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Do grandparents have rights

Do Grandparents Have Rights in Family Law Disputes?

By | Family Law, Podcasts

We know that family law disputes are often tumultuous with so many people, quite apart from the 2 spouses and children that are caught in the crossfire. One such group, is grandparents and they often ask, what about our rights in relation to the grandchildren? In this podcast, OMB Solicitors’ Gary Mallett answers the question.

TRANSCRIPT

Dan: Gary, do Grandparents have rights?

Gary: The short answer is YES, and equally the grandchildren have rights under the Family Law Act to communicate and spend time on a regular basis with any person concerned with their care, welfare or development, including grandparents and other relatives.

The law, therefore, recognises the rights of the children to continue to have a relationship with their grandparents after separation of their parents.
As a result, grandparents are given the specific ability to apply for a parenting order for their grandchildren under 65C of the Family Law Act.

The best interests of each child will be the most important consideration in any case about care arrangements for grandchildren. It is the needs of each child and their right to spend time with both parents and other significant adults such as grandparents that are considered.

All care arrangements for the grandchildren must also be practical and must keep them safe from family violence and child abuse.
A grandparent does not therefore automatically have the right to spend time with their grandchildren or have their grandchildren live with them, particularly if it is not in the best interests of the children for that to happen.

As a grandparent, you may find yourself concerned about the welfare of your grandchildren.

You may be concerned that your grandchildren are being exposed to domestic violence, or that they are being abused, in their household.
Alternatively, your grandchildren’s parents may have separated, and the parent with whom the children are living may be refusing to allow your grandchildren to spend time with you.
In a further scenario, you might find yourself caring for a grandchild, either on a short term or long term basis because neither of the parents of that child is able to do so, because for example:

1. One or both of child’s parents have drug, alcohol or mental health problems;
2. Both of the child’s parents are deceased;
3. The parents are in jail;
4. The parents are working or studying away from home; or
5. The child has been removed from the care of their parents by Department of Child Safety officers, and placed with you.

Dan: Why would a grandparent need a parenting order in a situation where they already have the care of a grandchild?

Gary: If you have a grandchild or grandchildren in your fulltime care, you may still need to have parenting orders made for you to have parental responsibility for your grandchild or grandchildren, and for an order that they live with you for the following reasons:
• to provide evidence of care for Centrelink purposes:
• to enroll a child at school or in kindy;
• to enable you to apply to the court for a recovery order if a child is taken from your care;
• to consent to medical treatment for a child.
• to apply for a passport for a child.

Dan: What can Grandparents do in situations where care arrangements for their grandchildren are in dispute?

Gary: The first step, if your grandchildren’s parents are still alive, is to attempt to reach an agreement with the parents about the grandchildren spending time with you, or for you to have parental responsibility for grandchildren and for the grandchildren live with you, whatever the case may be.

This agreement can be reached by engaging solicitors to act for you to attempt to negotiate an agreement with the children’s parents, or by attending a family dispute resolution conference with both parents through a mediation organised by your solicitors, or through a government or community funded centre such as a Family Relationships Centre, Relationships Australia or Centacare.

If the parents are already involved in contested litigation in a family court over the children, it may be necessary for you to apply to the court to become a party to those court proceedings.

If you have been able to reach an agreement with the parents of your grandchildren about your involvement in the children’s care arrangements, then that agreement can be formalised by incorporating it into a written parenting plan for the children.

However, a parenting plan is not enforceable by the Court.

A parenting plan, does not give a grandparent any enforceable right to be able to spend time with their grandchildren, or to have parental responsibility for them.
I always recommend that grandparents go one step further and consult a solicitor to draw up the parenting plan as consent orders, and file an application in the Family Court for consent orders to formalise the agreement in the parenting plan.

Consent orders can be enforced by the Court, and a grandparent will need these orders if there is any concern about one or both of the parents sticking to the agreement that you have reached with them about your grandchildren.

If you cannot reach an agreement with the parents of your grandchildren, or both parents are deceased, then you will need to apply to the court for a Parenting order for your grandchildren. You will need a solicitor for this application to give yourself the best prospects of success.

A parenting order can cover:

• Who is to have parental responsibility for the grandchildren;

• With whom the grandchildren children are to live;

• who the grandchildren spend time and communicate with and how often;

• What orders need to be made to safeguard the grandchildren from exposure to family violence and child abuse;

• schooling or childcare for the grandchildren;

• medical issues;

• religious or cultural practices;

• financial support for the children; and

• how those with parental responsibility will communicate with each other.

Family law is a unique and specialised field of law, and legal advice and assistance is always recommended.

In particlar, legal advice should be immediately sought in the following circumstances:

• If you or your grandchildren are at risk of harm;

• There is an existing parenting dispute over the grandchildren that is in Court, and you need to apply to become a party to the proceedings;
• You have a parenting plan that you wish to made into consent orders;

• You have been presented with Consent Orders and have been asked to sign them;

• You need to apply to the Court for a parenting order because you cannot reach agreement
with the parents of the grandchildren, or because those parents are deceased;

• Before you appear in court;

• If you have an existing court order and you want to make changes to the arrangements for your grandchildren;
• if you disagree about what’s in the best interests of the grandchildren;
• if you believe that you have been bullied, tricked, intimidated, coerced, threatened or forced into signing consent orders; or
• if you have a grandchild in your care and you wish to seek child support. Child support can be another complex part of family law, and it is important to get legal advice about child support issues before you apply.

how to choose an executor

What is an Executor and How Do I Choose One?

By | Podcasts, Wills and Estates

If you’re like many people when it comes to estate planning, you probably don’t give the attention that’s necessary in choosing who your executor will be but rather simply opting for your partner or adult child. But it’s an onerous job, and the choice is very important. In this podcast, OMB Solicitors’ Jessica Thomas helps you consider your choice.

TRANSCRIPT

Jessica: Well, Dan, the first step in choosing an executor is to choose someone that is honest, that is organised, and that is able to communicate with the beneficiaries in your will. So, suppose we can go back to basics, what is an executor? An executor is someone named in your will who is given the legal responsibility to take care of any remaining financial obligations that the deceased may have had. So what the executor, their job is to do is to bring in the estate, pay off any debts that there may be, and then distribute in accordance with the terms of the will.

Jessica: The key qualities, as I said before, are that you firstly need someone that you can trust. A lot of the times, people will appoint their spouse, their adult children, or sometimes their [inaudible 00:01:12]. It’s a big job. It’s very important that the executor is organised and able to communicate with those beneficiaries.

Dan: Jessica, I was just sort of thinking that not only is it challenging in the respect of trying to distribute the estate generally, but also there must be some family dynamics or relationships that can possibly be difficult to navigate for the executor, as well.

Jessica: That’s right, Dan, so we always say when there’s a will, there’s a family. The difficulty with appointing say, for example, one adult child as opposed to both of your adult children, is that the other adult child could potentially feel that they’re being left out of making the important decisions. So if you do appoint someone impartial to the estate, such as a solicitor, or an accountant, even for that matter, you’ve got someone there that they don’t actually have the emotion attached to actually distributing that estate. They can use their professional judgement as to how the matter needs to be essentially wrapped up as soon as possible for the benefit of those beneficiaries.

Dan: Now, here’s why it’s important, I suppose, to speak to your lawyer about this as opposed to going online and jumping in for a free will kit or going down to the newsagent and just filling in the details.

Jessica: Yes, it’s very important to speak to your solicitor when setting up a will, obviously. Post office will are better than nothing, but in saying that, if you don’t actually completely understand how the succession of Queensland or any state, for that matter, works, it’s very important to speak to a solicitor so they can set up your estate planning properly. Also, on the other hand, when someone does die and you are appointed the executor of that estate, to speak to your legal professional or your accountant as to what the process is. We handle these matters daily, assisting families with the administration of their loved ones’ estates. Being an executor, as I said before, it’s a very big job. You essentially are liable if you do anything wrong, so it is so important to have a solicitor there acting in your best interest as the executor of the estate and assisting you with the administration of that.

Dan: Jessica, thanks for joining me.

Jessica: Thanks, Dan.

What Happens if a Body Corporate Caretaker Wishes to Sell its Management Rights to a New Caretaker and Wants the Committee to Agree to it?

What Happens if a Body Corporate Caretaker Wishes to Sell its Management Rights to a New Caretaker and Wants the Committee to Agree to it?

By | Body Corporate, Podcasts

In the context of bodies corporate, one commonly asked question is, what happens in the event that a body corporate caretaker wishes to sell its management rights to a new caretaker, and consequently wants the committee to agree to it? In this podcast, OMB Solicitors’ Tom Robinson answers the question.

TRANSCRIPT

Dan: Tom, what are management rights, and what does it mean to sell them?

Tom: It’s always a big topic these days, these assignments of management rights. We refer to them as an assignment of management rights, because we’re transferring the ownership of those rights between essentially more than two parties.

Tom: I guess a good starting point, is just with some of the basics. When we refer to management rights, we consider them as that package deal, consisting usually of a care-taking agreement, a letting agreement, and then your caretaker letting agent’s lot. As part of the ownership of those management rights, the caretaker is therefore entitled to sell those rights to another person, or entity, to perform that role of caretaker, or letting agent.

Tom: The legislation regulates these assignments, and to a lesser extent, there will be terms and conditions within the agreements themselves, and that’s governed by the regulation that is contained within that legislation. Essentially, it describes the body corporate’s role in a simple way, which is essentially to provide its consent to the transaction, and that’s it.

Tom: In other words, the body corporate just needs to determine whether, or not it will approve the proposed purchaser as the new caretaker. But, it’s not all that simple to give that consent, and certainly part of a condition of considering that decision, the body corporate must not unreasonably withhold its consent to that transaction. So, there’s quite a bit involved, when a body corporate does need to consider that process, when those management rights are being requested to be transferred.

Dan: Tom, I was gonna say, does it cause much of an upheaval?

Tom: Look, it does these days, because the committees in our bodies corporates, including our lot owners, are much more educated, and this process isn’t that standard rubber stamp type process anymore. Management rights have changed a lot since our current legislation came into effect in 1997. So, gone are the days with that rubber stamp process, and now, it’s a much more due diligence process, that’s required for a committee to be able to make that type of decision.

Tom: I guess the important part to remember is the committee can actually make this decision, on behalf of all of its lot owners. So, you could have a 200 lot scheme. You’ve got your committee of seven, who are making that decision, whether or not to give that consent to that transaction.

Tom: It’s not a must. The committee may discharge, I guess, that obligation to a general meeting if it desired to do so, but it’s interesting that the committee actually has that power to do it. So, those committees, especially these days, are very mindful of that task, and obligation that’s put on them, and want to make sure that they do a proper due diligence of this proposed purchaser.

Dan: So Tom, what is the usual process of selling management rights?

Tom: Good question. From the body corporate’s perspective, usually what occurs initially to start a process is, a notification or a letter is sent to the body corporate, from the current caretaker, or usually their solicitors. Normally, that comes after their current caretaker has secured, and entered into, what essentially is an unconditional contract of sale with a purchaser. The only condition that remains, is the body corporate giving its consent to that transaction.

Tom: So, when that notification comes across, it’s from the current caretaker, to the body corporate, requesting that the body corporate give its consent to the transaction.

Tom: With that notification, you’ll find a number of documents. Usually, the standard documents will be the deed of assignment, the motion for the body corporate to resolve, and any resume, and references of the purchaser.

Tom: When those documents come across, the body corporate will then be required to review those documents, and then determine obviously, if there is any further information that it needs, to make that decision. Certainly these days, and very commonly, more information is almost certainly required.

Tom: That can even lead to obviously carrying out an interview of the purchaser, and I guess one of the main points to focus on at this time, when that notification comes across, requesting the body corporate’s consent, that’s when the legislative 30 day timeframe can be considered to start, because that’s when the information has been received.

Tom: Now, there are conservative views with when that 30 days actually starts, and it can sometimes be said, not until an interview’s occurred, but at that point, when that notification comes across, it’s very important for a body corporate to consider getting that legal representation on their behalf.

Tom: The reason that so important is, not only because the caretaker and the purchaser will both be represented by their respective lawyers, and the documents will be drafted by the purchaser’s lawyers, but the body corporate is entitled to recover its reasonable legal, and administrative costs, in considering this, the transaction.

Tom: So really, there’s no reason why a body corporate wouldn’t want to protect itself, and engage in legal representation to assist them throughout this process.

Dan: It’s a no-brainer, isn’t really, in many respects?

Tom: Yes, it is, and it’s all done on a reasonable basis, so there’s no prejudice to the other parties. It’s just the body corporate is only placed in the position to consider this transaction because the caretaker wants to sell.

Dan: So Tom, what are the main steps for the committee in that case, to then undertake when considering that agreement, or giving its consent?

Tom: I guess the first thing to start with for a committee is, obviously like we say, that they can make that decision. So, the legislation outlines a number of factors that the body corporate, or the committee can have regard to, when they consider that transaction.

Tom: It is quite limited. Whilst it’s limited, it does give some structure for the committee to use as a bit of a guide, though some of those examples of what those factors are, is for instance, the character of the purchaser, their financial standing, the terms of the transfer, and also potentially to competence, and experience of the purchaser.

Tom: The importance of those is, that they will basically form any of the additional documents that the body corporate, the committee might then need, in addition to what they initially received.

Tom: Just to give you some examples of those additional documents for those limited factors, when we think about character, and the character of the purchaser are very subjective, so the most objective way to look at it is obviously police checks. That’s quite a common request, and sometimes, we have been seeing those police checks automatically coming across now.

Tom: Financial standing, usually assets, and liabilities, or even to a lesser extent, a letter from the purchaser’s financier will be enough. If a bank’s going to lend to them, then usually, they must have some sort of financial standing.

Tom: In addition to that, the body corporate could undertake bankruptcy, so just to ensure, but if they haven’t got any disclosable outcomes under their police check, or they’re not bankrupt, and things like that, in those instances, their character, and financial standing are generally going to be satisfied, so the most important factor for the body corporate to consider, is whether or not this purchaser has backed the competence, and the experience to perform that caretaker’s role.

Tom: In that instance, we would share the view that a resume is just not gonna be enough for that, nor are the references, and this is why. And we’re usually that interview process has been implemented, to get that final bit of information, to understand whether or not this purchaser might be able to competently perform that role.

Tom: Just on that, I guess one of the important factors to remember is, it’s a balancing act. What I mean by that is, just because a potential purchaser might have zero experience operating management rights, does not mean that the body corporate can automatically withhold that consent.

Tom: Rather, it’s seeing if the purchaser has obtained, or is going to obtain external training. A longer handover period, where they’re going to be trained by the outgoing caretaker.

Tom: Are they members of industry bodies, who can assist them in bringing them up to speed with what the role is entailing?

Tom: Things like that I guess, they’re factors that the committee consider when they’re looking at competence and the experience attached to that type of role.

Dan: So, can the body corporate engage someone that’s qualified to carry out an interview?

Tom: Yes, certainly, and it’s become certainly a common occurrence these days, because a lot of the purchasers we do see, sometimes are changing their careers, and don’t have any experience, so it’s reasonable to assume that the committee might … who don’t have that expertise, delegate that task to an industry body, to perform that interview.

Tom: Again, it is a bit of a balancing act. There’s a number of companies that perform these interviews at a reasonable cost, and those costs ought to form part of the assignment cost.

Tom: But, the reason we say it’s a balancing act is, because if you have a purchaser who has say, 10 years of management rights operation, and experience, it probably might not be necessarily to actually go through that formal interview process, whereas their competence, and their experience is proven.

Tom: Whereas, someone who has no experience, then in that instance, it might be worthwhile, having an independent party do that interview, who’s there, and capable of asking the right questions of the purchaser. So, when they produce that report from the interview, the committee can see where there might be areas that the purchaser needs to attend to, to mitigate any concerns of lack of experience, for the committee, and the body corporate.

Dan: Now, what are the final steps?

Tom: Yes, the final steps, once all of that information’s considered, and like I said, it’s quite a hefty due diligence process, and usually, there is that 30 day timeframe that’s implemented, but once that part’s all done, and the interview’s occurred, and all that, the motion’s then basically determined. The deeds are signed, and we all get ready to go to settlement.

Tom: Usually at that time, the caretaker first, or the purchaser will generally act as the body corporate’s unpaid agent at settlement, just to collect those assignment dockets on behalf of the body corporate.

Tom: And basically in summary, that’s when the transaction will be finalised, and it’ll settle, just like any other type of transaction settlement. I guess like I said, the most important things are, to remember is just that balancing act of, what is the information that the committee needs, to reasonably consider giving its consent, from our perspective, and OMB, or we obviously act exclusively for bodies corporate, so we’re regular assisting the bodies corporate in these assignment process, so if there’s anyone out there who’d like to come down, and have a chat with OMB Solicitors, and the committees, we are happy to offer a no charge one hour consult, so we can have a discussion about these types of matters, and any other matters that might be affecting your body corporate.

Dan: Tom, thanks for joining me.

Tom: Thank you very much Dan.

how to sell your business

What You Need to Know Before You Sell Your Business

By | Business Law, Podcasts

For many business owners, they’ve dedicated years and years of blood, sweat, and tears into their enterprise, hoping that one day, all their efforts will pay off when they sell the business. This, of course, is particularly the case for business owners who, perhaps, haven’t paid into a superannuation fund, who see the sale of the business as going towards funding their retirement. But, of course, when it comes to selling the business, there is a lot to it, and many smart people would say that your planning needs to start years before you hand over the keys.

In this podcast, OMB Solicitors Partner, Simon Bennett discusses the key things you need to consider for selling your business.

Transcript:

Dan: Well, today, I’m with Simon Bennett, a partner at OMB Solicitors. Simon, what is the starting point for a business owner contemplating all this?

Simon: I think, Dan, it comes down to organisation. A business owner who has put, as you said, years of effort and time into developing and growing their business, would like to maximise not only the price that they’re going to receive for the business, but the efficiency and speed with which that business will sell. Now, quite often, that process can be complicated by a seller not being organised. And what I mean by that is be organised in respect to all aspects that a buyer might want to look at. Any prudent buyer of a business will want to conduct a due diligence and those things will start with the information that I’m gonna talk about.

So some of the key items are your finances. You’ve got to have your books in order. You need to see a qualified and experienced accountant to make sure that your books and your financials are in order. Because no one’s going to buy a business and no one’s going to pay good money or top dollar for a business that can’t justify that purchase price or sale price with the returns. And a really prudent buyer will investigate those figures to determine the strengths and weaknesses of the business. So that’s the key number one. If they can’t finance the business through the figures, they won’t purchase it.

The second thing I’d say you need to look at is all the other bits. The ancillaries. So things like what licences do you need to run the business. If it’s a restaurant, have you got food licences in place? Is the business name in place? If those things aren’t in place necessary to run the business, you will fall foul of the purchaser, and potentially lose yourself the sale.

Then there are things like a business name. Are you operating under a business name? Is it registered and is it current? Because if someone is gonna buy value in a business, and that value includes the goodwill, which would include the name that the business is operating under, we want to make sure that that is current and up to date, and you’ve got the rights to it, not someone else.

We want to look at the equipment list. What do I get? A purchaser wants to know what does the purchase price include? Does it include stock? Does it include equipment? And with that equipment, is it owned outright, that is unencumbered? Is it leased? And if so, what are the terms? Or is it under a rental or some other form of agreement? And if so, again, what are the terms? Can they be assigned, or will a buyer take them over, or will you pay them out as part of the sale process?

So these are key elements that a seller can start to plan well prior to listing their business for sale.

Dan: Not to mention, Simon, even employees, as well. I’m assuming that there might be employment contracts that also need to be considered in the mix.

Simon: Yes, exactly. What’s going to happen? Are there key employees that must stay with the business? So if you put your shoes in the buyer’s position, if I’m buying a business, do I need that key employee, that key staff member business manager or what have you, to come over to enhance the goodwill of the business? If so, as a seller, I’d want to lock that employee in and make sure that I would be able to transfer them across to a new business owner and purchaser.

But it also leads into something else. Are they prepared, if the buyer wants them to, to stay in the business for a period? What would be the terms of that? Would it be documented? And if not, one of the key considerations for a purchaser, so therefore, the seller organising and thinking ahead will say, “Am I prepared to sign a restraint? So if I sell this business, am I then prepared to be restrained from competing against that business?” For example, again, in the food industry, if we were to own a restaurant, surely a purchaser will not allow us to compete within a certain area or radius because then we can erode their goodwill. So upfront consideration of these type of items is key to knowing what terms you’re gonna be listing your business on.

Dan: Simon, is it the case that for a person considering selling their business, that should happen, all the thinking should actually happen two years prior, three years, or five years? Is there any sort of recommended timeframe to do this work?

Simon: I think two or three years prior is too long. I think realistically, in the year you’re selling the business would be adequate. However, when you build your business, you should have consideration as to what will be valuable, not only in the continued operation but also valuable to a purchaser, and that might start a little bit further out. So the way you create and the way you grow your business should have some consideration as to what a reasonable purchaser for the value would pay for that. But I think in preparing for an actual sale, we’d want to be talking about the particular year that you were going to be selling it in, maybe a little bit earlier if you are really organised. But certainly, for something like your books, that should be a constant and an ongoing.

Dan: And getting legal advice as early as possible is obviously a no-brainer.

Simon: Well, I think it is essential. It is really so important. You wouldn’t certainly sign any documents associated with a business sale or purchase without consulting with an expert, someone who has substantial legal experience in these matters because the devil is in the detail, as with a lot of legal documents. The business contracts are no different, and they need to be specifically tailored to each business, each individual seller, and what that business entails. Without that, you can’t use any generic form of document because they’ve just got to be tailored to that specific business. What the buyer and seller have agreed between themselves regarding some of those items I’ve talked about. Really important. Get good legal advice to draught the document. So quite different to let’s say a residential or a basic property deal whereby agents in Queensland are commonly drafting documents. That would not be the case in businesses. You need to see your lawyer before documents are drafted to do the drafting for you.

 

how to change by laws

How Does a Body Corporate Change its By-Laws?

By | Body Corporate, Podcasts

With the sheer number of Bodies Corporate on the Gold Coast, it’s probably not surprising that the need to change a bylaw occurs quite regularly. But how is that change done?

In this podcast, Elisha Hodgson, a lawyer at OMB Solicitors, who specialises in both strata and dispute resolution discusses the topic.

Dan: Elisha, it’s probably an obvious question, but where are these bylaws located?

Elisha: Basically with the Body Corporate bylaws, they’re actually established when the first registered community management statement, which we called the CMS, is lodged with the department of human resources and mines. Now, this document is not only really important in that it records the bylaws of the Body Corporate, but it also records important details such as the legislation it’s governed under, the Body Corporate assets and the common property. And also the interest schedule lot entitlements. Now that probably sounds a little bit unfamiliar to most people but, if we use the analogy of I guess, say a company. A company is actually quite similar to the way a Body Corporate works, in that just like a company, it’s run by directors for the benefit of the shareholders. And similarly, a Body Corporate is run by its committee for the benefit of its lot owners. So when I start talking about interest schedule of lot entitlements, what I actually mean is, if we go back to that company analogy, it essentially means the shares which you own in the Body Corporate.

Elisha:  So the CMS is a really critical document, and given we’re talking about Body Corporate bylaws, I think it’s important to know where they come from, where you find them and why you need to know about them and how to change them.

Dan:  So Elisha, for those Body Corporates who are wanting to change the bylaws, is this a really quite problematic process? Is it difficult to do?

Elisha: Well look, it’s not too difficult to do. The first step really is that the Body Corporate has to first identify what do they wanna change, or what Body Corporate bylaw to they need to include into their scheme, into their Body Corporate. To do this, a Body Corporate has to pass a motion to record a new community management statement that includes those changes for the bylaws. Now usually a motion agreeing to change the bylaws is required to be made by a special resolution at a general meeting. But this can sometimes change, depending on the type of Body Corporate bylaw in which you are implementing or changing to the CMS. For example, some By-Laws require … Some By-Laws which are changing or amending an exclusive use will require a resolution. So really understanding what it is you’re changing and what motion is required to be presented at a general meeting is really a critical factor when changing those bylaws.

Dan:  Elisha, is there a typical example of why a By-Law would change?

Elisha:  Yeah definitely. So at the moment, if we look at this holistically. Technology is evolving and the way in which we live is really changing. And in that case, bylaws often need to be updated or amended to, put simply, get with the times. So perhaps a bylaw has been recently found by the commissioner to be invalid, perhaps the bylaw is considered to be discriminatory in nature or perhaps not consistent with the act. Or perhaps even a lot owner no longer wanting his exclusive use car parking space has decided to give it up. There’s a range of different ways in which a Body Corporate bylaw would need to be amended.

Dan:  Now what about those occasions where the bylaw that’s going to be changed, is a little bit of a challenge to do so? Is there a time that would necessitate the Body Corporate members seeking the help of a law firm?

Elisha:  Yes certainly. So just by reviewing your bylaws and keeping up to date with the current legislation is really important. If you aren’t aware of what is enforceable or the recent decisions of the adjudicator in the commissioner’s office of whether pets are allowed, or what’s the ruling on towing, that sort of thing. It’s always good to seek advice from a legal advisor who can point you in the right direction in that regard. And certainly at OMB we have the experience and knowledge to be able to point you in that right direction. At the moment, if you are looking at your bylaws thinking, “Are they actually valid or should they be amended, or do we need to squeaky these up a little bit?” OMB are willing to provide a free of charge initial phone call and also a review of your bylaws, just to make sure that you are on the right track.

 

buying off the plan risks

The Risks of Buying Off The Plan

By | Podcasts, Property Law

On face value, the notion of buying something you haven’t yet seen poses plenty of questions, but yet plenty of people will buy a property that hasn’t yet been built and the decision has been solely based on the planned construction. Is this approach riddled with legal risks? In this podcast, OMB Solicitors’ Cameron Marshall discusses the matter.

TRANSCRIPT

Dan:  Cameron, is this a risky business?

Cameron: It can be, but as long as you do your inquiries and at the end of the day when the building is constructed you are happy with what’s been built as opposed to what you thought you were going to buy, it can all work out very well and very happy for everybody.

Dan: So, where is the starting point for somebody that’s you know, considering one of these buy off the plan proposals?

Cameron: Well the first thing you’d need to do is have a look at the plan and make sure you’re happy with what’s going to be built and then when you get to the end of the road and when it is built and you’re about to settle, you need to make sure that was what built was what you thought you were buying, so I’ve seen a lot of examples where people have got to the end of the day, ready for settlement and what is built is not what they thought they were indeed going to get. Possibly one balcony might be missing I’ve seen before and other examples are where a lot owner doesn’t even have access to their own property across common property, so they’re the little things that can come up.

Dan: Cameron. In your experience are there things that you see that quite often occur?

Cameron:  The main things are the common property areas and their exclusive use of those areas. They’re often forgotten about or changed in the building process. It’s something that’s very important when you’re buying, especially a unit of the plan, so you need to make sure again what you’re buying at the end of the day is what you contracted to buy and if you haven’t, you need to speak to a solicitor about it.

Dan:  Yeah, I was just going to say that. Is getting advice even prior to signing the paperwork a smart step?

Cameron: Oh yes, very much. Especially when you’ve got a large amount of disclosure that’s required in an off the plan construction contract, so you need to be fully aware of what can change and what can legally change through the process because the builder is allowed to make certain minor adjustments in the process themselves.

Dan: Cameron, thanks for joining me.

Cameron: Thank you very much.

 

 

gold coast estate lawyers

Why Simple Wills Rarely Work Anymore

By | Podcasts, Wills and Estates

The fabric of the traditional family unit has changed and continues to change! Once, Mum, Dad and the 3 kids, were locked into family bliss, or maybe not, but nevertheless they stuck together and consequently from an estate planning perspective, all was relatively easy. But now throw into the mix, second and third marriages, blended families and children that are now adults, who similarly may have broken relationships or other issues, culminating in the once simple estate plan, not being so simple after all.

In this podcast, Estate Planning expert, Richard Dawson of OMB Solicitors discusses the matter.

TRANSCRIPT:

Dan:     Richard, how complex are families today?

Richard:    Very complex, in a word. We have about half of our families are blended families, as you mentioned second and third marriages. Those blended families have children. There’s a number of ways that we can approach estate planning, and there are some common denominators that I always look for in my estate planning with clients so that they can avoid the traps and the pitfalls that may follow. Some of those can avoid family disasters.

Richard:  I think one of the most important things that a person can do as part of their estate planning is to discuss the affairs with the family so that the family members have a realistic expectation of what they can expect to receive by way of an inheritance and so that avoids surprises. It’s really important to discuss your intentions about how you plan to divide your estate, before you go, with your children and other loved ones. You should have open and frank discussions with family members so that you can manage their expectations and flush out any areas of conflict that may be unsettled between siblings for many and varied reasons. Adult children have their own expectations and beliefs. They also have their own investment strategies and their own family dynamics. We’re all human; we’ve all got issues. Quite often adult children have predispositions about what they should receive in the form of an inheritance, but more so some of them even expect to receive an inheritance in a certain way.

Richard:     What we’re trying to do as part of estate planning is to avoid a conflict in a family after death. Because poor estate, or no planning at all, is a recipe for a family disaster. It can also be an extremely expensive exercise if there is no will in place when someone dies.

Dan:  What you’ve just mentioned there … It does certainly deconstruct that whole idea that simply going down to the newsagent and grabbing a will kit isn’t going to cut the mustard.

Richard:  The $20 will kit is what you use before you spend thousands and thousands and thousands of dollars on your lawyer fixing up the problem.

Dan:  Mm-hmm (affirmative).

Richard:  I’ve seen will kits used time and time again, and very few of them are prepared properly and some of them are often invalid and a waste of money and time in the first place.

Dan: There are sort of other examples, I suppose isn’t there … Of organisation, big publicly owned organisations who may offer free wills or whatever the case might be, where you can actually have a lawyer not involved in the construction of these really important documents.

Richard: That’s right. The most commonly used service for free wills is the Public Trustee of Queensland. They promote the free will service, which is a great idea for the community. They do about … From memory, about 35,000 free wills a year. That’s great, but what happens is there a government body and they charge a percentage on your estate administration regardless of how easy or complex it is. With no disrespect to the Public Trustee because there are some very good people who work in there, but they are a government body and we all know that the wheels of the government machine roll very slowly. Whereas, if you’ve got a lawyer engaged in commercial practice, they’re very experienced and they’re usually specialised in estate administration, as am I. We have a lot of systems in place, we’ve got a lot of precedents in place which make estate administration as pain-free as we possibly can. It’s also important the quicker you work and the more experienced you are at it, generally means we can resolve estate administrations and finalise them for the beneficiaries and the executors in a time and cost-effective manner.

Dan:  Now some of the practicalities I suppose Richard, in terms of constructing a good estate plan, fundamental today is choosing the right executor?

Richard: Absolutely. The executor is the person, or persons, who are appointed in the will to administer a deceased person’s estate. They’ve got a number of roles and responsibilities; in particular, they’ve got to identify assets and liabilities of the estate. They’ve got to pay out any debts. They’ve got to pay for the funeral. They’ve got to pay out any estate administration costs. They would have to apply for probate if the estate warranted it. That’s all done before any of the beneficiaries receive their inheritances.

Richard:  There can be more than one executor, but there can be no more than four. I find four is a very impractical number. A sole executor has autonomy, so if you’re choosing a sole executor then it’s important to choose the right person because they will be stepping into the deceased’s shoes, identifying the assets, paying out liabilities, and in a word upholding the terms of the will. So that person must be experienced and have the necessary acumen to be able to administer an estate.

Dan:  Richard I’m assuming that key to this is trying to make the life of an executor as simple as possible. So is there something that can be practically done in terms of making sure that banking details and superannuation details, insurance, et cetera are readily apparent and available to the executor?

Richard:  Yeah, very much so. That’s a good point. I say to clients that estate administration shouldn’t be a game of Sherlock Holmes. The executor has a difficult enough job as it is, and the will-maker should really get their banking, superannuation, insurance, and other investments in order. This greatly assists the executor in managing the estate, and it also saves a lot of time and cost. All too often do I see executors asking for advice as to where they should be searching for a deceased’s assets or investments. The lawyer is not going to know. It should have been the will maker who told the executor, “When I pass away, I’ve got this bank account, I’ve got that superannuation, I’ve got that life insurance. Here’s all my details.” It makes the executor’s job very easy.

Richard: What I try and encourage people when they come in to do their wills … And there are times when I don’t know those person’s assets because they’re closely guarded or they might be new clients, I ask them to put all their bank details and 30 June statements in a sealed envelope, sign across the back of it, and then we keep that with the will. I ask them to update their details, and replace that envelope as time goes by. So that when the time comes for the estate to be administered, we can go to that envelope, open it, and it’s all there. It makes that so much easier than to be digging through all old, outdated paperwork, writing to banks, and … Basically going on a fishing expedition for stuff that may not be there.

Dan: Now we know that there has been this exponential increase in estate litigation, and I’m assuming that it’s front of mind for many people that are considering estate planning. Is there things that people can do to minimise the possibility of their estate being contested or disputed by someone within the midst that’s not happy?

Richard: Most definitely. Every time I take instructions for a will I consider who is an eligible person to contest an estate. A will maker must consider spouses, children, and dependents. Where somebody for whatever reason leaves out a spouse, a child, or a dependent, or leaves them a minimal amount, up goes the red flag. I talk to the client and I explain to them the pros and cons of leaving out or minimising an inheritance for those category of people. Because at the end of the day, a disgruntled beneficiary has the rights in all Australian law to contest an estate and apply to a court for what we call Further and Better Provision from the estate. To get that Further and Better Provision from the estate, lawyers are involved and it’s expensive. It’s very expensive. 99.9% of the time it comes out of the estate. There are exceptions, and there’s a Judge’s discretion as to whether or not if someone’s being vexatious or frivolous in their claim that they can personally have costs awarded against them. But in most cases it is commercially the option that the estate pays. Which means there’s less for everyone to go around. And the lawyers get paid.

Richard:   It’s just not necessary because of improper estate planning or no estate planning at all.

Dan:   Mm-hmm (affirmative). Look, it’s an area of law isn’t there where there are lots of myths, and unfortunately, a lot of these myths do inform the wrongful practices of people who are considering estate planning.

Richard:   That’s exactly right, yes.

Dan:  I’m thinking fundamentally just going through what you’ve discussed, having that open discussion with the family and others that may well be a beneficiary is really important. Secondly choosing the right executor, thirdly getting the legal paperwork in order. Also approaching this piece of very important work through the lens of what can I do to ensure that the estate is safe and not going to be disputed? They seem to be the take-home messages.

Richard: Absolutely. That’s for sure. Probably to add to that is keep everything up to date. If we have a look at where we were 10 years ago, our lives were completely different. We didn’t have iPhones, we didn’t have large superannuation accounts. We were building; property values in some places have doubled or tripled. We’ve had children, we’ve had grandchildren. They’re all the things why you would keep a will up to date and why you would review your estate plan, I recommend, every say three to five years depending on your circumstances. It’s really important to have an up to date will so that it reflects your current wishes, and it also meets your family’s expectations.

Dan:  Great advice. Richard, thanks for joining me.

Richard:  Lovely to have you. Thank you. Bye for now.

resolving construction disputes

How Builders Can Resolve Disputes Quickly

By | Ligitation, Podcasts

The building and construction space is the source of many legal disputes that arise out of complicated contract arrangements. This will often lead to the parties enforcing their legal rights, which can lead to costly and protracted legal battles. To better understand the issues, and what you can do about them, in this podcast, Commercial Litigation expert, Cameron Marshall of OMB Solicitors discusses the matter.

TRANSCRIPT:

Dan: Cameron, is there one intrinsic thing in these matters that tends to be the problem?

Cameron:   Yes, I find that it’s probably, it sounds pretty simple but the thing that can be done is for the parties just to read and understand the contract that they’ve signed, that’s probably the first place to start to try and avoid any disputes.

Dan:   Is it the case that most people don’t, is that common?

Cameron:  I’d say quite a lot unfortunately, it sounds very basic but I see it quite a lot from in my field of work all the time, that disputes could’ve been quite easily avoided by the parties understanding what they had to do, and knowing which way to go when a dispute arises, yeah.

Dan:  Is there something about the contract or particular clauses that you think that are typically the drama?

Cameron:  Yeah, well, not … Yeah, typically they come from a whole range of problems, because I’ve been doing this job for 20 years odd, so I see a lot of different ones. So when I see things such as something as simple as just the parties, or how they may be named in the contract, they need to make sure that the exact legal entity is named. That comes a real problem if we ever have to enforce payment for work being done if we haven’t even got the contractual parties correct, because it gives wriggle room to a party trying to avoid payment, possibly.

Cameron:  Other things like that come up is often when contracts have been negotiated, that’ll take a little bit of time and a start date for the commencement of the work might be included. But, often when the actual contract’s signed, that start date’s passed. So if we’re working on a practical completion date, we’re already halfway through that, we could be halfway through that period and the contractor will be facing some problems down the track, when the completion date’s quickly coming up and he might be getting pressed for completion, etcetera, etcetera. So it’s just those things that need to be sorted out beforehand.

Cameron: The construction schedule’s one that also comes up a lot. It’s one of those things that sometimes gets overlooked in the contractual negotiations, the contractors and the owners and the builders need to just make sure that the construction schedule is one that they can keep, and one that’s realistic. We don’t wanna, again, get into disputes with someone falling behind when the contract, construction schedule itself was just not able to be done.

Cameron: There are even situations where I’ve seen contracts not signed. So-

Dan:  Wow.

Cameron: We get a couple of hundred thousand dollars worth of work and the dispute arises and then one contractor says that they haven’t signed the contract. There’s legal ways of getting around that, but you don’t really wanna have to go there if you just check the contract and make sure it’s being signed by the proper party. So there are some of the examples that I see quite often.

Dan:  Now, Cameron, when things go wrong, where’s a starting point for people to sort of consider how to resolve this, is it typically the case that they don’t do anything at all, they let these things linger, or what’s the best way around it?

Cameron:  Well, again, let’s go back to the contract, let’s see what the contract might say. So let’s talk about a breach of the contract. Normal construction contract if someone’s noncompliant, maybe they haven’t paid a bill, maybe some bit of work is being delayed, then it’s something that can be addressed in the contract by simply providing a notice to the other party. Usually it has to be in writing, but once again, it clears the air and provides certainty as what the other party alleges isn’t done, and it gives time for the other party to do it, and if it’s not done then you can have a look at your legal rights, but again, you go back to the contract, see what it says, and it will guide you through a lot of the problems.

Cameron: There are dispute resolution clauses often in building contracts, now these can be used, I’ve seen one recently where we had a latent defect come up because of soil testing. And it needed to be, there was a dispute between the builder and the contractor, and it needed to be resolved so the parties went through their conciliation process and the arbitration process in the contract which required eventually an independent expert to decide whether it was a latent defect, latent condition sorry, and that resolved that issue so the contract could proceed. It’s not always the case the parties are happy with those rights, but it’s a lot better than going down the legal course if it can be done prior to incurring legal costs, yeah.

Dan:  From a practise perspective Cameron, is sort of traits that you see of builders who may sort of sit on these things longer than they should in terms of bringing the issue to a resolution, sort of practical issues that sort of emanate?

Cameron:   Well, the building site is, I’ve been on them before in my younger days, it’s a different world there, there’s a lot of trust between the parties and a lot of things spoken orally, which is the normal way to do it and good, but it’s not the good legal way to do it. So, what may be said by one party and understood, thought to be understood between the parties that things may be okay, may not be the situation and when a dispute does arise and the lawyers get involved, then again the contract will be the document that we all look at and will be the one that we’ll be trying to enforce. So, it’s one of those situations where on the building site you don’t wanna rest on your belief and understanding of what the other party thinks is the case, or what you think is the case, rather, let’s get it clarified, let’s go back to the contract, make sure what the parties are doing is understood, and then you can go forward. You don’t want, you thought it was the case, ’cause you’ll just end up in problems down the track.

Dan:  So, undeniably, the real take-home message for people listening to this podcast, those that work within, in the industry, is to get advice and make sure these contracts are watertight.

Cameron: Yes, it’s just really … They’re a daunting document when you look at them, but once you’ve had a little bit of experience with them, and you read them, it’s, they’re pretty straightforward and they all have the general similar tone and vein to them, so just understand what you need to do, and if something does go wrong, how do you address it? There are ways to go enforce your legal rights through the courts and the different tribunals, but a lot of that can be avoided simply by knowing what you need to do under the contract and doing that.

Dan: Cameron, thanks for joining me.

levies unpaid body corporate

What Happens When Body Corporate Levies Go Unpaid?

By | Body Corporate, Podcasts

If you own a lot within a community title scheme, then it’s likely that you may be aware that they are required to pay Body Corporate levies. However, it can be a conundrum for many of them, in particular, understanding what Body Corporate levies are, what they are used for, and what happens if you do not pay them, and how Body Corporates encourage the payment of these levies.

In this podcast, Body Corporate Law expert, Juliette Nairn discusses the matter.

TRANSCRIPT:

Dan:  Juliette, what are these Body Corporate levies?

Juliette: That’s actually a very good question, because we often come across it a lot within a Body Corporate. We have the commission members, who obviously know very well what Body Corporate levies are, but for those individual lot owners who live in a strata scheme, they might necessarily not know that they have Administration Fund levies, which is for daily repair and maintenance of the Body Corporate, a Sinking Fund levy, which is for capital work that a Body Corporate undertakes, and also insurance, which is very important to pay on behalf of a Body Corporate.

Juliette: What happens is, the Body Corporate, usually through a Body Corporate management company, will send out a notice and agenda for an annual general meeting, and it’s actually at that time that the lot owners need to read that documentation and look at what is the budget for the Body Corporate in terms of how much money does the Body Corporate need to raise to cover its day-to-day expenses.

Juliette:  We often talk about Body Corporates being a bit like a not-for-profit organisation because a Body Corporate has to get in exactly the amount of money that it needs to pay its expenses throughout a 12-month period. So it’s not a business that actually raises money, or has any revenue.

Dan: So Juliette, where is all this information enshrined? Is there a contract? Is there a document of some sort that somebody can go to and go, “Ah, that’s what my Body Corporate levies are,” or whatever the case might be?

Juliette: Unfortunately there’s not, because the only place it exists is in the legislation, which is called the Body Corporate Community Management Act, and an appropriate module that applies to each strata scheme.

Juliette: So, for example, that information about levies is not contained in your bylaws, it’s not contained in a community management statement. What happens is when I’m a purchaser and I might be looking into purchasing into a strata scheme, I would do what is called a Section 205 search, and that’s actually a letter that gets written to the Body Corporate management company on behalf of the Body Corporate, and the solicitors usually do that on behalf of an individual lot owner who might be buying into a Body Corporate.

Juliette:  What they get back is a little snapshot which says, “Oh, this is the budget for the Body Corporate, and this is what your contribution is, and this is how we pay it in quarterly instalments.” So, that’s the only information, really, that individual lot owners get. So often what happens is a Body Corporate management company might send out a welcome packet to its lot owners that actually explains in a little bit more detail what levies are. We also have a really good website which is the BCCM office website, being the commissioner for Body Corporate in Queensland, and they give a summary of what levies are and what is a Body Corporate debt.

Dan: Can there be a great divergence in what those levies are across Body Corporates?

Juliette: Yes. Definitely, Dan. It depends on the size of the building that you live in, actually, and even the type of plan that’s being recorded. A lot of the high-rise buildings are what we call building unit plans, and those building unit plans, you know, you’ve got one level stacked on top of the other. You’ve got charges for lifts and all sorts of other costs, and maybe even care taking costs or letting fees associated with that Body Corporate, as well as its normal admin.

Juliette: But if you live out, say Ribena or Matriba you might live in a duplex-style complex, or where there are actually individual homes under what we call a standard format plan, and those levies are very different, because they can be much lower from a Body Corporate perspective.

Dan:  So, what happens if people don’t pay these levies?

Juliette: Usually what happens is that the Body Corporate then can’t afford to pay its bills. We often have Body Corporates approach us, or committee members or individual lot owners within a Body Corporate, where they may have run out of money and can’t afford to pay the insurance for their building.

Juliette:  If a Body Corporate gets to that situation where it can’t pay its bills, it then looks very carefully at which individual lot owners haven’t been paying their levies on a regular basis, and will look at implementing processes or steps to recover those levies, which usually include receiving reminder letters. So the people, the lot owners, might receive a reminder letter from the Body Corporate management company, and then maybe a second reminder letter, then a final letter of demand, and also often the Body Corporate manager might make a phone call as well to try and get an understanding as to why that individual lot owner is not paying its levies.

Dan:  So, in contrast, if the lot owner doesn’t pay their levy, what are the penalties? Is there any sort of ramifications on them?

Juliette:   Yes. So in terms of the penalty which will apply to the individual lot owner, because the lot owner and the levies that they pay are basically the lifeblood to the Body Corporate, because there’s no way the Body Corporate receives other money, the penalties are actually very high. So one, not only are your levies outstanding, but the legislation specifically allows the Body Corporate to charge a 30% simple interest per anum charge to each and every levy that’s outstanding.

Juliette:   Now 30% simple interest adds up very quickly when you have outstanding levies, and it’s applied on a monthly basis. It’s actually far higher than what you would pay on a VISA card. It’s far higher than what you might pay, definitely, on your mortgage, and it’s certainly far higher than what you might pay on a loan if you got a personal loan if you’re in some hardship to pay your levies.

Juliette: The reason why the legislators made the 30% simple interest a general rule that applies across the board to all Body Corporates in Queensland is because they wanted lot owners to be penalised, because there’s no other way in which a Body Corporate can raise revenue. It can only come from those individual lot owners.

Juliette:  In addition to that, Dan, if you actually have, and the Body Corporate engages legal representation, being a Body Corporate solicitor to institute legal proceedings against that lot owner, that individual lot owner will become responsible for all the costs. So, the Body Corporate manager’s cost being expenses and outlays, and any expenses and outlays of the Body Corporate, including any legal fees that it incurs as well.

Dan: Is there Body Corporates out there that don’t pay their levies. Does that typically happen?

Juliette:   Unfortunately there are a lot of lot owners out there who don’t pay their levies. Because of the amount of information that we’re seeing these days, particularly through our Queensland Commissioner’s Office, we find that individual lot owners are better educated, particularly if they live in Australia.

Juliette: Fortunately we do have a lot of overseas investment, but some of those individuals who live in Bodies Corporate may not have Australian agents, and so, for example, if Chinese is their first language, or they’re in a country like Japan where the levy notices are being posted to them, one, it’s very difficult for them to understand the reason behind paying levies to the Body Corporate. They’re just aware that they’ve purchased the lot and paid that purchase price, but didn’t realise that there were individual, ongoing costs associated with the Body Corporate. So we do see much more foreign investment in that form.

Dan:  So what can they do to become more aware and make sure that they pay their levy?

Juliette: The best thing to do is that most of these buildings do have a Body Corporate manager appointed, and just contacting that Body Corporate management company and having a good conversation or an email conversation with the Body Corporate manager will enable you to get all of your information. They keep their roll up to date, and the best way is to have a role address by way of not only a postal address, but also an email address, so that they receive newsletters on behalf of the Body Corporate as well as any relevant information from the Body Corporate regarding their levies and their notices of contribution by receiving that information and understanding what levies are for, the Body Corporate manager, through their welcoming packets that they send to individual lot owners, that’s how people are encouraged to pay their levies.

 

 

 

Buying a Property on the Gold Coast? Contact OMB Solicitors today.

Before You Buy a Property on the Gold Coast, Listen to This!

By | Podcasts, Property Law

The Gold Coast if you know, is renowned for its diverse property appeal, but in 2018 property experts are saying that infrastructure in the Northern and Central suburbs will contribute substantially to an already booming market, not to mention the impact of the Commonwealth Games on the city, but if you’re an outsider contemplating buying into this flourishing market, there’s probably a few idiosyncrasies along with the stable cold hard truths, you need to know before buying that strategically positioned unit on the 24th floor.

Simon Bennett of OMB Solicitors discusses the risks and opportunities.

Dan: Simon is all this glitz and glamour of living on the coast potentially at risk of not doing your due diligence?

Simon Bennett: I think that’s right. I think sometimes purchases of property on the Gold Coast get caught up in the excitement and the glitz and glamour and fail to probably undertake what I would consider basic due diligence when looking to purchase property. Now that could be split up. I think there are two real types of category of buyer. You’ve got your owner-occupiers, so someone who’s buying to actually live in the property. Then you’ve got an investor who is someone simply making a property investment. I think there’s really key characteristic differences between those two.

Dan: How should each of those cohorts look at the market?

Simon Bennett: Well an owner needs to look at livability. Am I going to be happy living there? They really need to pay attention when they’re buying into a body corporate about bylaws and rules because these are things that will govern how they can occupy that property. They really need to determine whether they’re going to be happy living there, as well as whether it’s a good commercial purchase. Where the investor on the other hand, really shouldn’t be looking at, do I like it? Does it feel good? It’s really a numbers game. How’s the return? What’s the likely capital growth? They need to be a little bit more removed from the feel, and as I said before, getting caught up so much in what they might like because they need to remember they’re not going to be living there.

Dan: Simon, for the owner I assume that really looking at the bylaws is going to be important, and maybe even so for the investor. Particularly if they’re looking at Airbnb and those other opportunities, but if we talk about the owner first up is what about the bylaws that they should be really analysing or wanting to understand?

Simon Bennett: Sure. Well the bylaws in really basic terms are set as the rules and regulations by which the owner or the occupier of a unit in a body corporate are governed by. Now these are designed to protect an owner, but they also restrict you. Now when I say they protect, what they do is, they govern all owners and say for example, you can’t change the external appearance of your unit. You can’t hang your washing out over your balcony, so that the view of the building doesn’t get the look of a slum or a building you might see in Hong Kong for example, whereby the washing is all hung out the side. That protects values, but it also restricts what you can do. Another common one is you can’t have loud late night parties, which restricts your use of your unit, but also it protects the general common ownership from being disturbed by other owners.

Dan: Simon, is there a divergence among what bylaws are from a complex to complex? I’m assuming that there may well be some that have very, very tight bylaws and others that are a little bit looser.

Simon Bennett: Yeah, that’s correct. It’s important to look at these if you have a specific concern. One of the most common ones we see is with pets. Now this is a really sensitive topic. Quite often a purchaser, or a potential purchaser in a complex, will not go ahead with a purchase if they can’t take their animals with them. It’s important to read those. Know what your specific requirements are if you are planning on letting, if you are planning on living there and taking animals et cetera. To check those bylaws have an experienced, qualified lawyer read through them, and point out what is important to you.

Dan: Okay. Let’s talk about the investor. There’s all this hullabaloo and excitement around Airbnb, and stories about people making thousands and thousands of dollars each week on their property. The investor that wants to buy, say, a unit at Surfers Paradise has got visions of being able to Airbnb it every night. What do they need to ensure is in those bylaws to allow them to do that without sort of running foul with the body corporate?

Simon Bennett: Sure. It’s important to read the bylaws and find out if there are any restrictions in the bylaws on short-term letting, then a qualified lawyer would need to look further beyond that and see whether that constitutes a valid bylaw or not. It may depend on what the original approval or the development approval was granted to that building for. If there were restrictions on what that building could be used for it would come back to town planning, but it is important as an investor to work out what you can and can’t do with it, not just with that letting process, but whether you’re going to put it with an onsite agent, whether there is an onsite letting agent, or whether you’re able to use a commercial letting agent maybe down the road.

Dan: Okay. Now in terms of the contract, or signing the contract, I mean it never ceases to amaze me how many people will go down and chase the cut-price conveyancing law firm to do their work. When in fact it’s a significant asset for many people. What are the risks of going down that path?

Simon Bennett: Yeah. Look, it amazes me as well. I quite often use the analogy of an individual who’s getting brain surgery doesn’t go out and find the cheapest brain surgeon. You generally want to find the best. For most people, buying a property of this nature is one of the biggest monetary financial transactions they will undertake in their life. They shouldn’t be looking at, necessarily, the cheapest option. They should be looking at getting really good value for their money. They should be looking at engaging an expert in that area. I am an accredited specialist by the Queensland Law Society in Property Law. That is an accreditation given by the Queensland Law Society saying that this person is an expert in that area. It’s really important because let’s get to the contract that you mentioned. Realistically, before you sign a contract you should give your solicitor an opportunity to peruse it for you.

Simon Bennett: As a general rule at OMB Solicitors we’re more than happy to look at our client’s contracts before they sign them, no obligation, and no charge. We would rather look at these contracts for our clients up front to say, “Yes, it’s all fine. You’re okay to sign it or gee, we really need to mend these clauses.” Quite often it’s something really technical. It may be the use of a simple word, may or must or something of that nature, that may need to be amended, but the ramifications are quite huge. What we say is before you execute your contracts, get them checked just for piece of mind. That way we don’t have to sort out problems later on.

Dan: Getting quality legal advice just makes common sense.

Simon Bennett: It does. I must say there is a misconception that you want to buy, I want to sell, straightforward it just happens and people go and put the importance on that transaction that they should. I can tell you this is that these transactions often have major problems, end up in court being litigated, and huge amounts of money are spent. The benefit of having an experienced practitioner looking after your matter is that they will have the experience to, not only deal with problems when they come up, but most often anticipate the problem before it becomes a major issue and cut it off at the pass, and things will run smoothly through.

Dan: Yeah. It’s very true isn’t it, I mean given that OMB Solicitors is a diverse practise law firm, you’ve got their back there should things go off track.

Simon Bennett: That’s right. Quite often throughout the course of a matter like this if we do have an issue I will go and consult with our specific body corporate team about body corporate issues, or I will go and discuss with our litigation team what if A, B, or C occurs how do we stand if that ended up in a court? We can use those other areas of expertise in the firm to assist the client quite informally before the problem arises.

 

airnbnb body corporate

I Want to List My Unit on Airbnb. Do I Need Permission from the Body Corporate?

By | Body Corporate, Podcasts

Have you heard of Airbnb? You probably have and heard also about owners of properties who are making significant money letting their place out on the Airbnb platform. But if you’re an owner of such a property in a strata complex, are you allowed to do it? It’s a commonly asked question, and in this podcast, Body Corporate expert, Tom Robinson, a lawyer at OMB Solicitors, explains more.

TRANSCRIPT:

Dan: Tom, for those unaware of what Airbnb is, what is it?

Tom: It is that short-term, do-it-yourself type letting, which essentially means as an owner, you can let out part or all of your lot to someone else via that online marketplace. Which is interesting because we have been seeing real estate agents are taking control of people’s Airbnb accounts and operating it like another type of rental units for their portfolios.

Dan: It’s been a game-changer hasn’t it? I mean, for many people that once would struggle to try to let out their property, now they’ve got this incredible platform that reaches the masses.

Tom: It does, and even on that, as a bit of an interesting fact. More than 50 million people in more than 34,000 cities around the world are using Airbnb. So it’s big, and it’s understandable that it’s here to stay, and there’s a reason why our body’s corporates are wanting to know when owners are using and listing their lots and units on Airbnb.

Dan: At a practical level, if I’m on the Gold Coast and I own a unit within one of these body corporate complexes, do I need to actually ask permission?

Tom: Look, it’s a very good question, and I’m going to answer it in a typical lawyer way, and I’m going to say maybe. It’s all dependent on the type of body corporate, being that we will have bodies corporates that will be affected by the use of Airbnb, and there will be bodies corporates that are not so affected by Airbnb. And it comes down to not only the type of body corporate, but the regulations, so those bylaws that are in place and apply to all owners and occupiers.

Dan: Is there examples of Airbnb and how it might impact upon the body corporate? By positively and negatively?

Tom: Yeah, definitely. From a good perspective to start with is looking at bodies corporates that are probably negatively affected. They’re the ones that are more or less are going to want to know when lot owner’s listing their unit on Airbnb. Those types of effects that we have seen come across, mostly relate to the type of disruption that is occurring, and that’s by way of your increased noise, your increased foot traffic, the increase in use of common property facilities that the body corporate, the actual physical body corporate itself is not used to.

Tom: Which leads into other issues like insurance. Those bodies corporates that are not designed for short-term accommodation poses a risk to the body corporate in terms of their insurance policy, and whether or not an owner using a lot for a short-term accommodation basis where the building or the body corporate was never designed that way. Is that going to increase premiums, and some insurers are saying “Yes.” Is there appropriate fire safety services systems in place in those types of bodies corporates that aren’t designed for that short-term accommodation like a hotel-style body corporate? You know, if they don’t have those types of fire safety systems or evacuation plans in those buildings, and is that a risk if something does go wrong. Those are the effects that one mostly is seeing by Airbnb and most bodies corporates that are not designed, and never were designed for that short-term type accommodation.

Dan: For these body corporates that are interested n in moving down this path, what do they do? I mean this sounds like an awful amount of work to get ready for this.

Tom: Look, there’s a lot involved, and I think from a body corporate’s perspective they’re generally quite limited. If we look at a couple of quick examples, taking an example of a high-rise building in Surfers Paradise, which has very few permanent residences, it’s designed as that holiday-maker’s hotel-type building. Is the whole concept of that body corporate has been designed for short-term accommodations?

Tom: When we look at those smaller bodies corporates, those little three-story walk-ups that might be down at Burleigh Heads where a majority of residents are permanent, they’re either owner-occupiers or permanent letting. They don’t have an on-site management or any letting staff.

Tom: When we look at those impacts that are on that body corporate, how does the body corporate then try to regulate that Airbnb? And that is by way of its bylaws. The biggest issue with regulating through our bylaws is we don’t have a lot of guidance to go by in terms of what our legislation says, except that our bylaws cannot be oppressive or unreasonable. And with respect to that, we can’t restrict or prohibit someone from using their lot in a lawful way. You’re allowed, as an owner, and your individual property rights, you are allowed the usual lot and let your lot out in any way that is lawful.

Tom: Where we have seen a bit of a win for not so much bodies corporates, but a win for regulating this short-term accommodation and protecting the bodies corporates who haven’t got it in there, is by your local council laws. So Gold Coast City Council, as of 2016, require an application for material change of use if someone wants to use their lot for short-term accommodation. That application carries a application fee of over $8,000, which is quite hefty-

Dan: Yeah.

Tom: … Potentially off-putting for people who are using their lots in short-term letting.

Dan: Tom, the starting point for a body corporate that might be listening to this podcast, what do they do on a case that they’ve got an increasing number of people within their complex that are wanting to play in the Airbnb patch? What do they do now?

Tom: The first thing and the best thing to start with, is review of your bylaws. You want to review your bylaws which you can update, basically at any time throughout a year, and that is having that review to identify what areas need to be regulated more. So the bylaws, as we say, can’t be oppressive or unreasonable, which means they can’t be prohibitory or restrict the use of a person’s lot. But what they are designed to do is regulate, not only the use of common property, but to a smaller extent the use of someone’s lot and their lot property, to a point where the use of the common property and lot doesn’t cause a nuisance. Doesn’t disturb the peaceful use and enjoyment of other people, owners and occupiers, within that body corporate.

Tom: A review of your bylaws is a starting point, because in there you can look at regulating and putting in requirements that an owner must notify the body corporate of their lot being listed in Airbnb. They must ensure that the owner of the lot provides bylaws to every person who comes and stays in their lot under the Airbnb platform. The only difficulty with this, and this is where we will be looking to our legislative writers, is the enforcement of that. Our current enforcement process under our body corporate legislation, is the Commissioner’s Office for Body Corporate and Community Management, the issue that we face is trying to reach someone who is in breach of the bylaws when they’re gone within four days. We don’t have a process, a dispute resolution centre, that can deal with that type of complaint in such a short turnaround. Which means the breach happens, and then is remedied, because they’re no longer there. So that’s where we’re probably falling short.

But at least the bylaws are an informative way to regulate as best we can, as a starting point to Airbnb, and then to supplement that, is looking to our local governments and making sure that those laws are in place. Like Gold Coast City Council putting in the material change of use application requirement. And if lot owners aren’t complying with those local laws, it’s up to our local governments to enforce that, and that is via a notification basis. So yeah.

Dan: There’s a lot to it, isn’t there?

Tom: There is. There is a lot to it, and there’s a lot that we’re hoping to see come about, and we are starting to see that change, and we’re starting to see that there will be an ability under the bylaws, hopefully in the coming years, for a property law reform that we’re going for at the moment, where we might be able to have some more ability to not over-regulate, but have a more of an ability to deal with these types of matters through our bylaws. Which is realistically the best ability and tool for a body corporate.

Dan: Tom, thanks for joining me.

Tom: Thank you very much, Dan.

 

 

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