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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 $5 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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Strata – COVID Stay at Home Orders

Covid stay-at-home orders and what is “at home” for strata lot owners/occupier?

All of you should (or are deemed) to know, there are various health orders currently in-force due to Covid. We often hear the requirements to “stay at home”. But it is a timely reminder to consider again what is a home for strata lot owners or occupiers?

As most strata owners should know, they own the “airspace” insider their unit/apartment but also co-own the entire strata building and the common properties with the other owners as per their unit entitlements. So, is the nice looking patio downstairs a part of your home? Normally, yes. But please, use some common sense, not for covid / isolation purposes! The Parliamentary intention is that people should isolate at home, as much as they can away from other people etc. Good luck!

Matthews Folbigg has experienced strata lawyers that can assist lot owners and strata managers with advice. if you would like to speak with a strata lawyer, please call us on 9635 7966

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NCAT Tribunal and what it can do for you in strata?

We often hear about “NCAT” and “Tribunal” proceedings in the land of strata. Ever wondered what it can do for you? It sounds difficult. But it should not be, really! We know many pretend to be Supreme Court judges in NCAT matters but that is not entirely correct. It can get complicated especially with building, construction and defect disputes etc, but not the everyday nuisances and issues!

In fact, the NCAT application fee for many common strata and community scheme issues is just $107 and lawyers aren’t really meant to be involved in the first place (And here at Matthews Folbigg, we can even draft the points and bundle for you to submit and argue for those simpler issues – being one of our practical options available).

Below is a broad overview of what NCAT can do for you (and what it can’t):

  1. Noise transmission – We have various practical packages to deal with this, before or at the NCAT level. Like anything else, you will need evidence. We will guide you as to what is needed. We recognise the parties are often neighbours. So, we always strive to settle the matter amicably using our specialist negotiation skills without resorting to the Tribunal.

    2. Continue reading…