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Author: Jacqui Brauman

by Jacqui Brauman Jacqui Brauman No Comments

Use a solicitor for conveyancing

As a solicitor, of course I’m going to say that someone buying or selling a property should use a solicitor (lawyer) to do their conveyancing work. But what are the reasons why I recommend this and what are the primary differences in the service provided?

Training

The training and licensing requirements for conveyancers are different in each State, so everything I’m going to address relates to Victoria. 

To be a solicitor, someone has to have a Bachelor of Laws, at a minimum, which takes the equivalent of 4 years of full time study. During that bachelor (undergraduate) degree, they will study Contract Law for 6 months, Property Law for 6 months and Land Law for 6 months. Along with all the other units of study, the Bachelor of Laws teaches law students to think as lawyers. 

conveyancing

After completing the degree, to be able to get a practicing certificate as a solicitor, the person would need to complete a Graduate Diploma in practical legal training, which takes another 6 months. This is when they are exposed to the practical aspects of conveyancing. 

Once they have a practicing certificate, solicitors are required to undertake ongoing legal training each year to be eligible to reapply for their certificate annually.

There are different levels of practicing certificate, and to be able to operate a trust account, a solicitor must pass an extra course on trust accounting regulation and compliance, and pay an auditor twice a year to audit the account. Most law firms have a trust account, but many conveyancers do not.

To be a conveyancer, someone must have a Diploma in Conveyancing, which takes the equivalent of 3 months of full time study. They then need to have a certain amount of practical hours of experience on the job to be signed off to get their own licence. 

Industry

Both solicitors and licensed conveyancers must hold professional indemnity insurance, and both need to be registered with their industry body to have a licence issued to them – this is the Law Institute of Victoria and Consumer Affairs Victoria respectively. 

In NSW, they were the first to deregulate conveyancing and let licensed conveyancers into the industry, taking the work off solicitors. There was a good reason for this, because solicitors in NSW charged on a percentage basis depending on the value of the property. This has never been the case in Victoria. Solicitors have generally charged a fixed fee for conveyancing, so the gauging wasn’t going on in this State. Arguably, there was no need to deregulate conveyancing in Victoria in the first place. 

Cost

Solicitors cannot compete with conveyancers for cost, so what they compete on is value for money and quality of service. Conveyancers generally work for themselves, and often work from home, so they don’t have the overheads and costs that solicitors have. Solicitors have offices, staff, higher insurance, more regulations to comply with, and often operate trust accounts which require regular audits. 

Solicitors do fixed fee conveyancing in Victoria, as do conveyancers. Conveyancers are generally a couple of hundred dollars cheaper. 

In the Office

Conveyancers generally work from home and work alone. 

Solicitors generally work in small, medium or large law firms with support staff. Quite often there are combined decades of experience, and support staff are often qualified conveyancers who didn’t want to go out on their own. 

Solicitors operate trust accounts which make settlements much easier in most cases, particularly for purchasers. Instead of the purchaser running around getting bank cheques and getting them to settlement, the solicitor can ask for all the funds into their trust account, and they do all the running around for you (hence, quality of service).

When things go wrong

Conveyancers have a very narrow scope. When something usual happens, they have to refer you to a solicitor. 

If the contract falls over and becomes a fight, the conveyancer will need to refer you to a solicitor. 

So better to start with a solicitor that can handle everything in the first place!

Here’s more on buying and selling property.

by Jacqui Brauman Jacqui Brauman No Comments

Offering vendor finance

So you’re selling your house, investment property or business? The person you’re negotiating with to buy it from you doesn’t have enough money to pay you what you want. Either the deal falls over, because they cannot pay you your asking price, or you can get creative and offer to help finance the deal for them. But vendor finance may be your solution.

If you don’t know what vendor finance is, read this first.

There are two prime ways in Victoria to offer vendor finance. Both have their advantages and disadvantages, so it really depends on your circumstances and what you feel most comfortable with. 

Terms contract

With real estate, you are able to enter into a long term Contract of Sale that involves instalment payments, and the purchaser taking possession of the property before making the final payment. 

You must pay out your existing mortgage to be able to enter into such an arrangement, or at least pay the mortgage off with one of the first instalment payments before the purchaser takes possession of the property. 

When the purchaser takes possession, other than your contractual rights, you can take security over the property in one of two ways:

First, you can retain the Certificate of Title. You don’t register any Transfer of Land, and you remain the registered proprietor of the property. The rates will still be in your name, so you will continue to pay these until a final settlement. 

Alternatively, if you don’t want to remain the owner, you can register the Transfer of Land, so that the purchaser is the registered proprietor of the property. You would then register a mortgage over the property based on the terms Contract of Sale. The purchaser couldn’t sell or otherwise deal with the property without your consent, and you would have rights to recover the property and resell it if the purchaser failed to pay you (just like a bank mortgage). You would also have your Contract of Sale that you could sue for damages under, if the purchaser failed to pay. 

Mortgage

Instead of taking a mortgage under a terms Contract of Sale, you could just settle as usual on the Contract (after 30 or 60 days), and then you would take the position of the bank. You would sign loan documents which would entitle you to instalments and interest over a particular period. You would then rely on that loan to register a mortgage over the property.

These methods offer much more security when you are dealing with real estate. If you are dealing with a sale of a business, you could negotiate a payment by instalments under the Contract of Sale. You could specify how you wanted to secure those payments, whether the Contract gave you a right to take over the business again, or whether you were allowed to register a security interest on the Personal Property Securities Register (PPSR) over stock or generally over the assets of the business. 

Alternatively, you could enter into a commercial loan arrangement, with or without some negotiated security, as you could just rely on the terms of the loan agreement if the purchaser failed to pay.

For more on buying and selling real estate, click here.

by Jacqui Brauman Jacqui Brauman No Comments

Protections for Small Business

As of November 2016, small businesses have some of the protections that consumers have under the Australian Consumer Law.

Traditionally, consumers are protected from unfair terms when buying goods or services from businesses, and this will continue. These protections will be extended to small businesses, so that small businesses will be protected when buying goods or services from big businesses, or even from other small businesses.

A small business will be any sole trader, partnership, or corporate entity that has less than 20 employees. There is no other revenue test, or any other test for a small business. So if you are a small business entering into a contract to sell goods or services to another business, it would be important for you to know if you were dealing with a small business or not.

The other condition is that the contract for the goods or services must be under $300,000, or if the contract is for services over more than 12 months then the price cannot be more than $1,000,000.

For big business, this means that they will need to review their terms and conditions for contracts with small businesses, to make sure that there aren’t any unfair terms.

So what are some terms that could be found to be unfair?

  • A term that allows the big business to terminate the contract, but not the small business
  • A term that penalises a small business for breaching or terminating the contract (like having to pay a fee)
  • A term that allows the big business to vary the terms of the contract, but not the small business
  • A term allowing the big business to change the price of the contract, without allowing the small business to terminate the contract
  • A term that allows the big business to vary the characteristic of the goods or services, without allowing the small business to terminate the contract
  • A term that allows the big business to assign the contract to someone else, without the consent of the small business
  • A term that tries to limit the small business from suing the big business
  • A term that tries to limit the evidence that a small business could use against the big business, or
  • A term that tries to shift the burden of proof onto the small business.

Small businesses that enter into contracts with big businesses and other small businesses might want to have two different versions of their standard terms and conditions. The small businesses will need protections from unfair conditions, but the big businesses get no such protection.

If you’re a small business, then you now know that you don’t have to be pushed around by bigger businesses anymore, and that you have avenues to seek remedies for unfair terms of contracts you enter.

Here’s some more information from the ACCC.

by Jacqui Brauman Jacqui Brauman No Comments

Homemade Wills and Will-kits

Another homemade will has just cost a family tens of thousands of dollars in Western Australia, with the family having to work out what the Will actually says in the Supreme Court. 

The will-maker must have thought they were very smart, but the language used in Wills has been developed over hundreds of years, for a reason. There are phrases that create trusts, and gifts, and duties and instructions that are in-built, not having to be spelt out. 

This Will was a 14 page will, without numbered paragraphs, but headings on each page dealing with different assets. Despite thinking he was thorough, the will-maker left out instructions as to what was to happen to the proceeds of the sale of many of the assets. He put time into giving instructions that he didn’t need to do, about how assets were to be sold, and about opening special purpose bank accounts, but then failed to direct who they were to be left to!

This case caused a flurry of comments from lawyers around the country on LinkedIn, and I was directed to a fantastic article written about a year ago by Darryl Browne. He succinctly confirms that will-making is not like filling in a form, although will-kits and online wills try to fill this gap. 

Darryl’s article highlight a few priceless comments by Supreme Court judges over the years:

‘Homemade wills are a curse”

“All of this could have been avoided if the testator had consulted a lawyer and signed off on a will which reflected his wishes. There is no question but that engaging the services of a properly qualified and experienced lawyer to draft a will is money well spent”

“But way [this will-kit will] has been drafted is difficult, and the parties have been put to the trouble and expense of coming to the court seeking directions as to its proper interpretation. If the will had been drafted by a competent legal practitioner, this problem would not have arisen, and the parties would have been speared a great deal of trouble and expense”

The finest being about a ‘friend’ who helped prepare a will: “The deceased either was offered, or sought, the assistance of an entirely unqualified person to prepare these three documents. That person would no doubt protest that she was just trying to help a friend. She was no help at all. A claim of good intentions is no defence. The fact is that unqualified people who intermeddle in the preparation of documents that have legal operation cause great harm. The defence for such officiousness is often one of trying to save the will maker money. That is sterile. This deceased could have had several wills professionally prepared for a fraction of the cost that has been imposed on her estate by this application. The legal system should not be blamed for that expense”

It will be interesting to see in the future whether friends who ‘intermeddle’ with the creation of wills could actually be charged with providing legal advice without the proper qualification, or at the very least be legally liable for the cost the estate incurs in having to get a badly drafted will interpreted by the Supreme Court. 

We do offer an online will service, for very simple situations, but we also offer a review service so that you can have your draft professionally reviewed, so that the cost of the online will and review costs less than a properly drafted will. This small cost saving might make you sleep at night, but with the cost of a will starting from $350, it’s a very cheap solution to preventing your hard-earned assets disappearing in legal fees later. 

by Jacqui Brauman Jacqui Brauman No Comments

How to Control Your Legal Fees

Depending on who you talk to, legal experiences can range from horror stories to feel good movies – but there is a way to control your legal fees. The genre of your legal experience as well the harsh reality of legal fees is however, to a large extent, within your control. 

Is there an alternative to going to a lawyer such as mediation?

Mediation can be used to facilitate negotiated settlements with the assistance of a neutral third-party mediator. This allows the parties to control the decision-making process. Mediation is not a fix all remedy for example, it will not be appropriate for those matters where time is of the essence and or for matters that involve violence or risk to a child. 

Find a Lawyer with a Good Bedside Manner

It is important to assess your lawyer’s bedside manner on your first meeting, just like you would when ‘shopping’ for a doctor. That’s not to say that a good personality is enough, or that your lawyer is your best friend. A lawyer’s credentials and reputation is paramount, but you must also be able to instruct them according to your needs and you should be comfortable with their guidance. A good relationship with your lawyer will make you comfortable enough to relay what is a priority for you and on the flip side, your lawyer will be able to guide and advise you without causing you anxiety, stress or offence. It then leaves time for concentrating on the issue at hand – and you have more control of your legal fees. 

Diagnosis and Prognosis

Everyone is an expert and Google has a lot to say! A lot of advice is not necessarily the correct advice. It is important to obtain the right legal advice about your matter so that you are aware of your rights and obligations. If you’re running around doing a whole lot of unnecessary things, you won’t be in control of your legal fees. For example, if you have issues regarding a parenting matter, consult a lawyer that is experienced in Family Law. Once you have an accurate and reliable diagnosis, a prudent prognosis is sure to follow. You must know by now be equipped with the best course of action that will be unique to you and your counterpart i.e. an agreement at the outset of a matter is ideal for some parties and not appropriate for others.  

The Value of Respectful Communications 

‘An ounce of honey attracts more flies than a ton of vinegar’

You can be succinct and firm about what you wish to achieve but good manner and form will allow your wants and needs to be received better than if you relay them with emotion and ambiguity. Compromise can be reached easily when parties realise that they have different hierarchy of needs and wants, i.e. what is important to you may be what the other person is willing to compromise on and vice versa. Above all, be mindful that the legal system will not tolerate well vindictiveness and retaliation. Remember! Traits such as being reasonable and communicative have a direct correlation to the amount of time that your lawyer will intervene and act on your behalf and the flow on effect of your lawyers’ fees.

The Role of Your Lawyer – Advocate or Therapist?

Your lawyer should have a good bedside manner, but his or her role is to serve as your advocate and be a source for legal advice. They are not to be confused with counsellors, best friends or therapists. Hourly rates for professional counselling are significantly less than hourly legal fees and are often covered by extended health plans. Even if you don’t have extended health benefits, it is more cost effective to discuss the emotional aspects of your case with a psychologist or other counselling professional than with your lawyer. If you’re not calling your lawyer every day, you can control your legal fees.

by Jacqui Brauman Jacqui Brauman No Comments

Essential Advice on Choosing a Lawyer

Not all lawyers are made equal. Just because they’re a lawyer, it doesn’t mean they know the area of the law that you need help with. Also, the way legal firms run their businesses are very different – you need to be aware of a few things when you are choosing a lawyer.

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