We recently sat down with Michael Osborne, Principal, Osbornes Lawyers, to discuss his thoughts on common issues practitioners need to be mindful of in conveyancing practices. Michael will be chairing Session 2: Surveying, Planning, Managing Disputes and Updates of the upcoming conference, A Practical Guide to Critical Conveyancing Issues, taking place on Wednesday 4 September 2019.
What’s something that practitioners should keep in mind related to the new mandatory disclosure regime for off the plan contracts?
One issue to be aware of will be the extent to which practitioners need to supervise the adequacy of disclosures from developers. Some developers will no doubt be open to close supervision while others will be less receptive to such oversight, so practitioners will need to be mindful of how much developers listen with respect to disclosures and their liability in that regard.
Are there any new legislative reforms impacting conveyancing that practitioners need to have on their radar?
The big one is what the Government will do about certification and the quality of buildings. Obviously, something will happen soon, but it’s up in the air at the moment.
What’s a common misunderstanding some people have related to selling and purchasing apartments?
When selling or purchasing an apartment, it’s important that practitioners emphasise to both sellers and buyers that they’re not only buying and selling real estate, but also participation in the strata scheme. Thus it’s essential that due diligence on the scheme is completed as part of the selling process.
What are some of the advantages or disadvantages of various ways of purchasing property, such as through trusts, SMSFs or corporations?
Because of the way property ownership is taxed, the overwhelming way people purchase residential property is in their own name. One thing worth noting is that buying in the name of an SMSF has fallen off a lot in recent years, a process which has always had its own unique complexities. Lenders are far less keen on buyers purchasing property through an SMSF. The industry may revisit that in the next few years to see if there might be more activity in that space.
What are some aspects of survey and title issues that are sometimes overlooked or misunderstood?
It’s fair to say that surveys for residential land are much less common today than 20 years ago. Practitioners often don’t seem to think it’s as necessary as it once was to attach them, which is probably a reasonable view for established residential blocks in the metropolitan area. However, with strata plans it’s key that the strata plan is inspected carefully by the buyer and the seller so that it’s clear what’s being sold.
Regarding title, practitioners may look at schedule 2 affectations and find on the common property certificates of title multiple entries involving hundreds of pages of documents. In those circumstances, it’s important that practitioner go through the listings and work out within those affectations what needs to be investigated and what doesn’t. For examples, if there are multiple easements in a complex building that’s subject to various strata plans practitioner don’t (and wouldn’t) be able to investigate those entries. But where the practitioner finds for example restrictions of use then that’s something that the practitioner can and should look into further.
What’s an initial step you take when a property transaction will likely deal with a significant environment or planning issue?
If a transaction has anything to do with contamination, the practitioner should stop and take careful stock of the situation, think about the prior use of the property, consider the extent to which the situation needs to be investigated, and formulate a plan for doing so.
What’s a good strategy to keep in mind when a dispute arises over a property transaction?
Keep your own ego out of it and remember that in most cases all the client wants is a solution.
Michael Osborne, Principal at Osborne Lawyers, is an accredited property specialist, chair of the Advisory Committee for the Law Society of New South Wales for the specialist accreditation scheme in property, a member of the Property Committee of the Law Society. Michael has extensive practical experience in most aspects of property law, including options, sales, acquisitions, strata and community title, and commercial and retail leasing. He particularly specialises in property development – structuring and documenting the acquisition and sale of the site and the associated work: joint venture or shareholder agreements, building contracts, development management agreements, financing and security, leasing, advice on stamp duty and GST, and off the plan sales. In the period 2011 to 2013, Michael served as a member and alternate chair of the Minister for Fair Trading’s Experts’ Committee on retirement village contracts to draft the standard retirement village contract. That document is now comprised in schedule 2 of the Retirement Villages Regulation 2009.