10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED - PART 7 - WORKING WITH YOUR LENDER

10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED

Part 7 – Working with your lender

Sydney-based legal practice Ross Anderson Lawyers will assist you to avoid or minimise complications which arise when purchasing real estate. We helped many of our clients to avoid multiple pitfalls in the process and now ready to share our knowledge with you.

WORKING WITH YOUR LENDER

In our previous publication we discussed why is it necessary to obtain various property certificates and how would the final purchase price be adjusted.

If you have been working proactively with your mortgage broker or your lender directly, some 1-2 weeks before the settlement date the lender will contact your conveyancer by a fax or an email message and will provide a letter which would contain an amount of funds which you borrowed from that lender and which are available for a purchase of your property.

This is the end result of your involvement in borrowing process which would enable us to instruct the lender to provide funds for settlement.

To get to that end however you hopefully worked with your mortgage broker or your lender directly in advance, read their Product Disclosure Statement (PDS), asked questions, obtain answered and hopefully received an independent financial and/or legal advice on your loan.

The lender has probably conducted a valuation of the property you are purchasing for loan to value considerations.


The lender by then has already contacted us to request some documents which are required for your loan application, such as a copy of your contract and transfer, and we provided them.

What can possibly go wrong? You need to make sure that you know well in advance how much of available funds your lender can provide to you, that is funds net of fees, charges, stamp duty on mortgage (if any) etc.

If you are short on funds, you need to have saved enough already to cover the shortfall, otherwise you may need to ask the vendor to delay the settlement and face up to 10% p.a. penalty interest daily until that date when you are in the money and ready to settle.

Conclusion: sit down with your mortgage broker and discuss how much you can borrow, what savings do you have and remember that final purchase price may be adjusted up for several hundred to several thousand dollars. Do not end up in default of the contract because you miscalculated your budget.

You can read our previous publications here.

Ross Anderson Lawyers provides residential and commercial conveyancing services. Please visit our conveyancing website for more information:

Contact Andre Petrov of Ross Anderson Lawyers to discuss your conveyancing matter today.

Mortgage Broker “In Advance Financial Management” will assist to obtain a home loan suited to your needs. Call Boris Glushankov on 0411 835 071 to get a great deal on your mortgage.

(c) All rights reserved. This and any other publications by Ross Anderson Lawyers are copyrighted. Reproduction, copying and commercial use is prohibited unless expressly authorised by Ross Anderson Lawyers.

10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED - PART 6 - PROPERTY ENQUIRIES

10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED

Part 6 – Property inquiries

Sydney-based legal practice Ross Anderson Lawyers will assist you to avoid or minimise complications which arise when purchasing real estate. We helped many of our clients to avoid multiple pitfalls in the process and now ready to share our knowledge with you.

PROPERTY INQUIRIES

In our previous publication we discussed obtaining finance for your purchase and pointed out the importance of working with your mortgage broker to have it ready by settlement.

As you are completing your loan application forms provided to you by your broker (or directly by lender), there is much going on behind the scenes.

Your solicitor or conveyancer orders multiple documents (also called certificates) with the purpose of determining what money is owed on the property by the vendor and to prepare a document called settlement adjustment sheet.

The document sets out the agreed price of the property, the amount you have already paid to vendor’s agent as a deposit, and then adds or deducts amounts owed by the vendor by way of council rates, strata contributions, water rates and in some cases, land tax levies.

This is done to ensure all payments are accounted for and apportioned to each party depending on where the proposed settlement date fits into various payment periods.

These certificates will cost several hundred dollars (at the time of writing of this article) and the cost of them may need to be paid by you on top of conveyancing fees quoted to you in the beginning of the matter. These costs are called disbursements and your solicitor by now would have explained and quoted them in.

Inevitably, the final price you would be required to pay for the property will change because of these adjustments. The difference between what you thought the price was and what you would be required to pay could be several hundred dollars or more.

Needless to say, you should have enough funds either saved or borrowed to finance that difference in price.

Conclusion: read the settlement adjustment sheet provided to you by your solicitor or conveyance carefully, ask for explanations and budget for more funds that you expected to pay.

Ross Anderson Lawyers provides residential and commercial conveyancing services. Please visit our website for more information.

Contact Andre Petrov of Ross Anderson Lawyers on 1300 86 16 76 or email us to discuss your conveyancing matter.

Mortgage Broker “In Advance Financial Management” will assist to obtain a home loan suited to your needs. Call Boris Glushankov on 0411 835 071 to get a great deal on your mortgage.

(c) All rights reserved. This and any other publications by Ross Anderson Lawyers are copyrighted. Reproduction, copying and commercial use is prohibited unless expressly authorised by Ross Anderson Lawyers.

10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED - PART 5 - ARRANDING FINANCE

10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED

Part 5 – Arranging Finance

Sydney-based legal practice Ross Anderson Lawyers will assist you to avoid or minimise complications which arise when purchasing real estate. We helped many of our clients to avoid multiple pitfalls in the process and now ready to share our knowledge with you.

ARRANGING FINANCE

In our previous publication we discussed cooling off period and suggested that that grace period is used to undertake due diligence checks and arrange finance.

Having said that it may not be possible to obtain a formal approval for finance within that time, even if the vendor would allow for extension of cooling-off period for a few days more.

Finance, which most of the time comes in a form of a home loan, secured on the property you are proposing to purchase, is a domain of specialists called mortgage brokers, and we simply note from our experience that lack of finance is an expensive misfortune or mistake some purchasers make (unless of course it is a “cash sale” with no money borrowed).

A contract for sale and purchase of property usually contains provisions drafted by vendor’s solicitor which require purchaser to pay penalty interest and vendor’s legal costs in the event that settlement is delayed due to lack of finance.

In some cases vendor may issue a “last warning” Notice to Complete which would provide purchaser with 14 days to settle the property.

Conclusion: obtaining finance is an important step in conveyancing transaction.
Ross Anderson Lawyers provides residential and commercial conveyancing services. Please visit our website for more information.

Contact Andre Petrov of Ross Anderson Lawyers on 1300 86 16 76 or email us to discuss your conveyancing matter.

Mortgage Broker “In Advance Financial Management”  will assist to obtain a home loan suited to your needs. Call Boris Glushankov on 0411 835 071 to get a great deal on your mortgage.

(c) All rights reserved. This and any other publications by Ross Anderson Lawyers are copyrighted. Reproduction, copying and commercial use is prohibited unless expressly authorised by Ross Anderson Lawyers.

10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED - PART 4 - COOLING OFF PERIOD

Part 4 – Cooling off period

Sydney-based legal practice Ross Anderson Lawyers will assist you to avoid or minimise complications which arise when purchasing real estate. We helped many of our clients to avoid multiple pitfalls in the process and now ready to share our knowledge with you.

COOLING OFF PERIOD

In our previous publication we discussed payment of holding deposit to agent.

What happens next? The statutory cooling off period which usually lasts for five business days.

What happens during that period? Well, it is a question of due diligence and what purchaser is ready to invest in for a piece of mind.

Essentially, this time may be used by the purchaser’s solicitor to order a strata report (if the property is a lot in a strata scheme), a pest and building report (if the property is a free-standing home, a villa or a townhouse) and other reports, which are less frequently made.

Ross Anderson Lawyers always recommends its clients to invest in these important inspections, because they may reveal something which may persuade the purchaser to change their mind on the purchase, or budget for further expenses in the future.

Examples include:

• strata report revealing special levies (thousands of dollars each year per unit) struck by owners’ corporation to finance a legal firm to sue a contractor who was negligent in repairing the block of units;
• strata report revealing special levies (tens of thousands of dollars each year per unit) struck by owner’s corporation to defend a claim by owner of one strata lot suing owners corporation for failing to maintain waterproofing of the roof causing damage to one lot;
• building inspection revealing major building damage beyond normal wear and tear, or fire hazard from insulation located close to powerful down-lights in the ceiling of a house.

We believe that even if a house is fairly new, purchasers will benefit from knowing that there may be defects which previous owner chose not to fix and which are not covered by home warranty; and in case of a recently built strata unit, there could be special levies collected to cover for unforseen expenses and borrowings.

One other interesting aspect of ordering a strata report is that it could reveal a history of bad behaviour by a trouble-making tenant (or owner) disrupting peaceful life of a whole block (but only if owners corporations recorded that in minutes of their meetings and inspector could obtain those minutes).

While solicitor is organising these important checks, purchaser should actively work with his or her mortgage broker to try and obtain a formal approval of home loan finance, to be confident that lender will provide funds for purchase.

Conclusion: cooling off period should be used to order property inspection reports and obtain finance approval for purchase.

Ross Anderson Lawyers provides residential and commercial conveyancing services. Please visit  our website for more information.

Contact Andre Petrov of Ross Anderson Lawyers on 1300 86 16 76 or email us to discuss your conveyancing matter.

Mortgage Broker “In Advance Financial Management” will assist to obtain a home loan best suited to your needs. Call Boris Glushankov on 0411 835 071 and mention this post to get a best deal on your mortgage.

(c) All rights reserved. This and any other publications by Ross Anderson Lawyers are copyrighted. Reproduction, copying and commercial use is prohibited unless expressly authorised by Ross Anderson Lawyers.

10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED - PART 3 - PAYMENT OF DEPOSIT

10 Mistakes When Purchasing a Property Which Can Be Avoided

Part 3 – Paying holding deposit.

Sydney-based legal practice Ross Anderson Lawyers will assist you to avoid or minimise complications which arise when purchasing real estate. We helped many of our clients to avoid multiple pitfalls in the process and now ready to share our knowledge with you.

HOLDING DEPOSIT

Our clients often ask us questions about when, how and to whom is a holding deposit paid?

Pursuant to standard conditions of 2005 Contract for Sale of Land, used by vast majority of solicitors and conveyancers in NSW, purchasers pay to  a selling agent a holding deposit in the amount of $0.25 of the agreed purchase price.

This deposit is so called because it is “held” by selling agent and it is paid usually in the agent’s office on a date of signing of the contract of sale by a purchaser.

It would be useful to remind that by that time a purchaser should already have some funds, at the very least sufficient to cover the following expenses:

1.         Up to 10% of the purchase price to be used as a deposit for the property;

2.         To pay stamp duty (at the time of this publication Office of State Revenue  provides a calculator on their website);

3.         To pay your solicitor or conveyancer’s fees and disbursements, as well as extra services, such as strata report, building report etc.;

4.         To pay for your removal costs, connect electricity, gas, internet etc.

Conclusion: holding deposit is paid at the time of signing of the contract; have sufficient savings to pay for other fees, taxes and expenses

Next: In our next publications you will discover how to organise finance and sign the contract.

Ross Anderson Lawyers provides residential and commercial conveyancing services. Please visit  our website for more information.

Contact Andre Petrov of Ross Anderson Lawyers on 1300 86 16 76 or email us to discuss your conveyancing matter.

Mortgage Broker “In Advance Financial Management” will assist to obtain a home loan best suited to your needs. Call Boris Glushankov on 0411 835 071 and mention this post to get a best deal on your mortgage.

(c) All rights reserved. This and any other publications by Ross Anderson Lawyers are copyrighted. Reproduction, copying and commercial use is prohibited unless expressly authorised by Ross Anderson Lawyers.

10 Mistakes When Purchasing a Property Which Can Be Avoided - Part 2 - Making Amendments to Contract for Sale

10 Mistakes When Purchasing a Property Which Can Be Avoided

Part 2 – Making amendments to contract for sale

Sydney-based legal practice Ross Anderson Lawyers will assist you to avoid or minimise complications which arise when purchasing real estate. We helped many of our clients to avoid multiple pitfalls in the process and now ready to share our knowledge with you.

MAKING AMENDMENTS TO CONTRACT FOR SALE

As you are engaged in price negotiations with the real estate agent or questioning him or her on various aspects of the property, you should ask your lawyer or conveyance to check the contract for sale which was given to you by an agent.

Many agents advertise open houses on Saturdays to attract more potential buyers.

Ross Anderson Lawyers often receive phone calls from potential clients right after open house asking to review the draft contract. Indeed, by Monday morning when the agent opens his office, the clients are already advised on provisions of contract and risks.

The thing is, the contract for sale was drafted by a lawyer or conveyance, instructed by a vendor, (hopefully) within the legislative provisions on conveyancing, however taking into account needs and wishes of their client, not you the purchaser. If, for instance, there are some issues with the property which the conveyance knows about, the contract would tend to minimise vendor’s inconvenience and risks accordingly.

Approximately in 7-8 occasions out of 10, we, having looked through the draft contract, recommended to our clients to instruct us to write to the vendor’s lawyer or conveyancer to amend certain provisions, in order to balance it to the purchaser.

Approximately in 50% of occasions, the vendor approved the amendments. Needless to say, in the event that the amendments were not approved, our clients at least were aware of their risks before making a deposit and therefore made an informed decision.

Conclusion: ask your lawyer to look through the contract after the open house.

As always, we remind that we at Ross Anderson Lawyers provide conveyancing services and the details could be obtained on our website.

Contact Ross Anderson Lawyers on our phone line at 1300 86 16 76 and email us.

Mortgage Broker “In Advance Financial Management”  will assist to obtain a home loan best suited to your needs. Call Boris Glushankov on 0411 835 071 and mention this post to get a best deal on your mortgage.

10 Mistakes When Purchasing a Property Which Can Be Avoided


Part 1 – Negotiations with real estate agents


Sydney-based legal practice Ross Anderson Lawyers will assist you to avoid or minimise complications which arise when purchasing real estate. We helped many of our clients to avoid multiple pitfalls in the process and now ready to share our knowledge with you.



NEGOTIATIONS WITH AN AGENT


With all due respect to real estate selling agents who deal with tens of potential purchasers, having no or almost no experience in purchasing property...purchasers are reminded of a Latin phrase “Caveat Emptor” which means “Buyer Beware”.

In your negotiations with an agent it always recommended to ask questions about various aspects of the property you are targeting and also seek an opinion of your lawyer or conveyance if the answers the agent gave did not satisfy you.


The thing is, from our experience, when reviewing draft contract for sale given to our clients by agents we most invariably found there a clause which reads approximately the following:


“The purchaser agrees that the only representations about the property are those contained in this contract”.



Conclusion: contact your lawyer early, when making enquiries with a real estate agent


As always, we remind that we at Ross Anderson Lawyers provide conveyancing services and the details could be obtained on our website.


Contact Ross Anderson Lawyers on our phone number 1300 86 16 76 and email us.


Mortgage Broker “In Advance Financial Management” will assist to obtain a home loan best suited to your needs. Call Boris Glushankov on 0411 835 071 and mention this post to get a best deal on your mortgage.

“Workplace” clarified by sexual harassment case

Industrial relations

  “Workplace” clarified by sexual harassment case

 In a recent decision, the Federal Court held that the term “a workplace” is broad and may include a range of venues and locations, depending upon the surrounding circumstances and the conduct of workplace participants.

A recent decision of the Federal Court of Australia is a reminder to employees and employers of the need to keep professional and personal relationships separate. In E. v V. (No. 3) [2013] FCA 1311, an employee was awarded $476,163 for sexual harassment by a fellow worker, making it one of the largest court-ordered sexual harassment awards.

The case also provides clarification on the meaning of “workplace” in the Sex Discrimination Act 1984 (Cth) (SD Act), giving the term a potentially broad definition.

Justice Blomberg's judgment contains detailed record of events, beginning at 97 and discussion of damages at 597:

http://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2013/2013fca1311#_Ref374004070

“The article is published with permission of Law Society of New South Wales. Copyright (c) Law Society Of New South Wales – Client Newsletter, 2, 2014.”

Contact Solicitor Andre Petrov at Ross Anderson Lawyers if you require assistance with a work-related issue. Ross Anderson Lawyers is a Sydney-based general legal practice.

Please feel free to check our website http://www.rossandersonlawyers.com.au/ for details or visit us on Facebook: https://www.facebook.com/rossandersonlawyers?ref=hl and click Like or Follow.

Overseas posting not a right

MULTINATIONALS’ OBLIGATION TO REDEPLOY

"A Fair Work Commission decision sheds light on the obligation of multinational companies to consider overseas employment for employees affected by redundancy.

The commission found the failure of a multinational company to redeploy an employee who was made redundant into an overseas position was not unfair.

The company, part of a multinational employer group, was found to have complied with its obligation to consider reasonable redeployment options, even though it declined to place an employee in an available position overseas when it made employees in its Brisbane office redundant.

The commission found that only after considering basic questions about a company’s structure, such as whether it has a formal overseas relocations policy and central management control over the relevant overseas office, need the task of assessing an employee’s skills, experience and qualifications against available positions be undertaken.

At any given time there may be a number of vacancies in a firm’s overseas offices. This decision establishes that it will only be necessary to consider international options for redeployment in certain circumstances. A number of other factors which the commission said need to be considered include the costs of relocating an employee from one country to another and training to fit relevant job requirements or gain necessary language skills."

“The article is published with permission of Law Society of New South Wales. Copyright (c) Law Society Of New South Wales – Client Newsletter, 1, 2014.”

Contact Principal Solicitor Andre Petrov at Systema Lex  if you require assistance with a work-related issue. Systema Lex is a Sydney-based general legal practice. Please feel free to check our website http://www.systemalex.com.au for details.

ACCC wins by forfeit in the first unfair contract terms case

ACCC wins by forfeit in the first unfair contract terms case

"Unfair terms and conditions will not be tolerated under the consumer watchdog’s unfair contract term rules.

The Australian Competition and Consumer Commission (ACCC) has chalked up its first win on a case solely arising from the unfair contracts terms rules, with internet service provider ByteCard quickly capitulating and consenting to declarations that its terms and conditions (T&Cs) were unfair.

The rules target industries with a reputation for locking customers in to dodgy contracts, like mobile service providers, airlines and gyms. They caused a stir when they were introduced, threatening to be a serious weapon for consumers and an equally serious headache for businesses. Marred with vague terms like ‘fairness’ and ‘legitimate interests’, it’s sometimes a challenge to assess whether contracts are compliant.

Unfairness in ByteCard’s T&Cs arose because they:

• allowed ByteCard to vary prices without notice, and without giving consumers the opportunity to negotiate or the right to terminate;
• included an indemnity from its customers for, well, anything. It wasn’t even limited to losses arising from the customer’s actions; and
• permitted ByteCard to terminate any account at any time without cause or reason.

For ByteCard, the case cost $10,000 towards the ACCC’s legals, the cost of its own legals, and, most importantly, the damage to its reputation. It could also face damages claims from customers who were adversely affected by the unfair terms.

The kinds of clauses targeted in the case aren’t peculiar to internet service providers. The common thread to the terms in question are that they are one-sided, wide reaching, vague or are internally inconsistent.

It’s fair to assume that these kinds of clauses will remain of most concern to the ACCC.

In short, the ACCC is done with friendly approaches. Enforcement of the unfair contract terms rules is now a priority."

“The article is published with permission of Law Society of New South Wales. Copyright (c) Law Society Of New South Wales – Client Newsletter, 4, 2013.”

Contact Principal Solicitor Andre Petrov at Systema Lex  if you require assistance with a consumer contract issue. 

Systema Lex is a Sydney-based general legal practice. Please feel free to check our website http://www.systemalex.com.au for details.