that would otherwise be chargeable under a commercial lease. Quite usually, the costs of the landlord are passed on to a tenant for preparing lease documents. But again, under a retail shop leasing arrangement, this can’t be done.

So the landlord will have to bear their own costs. The landlord has other obligations under a retail lease, which will include things like reminding a tenant of when an option comes up. Now, an option is an option on the tenant, usually, to extend the lease for a further period of time. There’s obligations and rights for a tenant under a retail shop lease as well.

The tenant has disclosure obligations and when signing a retail lease, usually the tenant will be required to get independent financial advice and legal advice about the lease. There’s rights attracted to a lease for the tenant as well and those rights are protections around what minimum standards the lease must comply with.

So I’ve already talked to you about the restriction on costs and outgoings being passed. But there’s other restrictions on a landlord regarding, for example, the demolition clause and compensation or relocation clauses and compensation. So this Retail Shop leases Act does provide protection to a tenant.

Under a commercial arrangement, a lot of these protections aren’t in place and the parties are free to contract on terms which are commercial. The main thing to focus on for a landlord, as I alluded to earlier, is increasing or protecting the value of their real property.

So as I indicated, that includes the collection of rent when that’s payable, and what rights they’ve got to increase it. Now, usually rent will be increased on a yearly basis and a specific mechanism for increasing rent will be included in the lease, that could be in accordance with the consumer price index, it could be a set percentage increase, or it could be some other mechanism.

Now, a tenant, as I indicated, is really concerned with their security. They need to know that they’ve got the sole right and exclusive right to use that premises for the period set out in the lease, and if there are options that they can exercise those options without interference for a further term.

They also need to know that they have got an ability to calculate what financially they’re going to be responsible for under the lease. So that will include rent, it could include outgoings, but they need to make sure that it doesn’t include an ability for the landlord to pass on additional costs which may come up, so uncertain costs.

The tenants should also be really careful around demolition clauses, which is a clause giving the landlord the right to demolish the building and terminate the lease early, or alternatively, relocate the tenant from the premise they’re in to some other premises within the building or the complex in the event that it suits the landlord’s interests.

Again, under a retail leasing arrangement, there’s protections in place for a tenant, but these clauses should be read very carefully. Generally, when entering into a commercial or a retail leasing arrangement, both a landlord and tenant should seek expert property law advice.

So that they’re aware of both their obligations and their rights under the documents they’re signing.

Before undertaking Property Law Development we take a look at the many reason’s to seek legal advice and how we can help.

In this video, Property Law  Partner and Accredited Specialist (Property Law) Simon Bennett takes us through the considerations when Undertaking A Property Development.

Contact our Gold Coast Lawyers team for more information here Property Law Enquiries.

Transcript

I’m Simon Bennett from OMB Solicitors, and I wanted to talk to you today about the prospect of undertaking a development, and particularly how OMB Solicitors could help with that development.

So when we talk about a development, it could be a large development, or it could be something as small as a simple duplex, cutting one block into two. There are various types of developments that you could be undertaking.

It could be a land subdivision where you’re just dealing with vacant blocks of land being cut up, it could be dealing with a unit development, either a low rise or a high rise development. It could be mixed use, or we could be talking about a commercial or industrial development.

So there’s a number of steps in the process of undertaking a development, and usually the client would look to identify a block of land as the first stage, and that would involve finding the block of land and making some initial inquiries about its suitability for the development.

Then OMB solicitors would come in and help the client get to a contract. So secure the rights to purchase the property, maybe subject to some conditions, some further inquiries or a due diligence, and we would help them through that process whereby we might look into the title of the property to make sure that there’s no encumbrances or restrictions on the use of that land for the purpose that the client wants.

Things like contaminants, which could prevent or add substantial cost to a development of that land, and any other such items. So getting the right form of contract would be really important, and then undertaking that due diligence from a legal perspective and assisting the client to make sure that that land will be fit for the purpose for which they want to buy it.

Once we get through that stage and the client determines that is the piece of land they want and it’ll be useful for their development, then we’ll proceed with the normal transaction of purchasing the property, including financing or any other requirements right through to a settlement of the land.

So that would be what we would consider the first stage of the process, and then the next stage starts to get interesting because, realistically, with that land, we now need to get some development approvals in place to allow the proposed development, whatever that may be.

This will involve the engagement of a number of experts to help with town planning, surveying, and things of that nature. Once the development approval is obtained, we get to the next really important legal stage, which is drafting the documentation which will allow the land or the units, whatever it may be, to be pre-sold.

These are generally referred to as off the plan contracts, and that term generally refers to the pre-selling of property, land, units, whatever it might be, before there actually built and it’s quite strict and it’s quite detailed what needs to go into these documents, and it’s really important that they’re done correctly because you’re selling a concept or an idea, you’re selling something which yet hasn’t been built.

So in the case of a unit or a high rise, we’re selling a piece of air on a vacant block of land that is going to be turned into a unit and an end purchaser is going to buy.

So the documents really need to be detailed to restrict the seller into building exactly what they’ve told the end buyer that they’re going to build, and there’s a lot of protection placed around the buyer in these documents.

So we’re drafting these pro forma off the plan contracts and depending on the type of development, they’re going to vary greatly, and they’re really important documents, as I said, because if we’ve got a unit development, we’re going to need to draw at the same time a community management statement to create a body corporate for the unit.

So in that situation, there’s levies, budgets, and the like, exclusive use areas to be drafted in, and there may be caretaking and letting agreements as well if there’s management rights involved in that unit complex. For a land subdivision, there won’t be necessarily be a body corporate, so we might not need those things, but we’re still going to need a very detailed disclosure statement setting out exactly what we’re going to develop and the importance of getting these document right, really come at the end of the matter when we’re looking to complete those sales.

So we’re getting those off the plan contracts drafted with all the associated disclosure documentation is a key component. Once we’ve done that, the client will then be able to market for sale and execute contracts for the off the plan development, and as part of that, they’re entitled to take deposits.

Although those deposits are governed, must be held in a trust account until final settlement. So there’s quite a bit of legislation, as I said, governing what must be done on those documents, and if you don’t comply, those agreements just won’t be binding.

Importantly, the Land Sales Act and the Body Corporate Community Management Act are both quite restrictive in what needs to be in those documents. So the developer has been successful in gaining a number of presale contracts. The development proceeds, building approval is obtained, and the building gets completed.

At that stage, we can assist the client with their respective experts to finalise the plans of registration. When they come out of the local authority, they’ll go to the Department of Natural Resources and Mines for registration and a separate title to each of the separate lots is then created.

This is the trigger for the settlement under those off the plan contracts that we talked about and from that point, it’s quite frantic to push and usually on a 14 day period or something like that, get each of the buyers to settlement, and this is where the contracts can get tested and it’s essential that they were drafted correctly at the outset.

Because quite often if the market conditions have changed, let’s say the properties were sold in a strong market, and then the settlements are occurring in a weaker market, some of the buyers may be looking for opportunity not to proceed with those documents.

So it’s really important at the early stages to get them correct, and we would then proceed to hopefully settle all of those contracts and complete the development.

So the process, as you can see, is really from a greenfield site to an absolutely completed development on behalf of the client and it’s a detailed process along the way, but it’s certainly one that we at OMB are familiar with and have helped many clients complete their development successfully over the years.