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Phasing out of Certificate of Titles and the expansion of electronic conveyancing

On 11 October 2021, all certificates of title will be cancelled and all dealings will be lodged electronically.

What this means for land owners:

  • No more certificates of title after settlement or after paying off mortgages;
  • The legal remedy for requiring the return of certificates of title from others is abolished;
  • The public cannot lodge dealings on land without assistance from a property lawyer or conveyancer (most are PEXA subscribers).
  • People wishing to lodge a dealing over land must have their identity verified by the PEXA subscriber and must establish their right to deal with their land.
  • Verification of identity involves an in person meeting with the PEXA Subscriber and inspection of identification documents.
  • Establishing the right to deal with land involves providing evidence of ownership (e. g current rates notice, land tax assessment etc).

Short-term letting – Updated Code of Conduct

The Code of Conduct for the short-term rental accommodation industry was updated on 28 May 2021. Landlords providing short term rental accommodation must comply with the Code of Conduct or face penalties of up 1,000 penalty units for corporate owners or up to 200 penalty units for individuals (one penalty unit is equal to $110).
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NSW Supreme Court – When are executed lease documents binding

The recent NSW Supreme Court case of Thorn Australia Pty Ltd v Centuria Property Funds Ltd [2021] NSWSC 1271 highlights the necessity for caution and diligence when executing and exchanging deeds, especially in property matters.

The Court was asked to determine whether a prospective lessee who had signed and delivered deeds to a lessor was bound by the deeds. The Court found that although the lessee executed the deeds, provided a bank guarantee, made arrangements regarding access and making further payments, it was held that the lessee did not objectively manifest an intention to be immediately bound by the deeds.

The parties had entered into a Heads of Agreement which included a statement to the effect it did not constitute a binding lease between the parties and both parties had the right to withdraw from negotiations at any time before the execution of the formal lease documentation. The lessee provided a cover letter enclosing the signed deeds that set out the procedure for execution and the return requirements from the lessor. The procedure required that the lessor send a scanned copy of the deeds to the lessee for perusal and approval prior to exchange of the deeds. As such, the lessee did not authorise the exchange of the deeds until written authorisation was given by the lessee to do so.
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Mandatory Code of Conduct for Commercial Leasing

NSW Government re-introduces the National Cabinet’s Mandatory Code of Conduct for Commercial Leasing

On 13 August 2021, the NSW Gov­ern­ment announced it will rein­tro­duce the Nation­al Cabinet’s Manda­to­ry Code of Con­duct for Com­mer­cial Leas­ing man­dat­ing rent relief for eligible ten­ants impact­ed by Covid-19.

The Retail and Oth­er Commer­cial Leas­es (Covid-19) Reg­u­la­tion 2021:

  • will be extended until 13 January 2022 (previously due to expire on 20 August 2021)
  • requires the lessor to renegotiate the impacted lease with the lessee in accordance to the principles set out in the National Code of Conduct. The Code of Conduct requires landlords to provide rent relief in proportion with their tenant’s decline in turnover. At least 50 per cent of the rent relief must be in the form a waiver, and the balance a deferral.
  • prevents a land­lord from evict­ing or lock­ing out a ten­ant for cer­tain breach­es unless they have first rene­go­ti­at­ed rent and attempt­ed mediation.

The Reg­u­la­tion will apply to com­mer­cial and retail ten­ants with a turnover of up to $50 million who are impacted lessees, that is, they qualify for the COVID-19 Microbusiness grant, COVID-19 Business Grant or JobSaver Payment.
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Phasing out of Certificates of Title and the expansion of electronic conveyancing

Every day we read about the property market in Australia. Often it is about housing affordability, defects in high rise residential developments or the relentless impact of technology on the way we do business in this sector.

In this month’s article we cover some of the recent changes to property law in NSW and what impact they will have

Phasing out of Certificates of Title and the expansion of electronic conveyancing

On 11 October 2021, all certificates of title will be cancelled and all dealings will be lodged electronically over an electronic property dealing lodgment network such as PEXA. PEXA is an electronic conveyancing platform, which at present, is the most widely used electronic lodgment network in NSW. It has recently listed on the Australian Stock Exchange.

What this means for land owners:

  • No more certificates of title after settlement or after paying off mortgages.
  • The public cannot lodge dealings on land without assistance from a property lawyer or conveyancer.

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Building defects in strata buildings and the legislative safeguards

Building Defects and Part 11 Protections for Strata Owners

We have previously written an article about the new duty of care protection in favour of property and strata owners, which is available under the new Design and Building Practitioners Act 2020 NSW (DBPA). Basically, it establishes a new duty of care against various building practitioners, retrospectively, covering losses arising from the last 10 years or so. However, that is not the only remedy available (of course). The issue of building defects have been around for a very long time and the legislation have been changing constantly, especially for strata buildings.

For example, the 2% developer bond and inspection scheme has been in operation since 1 January 2018 under Part 11 of the Strata Management Scheme Act 2015 (NSW). In fact, it was written into the 2015 Act when it first commenced. On 1 July 2020, there was another round of amendments to the scheme.
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COVID-19 Contracts and Frustration

Contracts and Frustration by COVID-19- Important decision  

Recently, the New South Wales Supreme Court (NSWSC) in Dyco Hotels Pty Ltd v Laundy Hotels (Quarry) Pty Ltddecided that a contract for sale was not frustrated by pandemic trading restrictions.

Lockdown and trading restrictions imposed by the government in response to COVID-19 has inevitably given rise to parties in sale contracts to claim frustration when a business or commercial venture is impacted. In order for a contract to be frustrated, the frustrating event must give rise to a “fundamental commercial difference” between contemplated and actual performance or to a “fundamentally different situation” arising for which the parties made no provision “so much so that it would not be just in the new situation to hold them bound to its terms” (Davis Contractors Ltd v Fareham Urban District Council [1956] AC 696 at [64]).

Background             

Very briefly, the parties entered into a contract for the sale of a freehold hotel property in Pyrmont together with a hotel licence, gaming machine entitlements and hotel business.
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Frustrated Leases

Frustrated leases – Important recent case for Landlords and Tenants

Recently, the New South Wales Supreme Court (NSWSC) in Gazcorp Pty Ltd v Woolworths Ltd [2021] NSWSC 308 demonstrated that whether a lease is frustrated by changes in planning laws or approvals should be carefully considered in each case.

Until Gazcorp v Woolworths, the courts had generally only declared in dictum that the doctrine of frustration applies to leases as it does contracts (Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd; Willmott Forests Ltd (rec and mgrs. Apptd) (2012) 91 ASCR 182 at [41]).

Background

Briefly, between 2004 and 2008, the owner (Gazcorp) of land suitable for development held negotiations with a potential lessee (Woolworths) about a lease space in the proposed development. In 2008, Gazcorp entered into an agreement for a lease with Woolworths which was varied a few months later. The parties disagreed as to the extent of the variation. Gazcorp alleged that the agreement for lease was varied to include Big W in addition to Woolworths. Woolworths claimed that the variation was only in relation to some dates and not the inclusion of a Big W store.
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Construction Laws in Strata Communities

Construction laws and processes affecting strata and community schemes

Recently, we have received various enquiries about construction laws, proposed design and construction contracts and building contracts especially those affecting strata schemes. Basically, complex construction works are needed to be done involving the owners/developers (more commonly called Principals in the realm of construction laws), architects, builders, subcontractors, surveyors, superintendents etc. What do all these mean? We cover some of the basic issues below.

The construction industry broadly involves 3 categories of works:

  1. Construction works (yes, you guessed it);
  2. Design and construction works; and
  3. Project/construction management.

Construction works

This is distinct from design and construction works in that construction is conditional upon the prior provision and settlement of the design. The Principal would engage an architect or a design team to prepare and provide detailed project design documentation including drawings and specifications. Then, the Principal would engage a builder separately to complete the design (who would usually sub-contract out various parts of the works including the necessary supplies). So, basically, the Principal would enter into an architectural agreement with an architect or architectural firm and then a building/construction contract with the builder. Depending on the complexities of the arrangement, the Principal would engage a superintendent to administrate the building contract. The role and scope of the superintendent works can be defined in the building contract. Sometimes, the superintendent can issue directions on behalf of the Principal. In other instances, the superintendent can have a certification role (however, please be mindful about a potential conflict as the certification requirements may need to be independent).
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