Frequent Questions

You should approach this decision in the same way you would approach the decision to make a valid will; its about catering for unpleasant possibilities that you can’t fully contemplate now, but doing so in the interest of your loved ones and yourself.

We all know or know of people who have lost the ability to manage their own affairs and make basic decisions about their lives, whether through mental or physical infirmity, misadventure, and so on.

It will not happen to everyone, of course, but there remains the possibility that it could still happen to you. For example, the increasing incidence of mental infirmity in old age make it increasingly likely that many of us will, at some point in our life, lose the ability to make decisions for ourselves.

Often, when this happens, family members are unsure of how to best care for the infirm and may have very different ideas about how it should be done.

An enduring guardian, appointed by you, will make decisions about how you live, in the event it happens to you.

You can be selective as to what control you want them to have; you may not wish to allocate complete responsibility to one person but several, or may not want anyone to make certain decisions for you. As long as you are of sound mind, you can reverse or modify the appointment of an enduring guardian.

There are several things an enduring guardian cannot perform under any circumstances, such as financial or legal decisions  – these are the responsibility of one’s power of attorney.

Like making a will, appointing an enduring guardian is something you do for the loved ones around you who may one day be faced with this situation.

Unlike writing a will, however, this is also something you can do for yourself. An enduring guardian makes lifestyle decisions and can deal with other very personal matters. By appointing someone now, you can still exercise some control over how you will live later and the decisions that are made for you. If you lose the ability to decide, it is important to have someone – or several people – who you can trust to make the right decisions for you.

A will, often called a ‘last will and testament’, is a document written by an individual (the ‘testator’) stating what will happen to all his or her monies, property and other assets (collectively called ‘the estate’) when he or she dies.  In that will, he or she appoints an ‘Executor’ – usually a family member or friend – to carry out the wishes stated in the will after death.

It is very important that you write a will.  Otherwise,  you will have no say over what happens to your estate when you die. It will be distributed by the law through an ‘Administrator’. This distribution will occur according to a list of persons determined by law – and not to who you think most deserves it. In fact, the list of  recipients – called ‘beneficiaries’ – may be entirely against your wishes, if you leave it to the law to deal with your estate.

It is also the only way you can ensure that the arrangements for your spouse and children that you believe are necessary, will be carried out.

It also provides a strong reassurance, to those that matter, that they were appreciated by the friend or family member that has passed away. The alternative – leaving it to the law to distribute an estate – is a much more anonymous and impersonal process.

A will is a very important but complex document. It has to meet many legal requirements and follow certain forms. It must be able to withstand both legal challenges and the tumultuous period of bereavement experienced by the family and friends left behind.

However, as complicated it may seem, writing a will is the wisest thing anyone can do to avoid unnecessary pain and confusion for loved ones. The legal advice provided by a solicitor can simplify the process enormously.

An Executor is the person appointed in another person’s will to dispose of the monies, property and other assets listed in that will, after the death of its author.

An Executor has to follow both the deceased’s wishes and numerous legal requirements when disposing of that estate.

It is not simply a case of handing out the deceased’s monies and other belongings among the beneficiaries listed in the will.  An Executor will probably also have to search for every financial, property or other asset that the deceased may have owned because these things may not all be listed in the will. Even if they are not listed, they must still be located and disposed of to the advantage of the beneficiaries. Even more likely, he or she must catalogue every miscellaneous items the deceased possessed, no matter how numerous or small.

Achieving all of these things requires patience, attention to detail and awareness of the law.  The law requires the Executor to follow a rigid list of things to do, in order for his or her actions to be regarded as valid and above challenge.  It is often an emotionally charged and highly pressured task and the assistance of a solicitor is often necessary.

These are a few examples of the responsibilities an Executor will face:

• obtaining a Grant of Probate from the Probate Registry of the Supreme Court;
• keeping accounts of every expense incurred in disposing of the estate;
• ensuring that the condition of the deceased’s assets and other property are maximised at all times;
• deciding the best way to dispose of an asset, in the best interests of the beneficiaries;
• placing a Notice of Distribution;
• determining if he or she, as Executor, is entitled to some form of payment;
  and so on.

In addition, an Executor owes a ‘duty of care’ to the beneficiaries of a will; this means he or she will be liable for anything that goes wrong and must always be available to the beneficiaries, whose interests the Executor is required to protect.

The role of Executor can be a full time commitment and requires a high level of responsibility.

The simple answer is that it is never too early or too late to make a will, but the best time is NOW.

Everyone of adult age should have a will. Many people delay the matter until they retire.  Many don’t even do that much because, at any age, who wants to contemplate death?

However, these approaches defy the simple fact that life can be very random and the whole point of having a will is to be prepared – not for yourself, but for friends and loved ones. The decision should not be influenced by how much or how little you have; the quantity or value of your belongings is not the point.

What is also important is that the will is written properly and as up to date as possible.

You should certainly write your will – or, if you already have one, update it – whenever there is a personal or financial development in your life.  Marriage, separation, divorce, or remarriage, employment or redundancy, buying or selling a home or business, the birth or the death of loved ones, changes in your children’s circumstances, changes to estate laws – all these developments necessitate a will and, just as importantly, the periodic revision of that will, to make sure it still accurately reflects your relationships and intentions.

You should always have a plan to deal with those times when you are not able to manage your personal business affairs – be it temporary or in the event of infirmity or tragedy.  For this reason, it is wise to appoint a ‘power of attorney’ who will manage your property and financial matters when you are unable to manage them directly or are incapable of managing them at all.

There are three kinds of power of attorney.  In each case, you must appoint someone – or revoke their appointment – when you are mentally capable of making this decision and the appointment must be accepted by him or her.

A solicitor can help you decide the best approach for you and help you make the right choice for the job. You can even appoint a solicitor to the position when you don’t want to burden family or friends.

General power of attorney
This power is most useful when you are overseas, in hospital or otherwise unavailable to make property and financial decisions.  The power expires the moment you lose mental capacity so it is not susceptible to exploitation in the event  you are unable to revoke the appointment.

Enduring power of attorney
You should appoint someone as your attorney as enduring to cover the situation in the event you are permanently rendered incapable of making property or financial decisions due to physical or mental infirmity, including old age.  You should go to the trouble of making this appointment as it is quite separate from your ‘enduring guardian’; each appointment has completely different sets of responsibilities.

Like making a will or appointing an enduring guardian, this decision is based on a unpleasant future possibility and its one many people never make. However, like those other examples, it is something you should do, both for yourself and for your loved ones.

Alternative power of attorney
It is wise to appoint an alternative power of attorney who will take over the responsibility in the event your primary appointment is rendered incapable of performing the function.

Anyone can write their own will or they can do so with the assistance of a solicitor specialising in wills.

Sometimes, people attempt a ‘homemade’ will without any guide or assistance but such documents often do not follow correct legal form nor withstand legal scrutiny; there are many formalities that a valid will must follow and legal assistance is really the best way to adhere to these.

There are also many ‘do-it-yourself’ will kits that offer a straightforward, low-hassle process with a minimum of fuss.

However, your particular circumstances may require the more detailed attention of a solicitor, in order to form a customised will that best suits your needs and stands up before the law. Remember, if your will is not correct in every respect your wishes may not be followed.

A trained solicitor, helping you each step of the way, will identify all your physical and financial assets and other property and construct a will with an eye on the many tax and legal considerations you will have to consider. He or she may even be able to help you identify the best way to distribute your assets among your loved ones. A solicitor can ensure your will conforms to the law, maximises your assets to the advantage of your beneficiaries and provides a clear statement of your intentions to your friends and family. A solicitor can also be appointed the Executor of your will, if you do not want to burden a friend or family member with that responsibility, or they can help you select the most suitable person for that task.

Paying a solicitor to do the job may seem like a luxury you can not afford but it may actually save you or your estate money by avoiding unnecessary expenses that may be incurred by an ambiguous or poorly structured will.

When someone dies without a will, he or she dies ‘intestate’. In each state, the law has arrangements for this which detail who gets what from the deceased’s estate and how this process is to be administered.  To do this, an executor (sometimes called an administrator) will be appointed to dispose of the estate.

The most obvious problem with this situation is that you have no say whatsoever; you don’t get to choose who gets what, you don’t get to make a unique statement to those you love and care about and you don’t get any say over who administers your estate.

Furthermore, each state has slightly different rules about how your estate should be administered if you die without a will and this is a problem if you have assets in different states.

In each state, however, the law’s formula for distributing your assets has a clear hierarchy starting with the immediate family; surviving spouse and/or children, followed by the nearest living relatives and then, if there are none, the government.  It may leave out friends or other loved ones you care about, and may be completely contrary to what you want.

Dying intestate often leaves families confused and can lead to unnecessary conflict at a very emotional and vulnerable  time for all concerned.  Your loved ones will be left second-guessing each other about your intentions and each may have very different ideas about what they think you wanted and what they feel they each deserve.

The whole process is more time consuming and expensive than if you had left them a valid will.

Even though the law provides a list of beneficiaries, that will not avoid any of these pitfalls. Only you can do that by writing a valid will that clearly states your intentions.

This a common concern when writing a will. In some extreme examples, where the possible beneficiary concerned is a spouse or child, it is very difficult to avoid naming them as a beneficiary because, as a child or spouse, they have an immensely strong claim against your estate even if you choose not to name them.

Fortunately, there are ways to exercise some control over a beneficiary’s enjoyment of the benefit you bequeath to them, enabling you to make this important gesture to them with some peace of mind.

A common solution is to set up a trust arrangement whereby the benefit you bequeath to them is held in trust under clear constraints you have outlined. It may wait until the beneficiary reaches a certain age or meets a certain condition before the benefit is made available to him or her. Alternatively, it may dispense a limited amount of money at certain intervals specified by you.  There are numerous forms these trust arrangements can take. However, there are also certain arrangements that will not stand up before the law if challenged.

To make the right arrangements or to investigate other possible solutions, you should discuss your concerns with a solicitor who can advise you on the best course of action.

You may be able to challenge a will on a number of grounds, provided you are eligible to do so.  You would do this in the Supreme Court and it must occur no later than eighteen months after the deceased passed away.

You must be one of the following persons in order to challenge a will:

• a spouse or de facto spouse – this may include a same-sex spouse
• a former spouse;
• a child;
• a person in a domestic relationship with the deceased – this can be someone who was in a non-marriage, non-de facto personal adult relationship with the deceased, regardless of whether or not they were related, in which they lived and provided domestic support and personal care to each other;
• A dependent grandchild of the deceased;
• any person who was a dependent of the deceased and was a part of his or her household.

A will can be challenged on any of the following grounds:

• that you were not properly and fairly provided for in the will and are entitled to something more than what you got;
• that the deceased did not have the mental capacity to make a valid will;
• that the will itself is an old one and no longer valid;
• that the will was interfered with after it had been signed; or
• that the will was not made with a free mind because the deceased was tricked, pressured, intimidated or otherwise manipulated when making the will.

If you think you may have a good reason to challenge a will, it is essential that you talk to a solicitor, who specialises in wills, as soon as possible.

In some States, the definition of a ‘de facto’ relationship has been changed to include same-sex relationships by removing any reference to the gender of de facto partners.  This change has, in effect, included same sex partners in the definition of ‘de facto’. This important change affected a wide range of laws, including those relating to wills and estates.

Same-sex couples may now be considered de facto spouses provided they meet the standard

requirements for a de facto relationship; namely, that each person was the only partner of the other person and not in another de facto relationship.

The following issues will determine whether or not a same sex relationship qualified as ‘de facto’:

• how long the relationship lasted
• how long the couple cohabited
• was there a sexual relationship
• what level of financial dependence existed between the parties
• was property owned, used and acquired
• was there evidence of a mutual commitment to sharing their lives
• how were household duties performed
• how was the relationship perceived by other outside the relationship

Most other states and territories have followed NSW, which was the first to introduce the changes, and some have made even more sweeping changes.

So a same-sex partner of a deceased person has the same rights as a heterosexual de facto spouse.

This can be an issue when the deceased did not write a will clearly expressing their intentions towards family and friends.  A de facto spouse may have to first prove that they were, indeed, the de facto partner of the deceased.

In some States, the law defines a de facto spouse as someone who was the sole partner of the deceased person and not a partner in another de facto relationship. This includes same-sex couples.

The following issues will determine whether or not a relationship qualified as ‘de facto’:

• how long the relationship lasted
• how long the couple cohabited
• was there a sexual relationship
• what level of financial dependence existed between the parties
• was property owned, used and acquired
• was there evidence of a mutual commitment to sharing their lives
• how were household duties performed
• how was the relationship perceived by others outside the relationship

A will can still be challenged by a de facto spouse and/or children if there was no provision  for them or if they believe inadequate provision was made. This situation is the same as if it involved a married spouse and/ or children.

If there is no will and the estate is being disposed of by an Administrator, there is a clear formula for the distribution of assets to a de facto spouse and/or children.  It is basically the same as that which applies to a married spouse and/or children – in other words, they have the same rights.

The de facto spouse inherits everything if there are no children.

If there are children, the de facto spouse and/or children will inherit everything. When the value of the estate – except for household goods such as furniture, kitchenware, appliances, consumables, pets and so on – does not exceed a prescribed amount, the spouse inherits everything.  Currently, the prescribed amount is set at $200,000,  subject to change.  If the value exceeds that amount, then all household goods, the prescribed amount and one-half of everything else is inherited by the spouse and the remainder of the estate – the ‘residue’ – is inherited by the children.

If there are children, but the de facto spouse is deceased, the children get an equal share of the whole estate.  If a child of the deceased is not alive and has left children of his or her own, they inherit   that share of the estate.

If neither a de facto spouse nor children are alive, than the Administrator must search for the nearest living relative. If there are none, the estate goes to the government.

This is the day upon which the sale is made final.  That is, the process of conveyancing is completed and the buyer is able to take possession of the purchased property. It normally takes place about six weeks after contracts are exchanged.

Traditionally, settlement was a physical meeting of all the interested parties in which the final amount was transferred to the seller, and all relevant documents are checked and exchanged. This is still the case, however the buyer and seller no longer need to attend the settlement meeting as lawyers are representative of their interests.

At settlement, the buyer must ensure that the following are secured:

• That clear and good title is obtained from the seller (in the form of a certificate of title and form of transfer);
• That all requirements of the financial lender are satisfied so the funds for the settlement will be released.  Settlement cannot be made if the funds for sale are not available to be released; and
• That arrangements are made for the possession of the property.

It is advisable that in order to be sure the certificate of title is good and correct, it be compared with the copy gained by the conveyancer from the land title office.

Payable amounts

The following amounts are payable at settlement:

• Council, and water rates; and
• Land taxes (where appropriate).
• Usually other amounts, such as electricity, gas or telephone charges are not taken into account  and are settled privately between the buyer and seller.

Time and place of settlement

The time and place of the settlement is determined by the seller of the property and will be where the certificate of title is held. The timing of settlement will usually be four to eight weeks after contracts are exchanged. This is considered the minimal time in which the process can be completed.

As most property is mortgaged the site of the settlement will be a bank or building society office.  Where the seller owns the property outright settlement will take place at the office of the seller’s solicitor (or licensed conveyancer).

Often, the keys are handed over at the time of settlement so that the buyer can take possession of the property, but generally the keys will be left with the estate agent handling the property for the buyer to pick up at a later date.

A pre-purchase inspection is an exercise in ‘due diligence’, ensuring that the investment the buyer is making is a sound one.  These inspections are carried out by a qualified building inspector who prepares a report on the structural integrity of the property in question.

From 1 January 2004, only building consultants licensed under the Home Building Act 1989are permitted to carry out pre-purchase inspections of residential properties in New South Wales. Other inspections, e.g. pest inspections, do not require a licensed practitioner. However it is vital to have pest and electrical wiring inspections made prior to purchase.

What is a final inspection?

The final inspection is most often made before, or on the day of, settlement, a final inspection is used to ensure that the property is in the condition that is described in the contract and that all inclusions have been made.

What happens if problems are not found?

If the licensed consultant was negligent in doing the inspection, or did not identify problems with a property during an inspection, you may be able to take legal action against them. Seek further legal advice if you are unhappy with the results or outcome of an inspection.

When both parties have agreed with the terms of the contract for the sale of land, they both sign the contract and the buyer pays a deposit to the seller. This deposit will be a percentage of the value previously agreed.
After exchange the seller holds the property until the date of settlement. At the point of exchange, the agreement has been struck and will stand unless the contract is rescinded by either the buyer or seller.

Processes triggered by the exchange

The exchange of contracts will trigger the following processes:

• The commencement of the ‘cooling-off’ period (where it is available in your circumstances – for example, this does not apply to property purchased at auction)the cooling off period generally ranges between 3-5 business days, depending upon the laws of the state where the contract is taking place;
• The timing for the payment of the stamp duty. Stamp duty must be paid within 1-3 months of settlement (depending upon the individual laws of the State or Territory). If the duty is not paid within this period a fine may apply.
• Final period before settlement.  This will usually be four to eight weeks between the time the contracts are exchanged and the date of settlement.

The exchange of contracts presents a timetable before settlement in which final inspections, financial arrangements, and the final exchanges must be made

Exclusions and inclusions are the technical terms for those fittings and fixtures that will or will not be sold with the property. The status of fixtures and fittings in a property that is for sale are determined through negotiation between buyer and seller before the contracts are exchanged or the property settled.

Fixtures differ from fittings in that fixtures are ‘affixed’ to the land and pass to the buyer upon purchase, while fittings are chattels (personal property) that do not pass in ownership with the property. So, fixtures are ‘automatic inclusions’ and must be specifically excluded in any agreement, while fittings are automatically excluded and must be specifically included in any agreement.

Example of fixtures

Possibly the most common example of fixtures are plants in the garden (if the property has a garden). These, if the seller wishes to specifically exclude them from the purchase (and subsequently remove them prior to settlement) must be expressly excluded from the sale.

Examples of fittings

Fixtures and fittings may include the following:

• Inside living space items: light fixtures or carpets;
• Kitchen fixtures: stoves, dishwashers, dryers, etc.

It is assumed that such fittings are excluded from sale. If they are to be included they must be expressly included in any agreement.

It is greatly advisable that these inclusions and exclusions be agreed upon prior to the drafting or exchanging of contracts as it is best practice to include them (or attach an agreement to the contract) specifically in a term of the contract.

After these inclusions and exclusions are agreed upon then they must be included with the property upon settlement (or removed before settlement), unless another agreement between the parties for another timing for inclusion is made. The inclusion and exclusion of fixtures and fittings takes on greater importance in the purchase of a business.

As noted above, conveyancing is the process whereby property is transferred from a seller to a buyer. This involves both legal and administrative processes as well as processes dedicated to ensuring the property is a good investment.

The Process

The following is a brief list of activities in the conveyancing process:

• Examining, drafting (if acting for the seller) and exchanging the contract of sale.
• Liaising with the other conveyancer over the terms of the contract;
• Arranging building and pest inspections;
• Examining a strata inspection report (if the property is part of a strata scheme);
• Arranging finance (if necessary);
• Paying the deposit at exchange;
• Preparing and examining the mortgage agreement (if necessary);
• Checking if there are outstanding arrears or land tax obligations;
• Finding out if a public authority has a vested interest in the land or if any authority is planning a development that would affect the enjoyment of the property;
• Generally sourcing information about matters that may have not yet been disclosed (such as disputes over fences or building work, for example);
• Calculating the stamp duty payable or applying for an exemption or discount;
• Overseeing the transfer of title; and
• Completing final checks and attending settlement.

The Contract

This legal process is the formation of an agreement between the buyer and seller: a contract for the sale of land. This contract will include the following terms and information:

• the identity of both buyer and seller;
• the details of the property and its condition;
• the agreed priced;
• the day on which the full amount will be paid (settlement); and
• other rights and particulars such as a ‘cooling-off’ period (see ‘What is a Cooling-Off Period’) or certain contingencies regarding the availability of finance.

Conveyancing is the process of formally transferring the ownership or control of property from a seller to a buyer. It includes mortgages, charges, leases and the passing of various other interests in property.

This process, like any sale, requires the creation of an agreement. In this case, a ‘contract for the sale of land’, the preparation for which forms the basis of the conveyancing process.

The preparation for completion of the contract involves both basic administrative tasks such as the sourcing of documents, and also important acts of ‘due diligence’ in ensuring that the property investment being considered is indeed a good investment. Such acts of ‘due diligence’ includes building, and pest inspections that are geared towards ensuring that the property being purchased is not a poor investment.

Across most Australian States the following people can handle conveyances:

• A solicitor;
• A licensed conveyancer; or
• An individual.

In some States (Queensland, Tasmania and ACT) a practising lawyer may only act for a client in a conveyancing matter, but in all other States professionals such as licensed Conveyancers may also carry out conveyancing work.  Conveyancers are usually regulated by a State Government body who have strict rules for their registration and training.

Costs

The fees that are paid to a lawyer or licensed conveyancer for the completion of this process are called ‘disbursements’.  A licensed conveyancer or lawyer will also charge a general service fee for the services.  In some States this is capped at a maximum amount, though the amount will vary greatly.

Professional indemnity insurance

Both lawyers and licensed conveyancers are required to hold professional indemnity insurance.  Basically, this insurance allows a person aggrieved by the negligent work of such a professional to collect remuneration or compensation.  This fact is an important peace of mind for a buyer or seller if something should go wrong.

While It is also possible to conduct a conveyance yourself, before doing so it is important to understand the benefits of using a property law specialist covered by indemnity insurance.  For more information read the FAQ, ‘Do I Really Need a Lawyer?’

A power of attorney is a document which allows another person to make decisions on your behalf. There are lots of instances where you may want to execute a power of attorney. There may be situations where you want to give someone power to do something specific during a specific period of time. For example you may want someone to buy property on your behalf or to sign a legal document while you are on holiday.

You can also use a power of attorney to plan for the future so that someone you trust can deal with your property should you lose your capacity to deal with it yourself. You can give someone power to deal with your assets so your affairs can be properly managed and you can continue to support people who depend on you. It is not something that can be used after your death.

In NSW, the new Powers of Attorney Act 2003 which applies to any power of attorney created after 16 February 2004 has clarified the law relating to powers of attorney and gives additional protections to people wanting to appoint powers of attorney, so that they can be confident that their property will be dealt with in the way that they intend.

When creating a power of attorney, you can choose when it is to take effect from. There are a number of options:

• immediately;
• when the appointed attorney accepts it;
• between specified dates;
• when the attorney considers that you need assistance managing your affairs; or
• some other time.

You need to consider all the options that are available when creating a power of attorney.

If you want to use a power of attorney to enable someone to deal with your real estate, you must register the power of attorney. Powers of attorney are quite commonly used to deal with real estate. You can use them to do specific things such as enable someone to buy or sell property while you are away. You may want to take advantage of a particular opportunity that might arise or you may just need someone you trust to be able to handle your affairs for a period. Powers of attorney created for this purpose need to be as specific as possible.

If you want to set up a power of attorney to plan for the future, the new Act has removed a lot of the uncertainty surrounding enduring powers of attorney. An enduring power of attorney is a great way to ensure that your affairs will be properly managed should you lose your capacity through age or accident. You can include a simple statement that allows the person you appoint to give a reasonable level of gifts and benefits to cover your established social practices. If there are people who are dependent on you, the power can be used to provide for their living expenses. It can be used to give gifts to your family or close friends such as birthday and Christmas gifts. It can also be used to continue to make donations to charities which you would normally have made. Enduring powers of attorney are supervised by courts and tribunals (in NSW the Supreme Court and the Guardianship Tribunal) which can prevent an abuse of the powers.

There are number of protections in the new Act which protect the interest other people may have in your property. For example if the attorney disposes of property which is specifically given in a will, the beneficiaries retain an interest in the money or property which arises from that disposition. It also protects the rights of a spouse of someone who dies intestate (without leaving a will) if the attorney has disposed of the matrimonial home.

Valid enduring powers of attorney created in other States and Territories can be recognised in NSW. You need to be sure that the power of attorney was properly executed and bear in mind that it is will be limited to any power that could be conferred in NSW.

A power of attorney can give another person a lot of control over your property, assets and other affairs. You need to make sure it is properly set up so that the person you appoint will manage your affairs in accordance with your wishes. If you want to establish a power of attorney for a specific purpose or for long-term planning purposes, you should talk to a solicitor who can help you set up an appropriate power of attorney and explain to you the consequences of the particular power you create.

The buying or selling of a property is complex as well as risky. The good news is that having an experienced lawyer (either a solicitor or a licensed conveyancer) act on your behalf in this process is virtually a guarantee that your sale or purchase will go ahead smoothly and with a minimum of fuss. While you may think that you cannot afford the services of a lawyer, consider whether you can afford not to.

Doing conveyancing yourself with a ‘Do-It-Yourself’ kit can be fraught with unseen dangers. Remember, licensed conveyancers and lawyers are not only trained professionals but are required to have professional indemnity insurance and will be professionally liable if anything goes wrong in the process. If you carry out your own conveyance and it goes wrong you alone will be left responsible.

What can go wrong? Consider a situation where a seller of a property does not disclose the fact that their property is actually condemned and an order of demolition has been issued. If your lawyer or licensed conveyancer fails to find this out in their investigations and your new property is not in the condition it was originally sold in (that is, it is demolished) then your conveyancer will be professionally liable and you will receive remuneration for your economic losses. If you are acting for yourself no remuneration will be available and the mistake may lead to financial ruin.

Remember, the purchasing of a property will be one of the largest investments you make in your life. During this period both your lawyer or licensed conveyancer and your estate agent will become important people in your life. Whether investing for the future, or buying into the ‘Australian dream’, consulting a conveyancing professional will enable you to feel assured that your investment is in good hands.

Stamp duty is a State tax on written documents and certain transactions, such as:

• Hire purchase agreements
• Motor vehicle registration and transfer
• Leases and mortgages
• Insurance policies
• Transfers of property.

Amounts of the duty will vary between States and Territories according to the type and value of the transaction involved. The precise rules vary according to the individual State or Territory legislation. Certain exemptions and concessions may also be available.

Your lawyer will calculate this amount and ensure that the correct amount is paid at the right time prior to settlement.

Late payment

Stamp Duty must usually be paid within 3 months of exchange of contracts (however this may vary depending upon which State the exchange took place and the type document) or, if you have an incoming mortgagee, prior to or at settlement. In the event of an extended or delayed settlement you are reminded that if Stamp Duty is not paid within three (3) months of the first date of execution of the contract, the Office of State Revenue will impose a penalty interest to be calculated on a daily basis. Your lawyer or licensed conveyancer will ensure that such penalties are not incurred and that the Stamp Duty payment is made on time.

Exemptions and discounts

From time to time various State and Federal Government schemes will allow certain classes of property buyers to gain a discount or exemption from payment of the stamp duty. Public tenants are typically exempt from payment of stamp duty.

This is where an estate agency or development company offers property for sale that is yet to be completed or has not yet commenced construction. Increasingly, large residential developments are being offered for sale before completion. Buying off the plan represents unique challenges for the conveyancing process as a multitude of different considerations are required to be taken into account.

Buying off the plan can be a very risky venture and when considering buying a property of this sort you should be aware of the following risks relating to price after completion, changes to construction and management contracts:

• Is the selling price fair? You have little way of knowing what the selling price will be after the completion of the property. While some consumers find they have a completed unit that has a market price higher than that which they paid for it, often the opposite is true. Remember, market prices for real estate fluctuate greatly;
• Can they change the plans? Yes, changes to building plans often have to made during the construction process. Often the completed building will be quite different to that originally conceived. This may have an effect on the desirability of the property and the price compared with the original estimate if the building is not substantially the same as the original plan;
• Quality of construction. The purchaser has no guarantee that the property will be constructed to a certain level of quality. Indeed, the purchaser has little idea of what the standard of fixtures and fittings will be after the property has been completed. A variable quality in these fixtures and fittings may have a detrimental effect on the value of the property after completion; and
• Management contracts. Often the developers will enter into contracts for the management of the property for after completion. These contracts may not be in the best interests of the property’s value or utility and may be difficult for the owner’s corporation or body corporate to overturn or change.

Generally, buying off the plan is very risky as the final product may not be as it was originally imaged. Financially, while buying off the plan may lead to the securing of a property for less than its worth when completed. However, the reverse may often be true and a buyer may buy an unfinished home or unit that turns out to be worth less than the original asking price.

The legality of a rescission of the contract by either the buyer or the seller is based in both State Conveyancing legislation and the common law of contract. Broadly, if the buyer or seller place one another in a position where the contract cannot be completed then the contract may be rescinded. However, there are stipulations placed on the situations where the contract is considered untenable.

Buyer

There are limited circumstances in which a buyer may rescind on a contract for the sale of land. Recision on the sale has to be made in writing to the seller within a certain statutory period.

Recision of the contract is generally only available to a buyer of land where the parties are capable of being placed back in their original positions before the contract was made. However, this can be difficult when intervening events have occurred such as the securing of finance.

However, the buyer is broadly entitled to rescind wherever there is a situation that the seller of the property is unable to follow through with the contract for the sale.

Consider the example of the sale of property that has been illegally built on Council land where such a building is prohibited. The sale cannot proceed, as the seller is unable to transfer good title to the buyer. In such a circumstance, the contract becomes untenable and the buyer may rescind from the purchase.

Buyers are able to rescind in a variety of other situations where the seller has breached the terms of the contract or failed to answer requisitions that has not enabled the sale to finalise.

An example of a failure to reply to a requisition is where the seller has failed to disclose important information regarding the nature of the property that, had the buyer known, would not have reasonably entered into the contract.

Seller

Yes, there must be a clause in the contract that allows the seller to rescind on the contract. However, this recision must be made on the basis of ‘reasonable grounds’ and not be an arbitrary or capricious act.

If a seller rescinds a contract without reasonable grounds then a buyer can pursue a legal remedy in the courts to recoup costs incurred in the conveyancing process.

In NSW, the vendor duty was payable by the vendor for the transfer of land, or land related property, unless the transaction came within a small number of exceptions, for example your primary residence, substantially improved vacant land, substantially improved buildings or new buildings and land used for primary production. The rate of the duty was 2.25% and was applied to the whole amount of the value of the land and is payable before completion.

The New South Wales Government has abolished vendor duty on contracts for land related property that were entered into on or after 2 August 2005, and anti-avoidance provisions will be introduced to prevent persons avoiding vendor duty by cancelling contracts that were exchanged before 2 August 2005.

The existence of a family violence order may be significant in proceedings before the Family Court, particularly where the Court is being asked to make a parenting order related to children spending time with each parent (formerly called a contact order).  It is important that a parenting order does not expose anyone to family violence.

Recent amendments to the Family Law Act 1975 (Cth) were intended to clarify the relationship between orders made under the Family Law Act 1975 requiring a child to spend time with a person, and family violence orders made under the law of a state or territory to protect a person from family violence.

Following recent legislative changes, where a Court exercising jurisdiction under the Family Law Act 1975 makes an order providing for a child to spend time with a person and this order is inconsistent with an existing family violence order, the Court is now obliged to explain to the parties affected (or arrange for someone else to explain to them), the effect and consequences of the order and how the parties are to comply with the order.

In addition, as a result of recent legislative amendments, when an application for a family violence order is made in a state or territory court, that court now has the jurisdiction to amend an existing family law order providing for a child to spend time with a person, if this is necessary to give effect to the family violence order.  This ensures that people are protected where a family law order may expose them to violence or risk of violence.

Here someone must attend court proceedings, it is important that the Court is notified about any concerns regarding personal safety.  In situations where someone is required to attend a court appointment or legal proceedings, the court can make special arrangements where someone has fears about being in the presence of their former partner.  Depending upon the circumstances, it may be possible to participate in the proceedings by phone, by video, or in a separate room.

Under the Constitution, the Commonwealth Government has the jurisdiction to make laws in relation to divorce and matrimonial causes, including parental rights and custody issues.  Because the Constitution did not expressly give the Commonwealth Government jurisdiction over de facto relationships and exnuptial children, under the Constitution these matters would fall within the jurisdiction of state governments.

Most states have chosen to refer some or all of their jurisdiction over de facto relationships and exnuptial children to the Commonwealth government.  Western Australia has retained its law making authority with respect to de facto relationships and exnuptial children.

Australia has a “no fault” divorce system and courts do not consider whose fault it was that the marriage has broken down.

In Australia you can only apply for a divorce after you have been physically separated from your spouse for a period of at least twelve months.  In a divorce application it is necessary to show that the marriage has broken down and there is no reasonable likelihood that you will get back together.

In some circumstances, it is possible to apply for a divorce even though you have not lived physically apart from your spouse for a twelve month period.  For example, the family law system is designed to encourage couples to reconcile their differences.  If a couple gets back together for one period of up to three months for the purpose of reconciliation, it is possible to use the periods before and after the period of reconciliation to calculate the twelve month separation period.

In some circumstances, it might be possible to apply for a divorce where you and your spouse have lived under one roof for all or part of the twelve month period.  In these situations, it is necessary to satisfy the court that you and your spouse lived separate lives despite living in the same home.  If you intend to live separate live under the same roof as your spouse, it is a good idea to consult a solicitor for advice on how to structure your relationship and your daily affairs in a manner likely to satisfy a court that you and your spouse lived separate lives.

Spouses who are getting divorced can finalise a property settlement at any time after separation and before either spouse has applied for a divorce.  Once a divorce has been obtained, however, you only have one year in which to apply to the court for an order for a property settlement.  If more than a year has passed since obtaining your divorce, it is necessary to obtain the court’s permission to bring the application.

In most cases, parties are able to agree on how property will be divided.  Parties can seek to have their agreement formalised by asking the court to make a consent order in the terms of the agreement.

Sometimes spouses cannot agree on how property will be divided and it is necessary to apply to the court.  The court will consider all of the property and financial resources of the parties.  This includes things like real estate, investments, interests in companies, family trusts, life insurance and superannuation.  In making a fair division of property, the court will consider each spouse’s contribution to the family, and contribution to the acquisition, conservation and improvement of the property.  The court will also consider both the present and future income of each spouse, as well as their needs and responsibilities.

A parent’s conduct will only become an issue where it affects the welfare of the children or goes to the issue of a parent’s ability to look after them. The court will make orders to try to protect children from domestic violence, which includes verbal threats that cause a person to be scared or apprehensive about their own well-being or safety.

If a parent has married again or is living in a defacto relationship, the court will take that into consideration to the extent that it is relevant to the children’s welfare. Again, the task of the court is to decide what will be in the best interests of the children.

The court will not refuse a parent residence or contact simply because the parent has an “alternative” lifestyle. That would only be a factor taken into account into to the extent that it impacts on the best interests of the children.

Spouses are generally expected to be self-supporting following separation.  However, in some circumstances spousal maintenance may be payable where one spouse is unable to meet his or her own needs and the other spouse has the capacity to assist.  For example, a high income earner may have to pay spousal support to a former spouse who is unable to work because of a physical disability or where the former spouse is responsible for caring for young children.

Applications for spousal maintenance must be brought within one year after obtaining a divorce.

Financial agreements are agreements about financial arrangements in the event of marriage breakdown.  Since December 2000, these agreements can be legally binding, provided that they are signed and provided that each person received independent legal and financial advice before signing.  In limited circumstances courts can declare the agreement to be invalid.

Financial agreements can be made before, during or after a marriage.  They often cover matters such as the division of assets after the marriage and the financial support of one spouse by the other after the marriage.  They are intended to impact the division of property and the payment of maintenance.

Both parents have full responsibility for all their children until a child is 18.  The family law system strongly encourages parents to reach an agreement regarding the care of their children.   The court can formalise these agreements by making a consent order.

Where agreement cannot be reached, an application may be made to the court for a parenting order.  In the past, orders were categorised as being residence, contact or specific issues orders.  However, following recent legislative amendments introduced by the Family Law Amendment (Shared Parental Responsibility) Act 2006, all of these orders are now referred to more broadly as parenting orders.  Child maintenance orders have remained a separate category of parenting order.

In making a parenting order, the court will always consider the best interests of the child, having regard to a number of factors set out in the legislation.  Those factors include the benefit to the child of having a meaningful relationship with both parents, and the need to protect a child from physical or psychological harm.

Recent legislative changes also require parents to attend family dispute resolution in order to resolve disputes about children prior to lodging an application with the court.  These changes are intended to promote the sharing of parental responsibility in the event of family breakdown.

A family violence order is an order made under a law of a state or territory to protect someone from family violence.  Family violence orders have different names in different states:  apprehended domestic violence orders (NSW), intervention orders (Victoria), protection orders (Queensland and ACT), restraining orders (South Australia, Western Australia and Northern Territory) and restraint orders (Tasmania).

Family violence orders typically prohibit one parent from coming within a set distance of another parent, or prohibit one parent from stalking or harassing the other parent.  Sometimes family violence orders can contain limited exceptions, such as allowing contact between parents for the purpose of delivering or collecting a child.

Children can sometimes be included on family violence orders made for a parent.  More commonly, child protection orders are made by a state Children’s Court where there are grounds for believing that a child is in need of protection.

On the breakdown of a de facto relationship, property issues are dealt with by state laws.  State courts (rather than the Family Court of Australia) have jurisdiction.  If you are in a de facto relationship, it is important to understand the laws that apply in your state.

In New South Wales, for example, it is usually necessary to demonstrate that you lived in a de facto relationship for at least two years, although in some situations it is possible to make a claim for a property settlement if the relationship lasted less than two years.  Once an application for a property settlement has been made, the court will consider the financial and non-financial contributions of each de facto partner in making a property settlement.

For matters involving ex-nuptial children of de facto couples, it is still necessary to make an application to the Family Court of Australia, the Federal Magistrates Court or the Family Court of Western Australia.