Property law is the area of law that governs the rights of ownership and and other interests in real estate and personal property. Most commonly, it involves the sale, purchase and transfer of land; the creation of easements and other interests in land; developing and registering plans of subdivisions; commercial and retail leasing; and occasionally, disputes regarding ownership, boundaries or access.
Conveyancing is the transfer and registration of title in property from one party to another. This transfer generally results from:
- the sale or purchase of real estate;
- a family law property settlement;
- the administration of a deceased estate; or
- disposals / acquisitions between family members, trusts or corporate subsidiaries including transferring property into a Superannuation Fund.
Buying residential property essentially involves three stages – pre-purchase investigations, exchange of contracts and settlement. The aim during the conveyancing process is to ensure the new owner obtains clear title, is aware of any interests registered over the land (easements or rights of carriageway), is satisfied with its permitted use and the state and condition of any buildings. This is achieved by conducting various searches and investigations before and after exchange of contracts.
Stamp duty and GST issues should also be considered.
Selling residential property requires owners to have available a marketing contract containing disclosure documents before offering the property to market. As a minimum, this includes a title search and any registered dealings on title, a plan of the land, a zoning certificate from local council, sewer location and drainage diagram.
Strata Title Property
Units in an apartment block, villa or townhouse block are generally owned as strata title. Strata title property comprises land in a strata scheme divided into lots and common property. The legal title to the lot, defined by the cubic airspace and interior surfaces of the walls, ceilings and floor (usually the inside of a unit or apartment and its balcony) is owned outright by the owner. The owner also holds an interest with other lot owners in common property such as entrances, stairways, lifts, gardens and swimming pools and other recreational areas.
The owner of a strata unit automatically becomes a member of the owners’ corporation, which is also often referred to as the “Body Corporate”. This body of people are responsible for managing the strata scheme which involves arranging adequate insurance, repairs and maintenance, keeping records, and appointing managing agents or building managers. The owners’ corporation may also have to deal with issues such as complaints from owners such as noise, car parking or pets or deal with issues regarding neighbouring properties which affect the common property such as the granting of an easement to a neighbour or the placement of a crane by a neighbouring developer which will swing over the apartment building. The owners’ corporation more often than not appoint a Strata Manager to be responsible for managing the strata scheme.
Buying off the plan
Buying off the plan entails purchasing a property that has not yet been built or land, the plan for which has not yet registered. An off the plan purchase may not settle for two to three years after negotiations.
Contracts are usually lengthy and contain many conditions and variables such as a series of completion dates providing a buffer to allow vendors additional time to finish the project and complete the contract. The contract also allows for variances in design, size and finishes subject to permissible limits.
Once the development is completed and the plan registered, purchasers usually have around two weeks to complete.
Buying or Selling at auction
An auction occurs when interested purchasers register to bid publicly for a property. The person or entity with the highest bid, subject to a reserve price, becomes the purchaser on the day of the auction and contracts are immediately exchanged and the 10% deposit is payable. The transaction then proceeds through the usual conveyancing steps.
Auctions are regulated by legislation and the agent conducting the auction must maintain specific records and conduct the auction in accordance with the regulations.
Commercial leases set out the rights between a lessor and lessee regarding the use and occupation of a property. Some commercial leases are classified as ‘retail’ leases by specific legislation. This legislation requires the lessor providing certain disclosures before the lease is entered into. Retail leasing laws also prescribe matters such as minimum lease terms, how rent reviews operate, assignment provisions and mechanisms for resolving disputes.
Leasing disputes may arise when the parties are unaware of their rights and responsibilities, or the lease provisions are ambiguous. Lease disputes also arise when one party does not comply with the provisions of the lease. More often than not this is because the Lessee does not pay the rent or other amounts required to be paid under the Lease. Other common lease disputes involve the Lessor not fixing a problem with the property, the Lessee leaving the premises in disrepair or not complying with their obligations at the end of the terms of the lease by making good the premises.
Crane Oversail Licences
In circumstances where there is a neighbouring development that requires the use of a crane and that crane swings over the neighbouring property a developer needs permission from their neighbours if they want their crane’s jib to be able to swing over their neighbours’ land (called “oversailing”). It is a trespass if a developer allows a crane jib to swing across land owned by an adjoining owner without consent.
Commonly the neighbour and the developer enter into a licence documenting the terms on which the crane is permitted to swing over the land of the neighbour.
The licence should deal with issues such as the term of the licence, the compensation payable by the developer including for legal fees and other necessary consultants’ reports, the times at which the crane is permitted to oversail the neighbouring land, compensation for any damages done to the neighbouring land etc.
Superannuation Fund Business Property Transfers
The custodian trustee company will be the legal owner of the property while the Superannuation Fund trustee is the beneficial owner of the property. The transfer from an owner to a custodian trustee can attract a concessional rate of stamp duty provided various circumstances are satisfied. In addition, the later transfer of the property from the custodian trustee to the Super Fund trustee after the borrowed money has been paid can also attract a concessional rate of stamp duty under various circumstances.