April 8, 2019 in Commercial Law
Slapping trespassing animal activists with on the spot fines is a weak deterrent and offenders need to be brought before the courts, says leading agribusiness legal firm Creevey Russell Lawyers.
Creevey Russell Lawyers Principal Dan Creevey said government needs to do more to protect those businesses being impacted by animal activist groups.
Mr Creevey said the recently announced Queensland Government plan to crackdown on animal rights protesters by giving police and agricultural officers power to issue on the spot fines to trespassing extremists is inadequate.
“Issuing of fines is inadequate and is a weak deterrent,” he said. “Court proceedings need to follow, and courts should consider recording convictions against those breaking the law.
“We live in a democratic society. If activists want to protest, they have a right to do so, but there are right ways and wrong ways to do things, and trespassing on land, and impacting businesses, is not the right way.”
Mr Creevey said the economic impact of the actions of animal activist groups entering onto private property, chaining themselves to equipment, and disrupting businesses is significant.
“During the period of time the activists are present on their property, farmers and businesses are unable to operate effectively, costing them revenue,” he said.
“Farmers and businesses should be able to go to work and go about their business without fear of being impacted by animal activist groups.”
Mr Creevey said although farmers and businesses may be frustrated as a result of these actions, he urged them to seek appropriate assistance.
“If farmers or businesses are impacted by the protests of animal activist groups, we strongly encourage individuals to not take matters into their own hands. If you are in this situation, contact the police and other authorities urgently and obtain their assistance.”
Further Enquirers, please contact our Litigation Team:
PrincipalPh: +61 7 4617 8777
April 5, 2019 in Commercial Law
Choosing the perfect premises to run your business from can be a tough process, but it is just the first step in securing your location and opening your business’ doors to the public. The process of lease negotiation and the agreement that is ultimately reached between a landlord and a tenant can set the tone of the relationship between the parties for years to come. Although you and your landlord may have reached agreement on many of the commercial terms of the lease agreement (and may have even entered into a heads of agreement setting out those terms) it is crucial that the lease is properly reviewed and negotiated and that you receive the appropriate advice so that you are aware of all of your rights and obligations under the lease.
#1 WHAT CAN BE NEGOTIATED
As a tenant you may feel like you have no power when it comes to negotiating the terms of your lease. You may find yourself questioning which lease terms are actually negotiable and which are already ‘set in stone’. Technically speaking all of the lease terms are open to negotiation including the rental amount, term of the agreement, obligations to pay outgoings, fitout and the make good requirements etc. A number of the additional but still fundamental terms and conditions may not have been covered in initial discussions with the landlord or in any heads of agreement and therefore still need to be negotiated.
It’s important to remember that if you don’t make requests and raise concerns with your landlord at the outset you may not have another opportunity to re-negotiate the terms later on. On the other hand, there are a number of terms and conditions that are considered to be ‘standard’ for certain types of leases. A solicitor will be able to provide guidance as to which clauses of the lease are the norm considering the type of lease being entered into and which points you should consider pushing back on with your landlord.
#2 BEWARE THE LANDLORD FRIENDLY LEASE
The landlord’s solicitor will typically prepare the lease. In addition to many of the lease terms and conditions not having been discussed, the landlord’s solicitors will almost certainly present their standard lease weighted in the landlords favour. This ‘landlord friendly’ lease could include a requirement for additional fees to be paid to the landlord (including open ended administrative fees) or legal and other costs associated with negotiation and preparation of the lease even if this was not agreed (unless the lease is a retail shop lease in which case the legislation prevents the landlord from charging the tenant for these costs), or other clauses which are to the tenant’s detriment.
With the landlord’s solicitor preparing the lease you are also relying on the landlord having provided clear and fulsome instructions to their representative. If any agreements between you and your landlord are not communicated or miscommunicated to their solicitors it is important that you have a second set of eyes review the lease to confirm it reflects the agreement reached.
The solicitor you engage should conduct a full review of the lease, take your instructions and negotiate amendments to the document in order to strike a fair balance between the parties.
#3 KEY TERMS AND CONDITIONS
The terms of the lease negotiated could remain in effect for a number of years and could have potential impact on your business operations. For example, the permitted use under the lease must reflect all business activities you intend to carry out on the premises. If this is not properly negotiated and described in the lease your business activities themselves could be a breach of the lease and cause for the landlord to terminate the lease.
Some other key terms and conditions of the lease which should be properly negotiated include:
- Repair obligations – as a tenant you must be aware of when you are responsible for repairing damage to the premises. For example, are you responsible for repairs to the premises where damage is caused by flooding or some other naturally occurring event? Must you repair damage caused by vandalism? What if your staff are responsible for the damage?
- Terms of Guarantee – if you are entering into a lease as a director of a corporate entity, and the lease contains a director’s guarantee, you must ensure that you fully understand the repercussions of that guarantee and when you will be personally responsible for complying with the obligations of the corporate tenant entity.
- Entire Agreement – most commercial leases will include an ‘entire agreement’ clause which states that the agreement executed by the parties represents the entirety of the agreement. The effect of this clause is that previous correspondence or representations by either party (including any heads of agreement) will not be deemed to be part of the agreement and therefore not binding on either party. It is important that this clause is included in your lease so that the landlord is not able to rely on any previous written or oral agreements regarding terms and conditions that are not included in the lease. The flip side of this is that you must ensure the lease actually reflects what was agreed under your heads of agreement (or otherwise) as you will not be able to rely upon any previous agreements, statements or representations.
- Redevelopment – if your commercial lease contains a redevelopment clause the landlord may be able to terminate the lease prior to the expiry date to carry out major redevelopment works. If this clause is included in your lease you must ensure the lease requires that the landlord adequately compensate your for your loss. You may not want to accept a lease which contains a redevelopment clause as this will greatly impact your business operations.
The terms of the lease and therefore your rights and obligations will likely be binding for a number of years following execution so obtaining advice prior to signing is essential.
Ph: +61 7 4617 8777
March 20, 2019 in Commercial Law
Selling a business is a complex process and requires many boxes to be checked to ensure a smooth transition from one owner to another. The first and often overlooked stage is seller’s due diligence.
The purpose of seller’s due diligence is for the seller and their advisors to investigate the business, its assets and business relationships to make sure all issues, including some that may not have even been thought of, are ironed out before the business goes on market.
A buyer will almost certainly carry out a thorough due diligence of a business before they commit to buy it, usually during a due diligence period under contract, and you can guarantee that if there is a problem, their advisers will find it. Each issue with the business that is discovered will erode the buyer’s perception of the value of the business and doubt will start to creep in.
If you are considering selling your business in the near future we recommend reviewing and checking off the following legal factors:
Is Your Business Name Registered?
Although this step may seem like a no brainer it is crucial to check your business name is registered and that it is registered to the current legal owner of the business.
If you have your Certificate of Business Name Registration this will not be an issue. If however you are unable to locate your certificate you can easily check on the ASIC Connect site.
Once you have searched your business name you will be able to check:
- who owns the business name;
- the company’s ACN (if owner by a company);
- if it is currently registered; and
- the registration renewal date.
If any of these details are not what you believe they should be, they will need to be rectified before you list your business for sale.
Are The ASIC Details Correct?
Another item to consider are the ASIC details of the company. To find out these details, you will require a Company search of your business. You are able to purchase a current company extract from ASIC Connect. The search will show you who the ABN is registered to.
By checking who the ABN is registered to you will also be able to see the directors of the business. You will need to consider if there are any directors listed who may not agree to provide personal guarantee to transfer the business. If you think there may be issues we recommend you engage a solicitor to advise you regarding removing their name(s) from the company register etc.
Like our business name, you will also need to check the ABN registration is current and that the business is listed for GST. If it is not, you may need to do so prior to putting your business on the market.
You will also need to know your ASIC Login details. This is important as you will need to be able to login to transfer the business name to the new owner at settlement.
What PPSR Charges Are Registered Against Your Business?
It is important to check the Personal Property Security Register (PPSR) for any third party interests that may be lodged against your business. A prudent search would include a search of your ACN, ABN and business name. Some of these charges you may not be aware of, or may be outdated and will need to be removed prior to the sale of your business.
It is vital to conduct and check the PPSR search as it may show items that will deter potential buyers. A long list will be off-putting to many buyers as it may lead them to think that a business is run on credit.
If obsolete security interests are registered against the business, for example in favour of a previous supplier, you or your solicitor will need to obtain releases.
Have You Got A List Of Plant And Equipment?
Prior to putting your business on the market you will need to compile a list of all of the business assets. The list will need to include all plant and equipment, furniture and fittings that will be handed over to the buyer at settlement. You should also consider preparing a separate list clearly identifying anything that is specially excluded from the sale, e.g. the owner’s motor vehicle(s) or pieces of art work located at the premises.
If any of your businesses equipment is rented or leased, and the buyer wishes to take over the lease or rental agreement, you will need to contact the owner and arrange for transfer at settlement. The buyer will need to review the equipment lease or hire agreement and a deed of novation may be required.
You must consider all of these things early on in the piece and be open and honest as it may also affect the value of your business.
Is Your Lease Ready To Be Transferred?
To sell your business you will need to provide the buyer with a current, valid registered lease. Along with a copy of the registered lease you will need copies of current invoice for rent and outgoings such as utilities.
If your premises are retail premises you will also need to provide various disclosure statements.
You need to review your lease and determine the transfer or assignment of lease requirements and the length of the term left to run (including any available further terms). If the lease term is too short this should be addressed.
You may also need to consider whether your landlord will be willing to consent to a transfer the existing lease to the buyer. If they are not you will need consent from them to prepare a new lease. If this is required, a commercial lawyer will be able to assist you in the preparation of a new lease.
If on the other hand your landlord is willing to transfer the lease, a deed of consent to assign will be required. This will allow for a smooth transition of the lease from your name to the buyers.
Another item you will need to discuss with your landlord is the transfer and release from all obligations under the lease and any personal guarantees you have provided.
Overall, this checklist provides a broad overview of some of the main things you need to consider from a Legal Due Diligence perspective before putting your business on the market. We recommend discussing this with your broker and consulting a solicitor as this list is not extensive and requires experience in business sales.
There are other things that can be reviewed in a more in depth Seller’s Legal Due Diligence, depending on the nature of the business, for example:
- the current employment contracts;
- arrangements in place with suppliers;
- client agreements; and
- licences and permits required to operate the business.
As well as looking as the legal aspects you will also need to engage with your accountant to review the financial aspects of the business.
Please contact our Commercial Legal Team if you would like assistance with buying or selling a business or with any other commercial legal issue.
You may also be interested to read our article on Tips to Avoid the Main Issues that Can Derail a Business Sale.
Primary producers who have battled drought and flood along with continually challenging economic conditions have been dealt yet another blow with a Federal Court ruling against a pastoral holder who applied to upgrade her tenure to freehold.
Creevey Russell Lawyers Principal Dan Creevey said the refusal by Justice John Reeves in the Federal Court to grant an order by Sophie Pate that native title did not exist over her cattle property near Carmila in North Queensland was “another nail in the coffin for primary producers” and should be appealed.
“Just when you thought it can’t get any harder for primary producers, the Federal Court has cast a shadow over the ability to obtain a determination that native title does not exist over country, and therefore the ability to freehold that property,” he said.
Mr Creevey said Ms Pate sought to upgrade her tenure to freehold and commenced a non-claimant application seeking an order native title did not exist over her property.
“The application was not contested and there wasn’t a native title claim filed in response, with the applicant arguing the court could infer no native title existed on her land,” Mr Creevey said.
“But Justice Reeves ruled even though the application was unopposed, the applicant must prove on the balance of probabilities that native title did not exist. He found to make an order that native title did not exist would be contrary to the objectives of the Native Title Act 1993.”
Mr Creevey said the Reeves judgment has foreshadowed a view on the Native Title Act which may result in a failure of the application no matter how strong the evidence that native title does not exist.
“The Court arrived at a conclusion in the Pate case that a negative determination of native title would prevent any future application for compensation against the State for loss of native title rights and would be contrary to the objects and purposes of the Native Title Act,” he said.
“The concern arising from this is that someone, somewhere may have an unexercised native title claim but that granting an application for a determination that native title does not exist will forever prevent that right being exercised.
“This is despite a section in the Native Title Act which provides expressly for the reservation of compensation claims against the state when non claimant application provisions are utilised.
“At the moment the Court has only expressed a qualified view on the state of the law but if that view is confirmed, freeholding of any country where native title has not been extinguished will not be on option.
“The opportunity to persuade the Court of a contrary view should not be missed but will require the joining of forces to promote a favourable outcome.”
Further Enquirers, please contact our Litigation Team:
Ph: +61 7 4617 8777
Once you have made the decision to sell your business and found a buyer willing to pay the asking price it can be a huge relief. But there is a long road to travel between receiving the offer to purchase (which is usually made by way of a non-binding expression of interest through your broker), to the actual settlement of the business sale.
A business sale agreement still needs to be negotiated, agreed and signed by the parties to make the offer binding and then all the conditions in the contract need to be satisfied (or waived).
One of the main conditions will be the buyer obtaining suitable finance. This is outside the control of the seller and rests entirely on the buyer’s ability to finance the business purchase. There are however other conditions and issues that could arise within a business sale transaction which could lead to the buyer pulling out of the purchase either by not signing the binding business sale agreement or by rescinding or terminating the agreement.
A prudent seller should consider these issues, seek advice and take steps to avoid these issues derailing their business sale before going to market. Here are some top tips on what to watch out for and how to avoid these being an issue for your business sale:
Issue #1: buyer gets cold feet
People don’t like surprises, especially if you have a nervous buyer who does not understand all the nuances of buying (or running) a business.
There are obvious things that could lead a buyer to think that there is something wrong with your business, for example:
- Finances not being readily available (‘What are they trying to hide?’). Make sure you have your last 3 years’ accounts, BAS statements and POS records ready to provide to a buyer who has signed a confidentiality agreement
- The business name not being registered to the seller – if they are paying an amount for goodwill the seller will expect the Intellectual Property in the business to be robust.
- Long lists of charges registered against the business on the Personal Properties Securities Register (PPSR) – this may indicate to a buyer that the business runs on credit or was struggling. (‘Who else do they owe money to?’).
Tips to avoid the issue: sort out any potential issues.
We regularly come across issues in a business sale that should have been addressed by the seller before the business went on the market (more commonly when the business is being sold privately without a broker). If you sell your business through a broker they will analyse the business beforehand and identify any matters that are likely to negatively impact upon the sale price or cause problems down the line. Engaging a commercial lawyer to conduct a Seller’s Due Diligence early on in the piece can also be useful in flushing out and addressing these issues, they can help you to:
- Ensure that the business name is registered to the seller (for example where an old business partner has it in their personal name or it is simply not registered). The same goes for a trademark.
- Discharge any old PPSR charges (for example from previous supply arrangements) so you don’t need to provide the buyer with covenants or delay settlement.
- Ensure that all key contracts are documented – handshake arrangements have no value to a buyer so it is important to get all key customer and supply agreements in writing.
- Ensure that you have everything you need to complete the business sale agreement, for example all schedules, as it is preferable to send across a complete first draft contract to the buyer.
- Address any issues with your lease.
Issue #2: landlord won’t accept the new tenant
If you lease your business premises, the business sale agreement will need to be conditional upon the assignment of lease to the buyer. But what if the landlord won’t accept the new tenant? In that case, the conditions regarding landlord’s consent to assign the lease will not be satisfied and the contract will fall over.
Tips to avoid the issue: Understand the lease and communicate with your landlord
- Speak to your landlord – If the sale is not highly confidential, have conversations with the landlord early on in the piece so that you are both on the same page.
- Vet your buyer – Determine what the landlord’s priorities are and make sure that the buyer ticks their boxes (the higher offer might not be the better offer if the landlord won’t accept the buyer).
- Review the lease: – Make sure that you are aware of all the assignment conditions in the lease and that these are notified to the buyer. For example, that they need to provide personal guarantees, a bond or a bank guarantee and how much that will be for (they will need to factor this into their financial analysis when determining whether they can buy your business or not).
Issue #3: The lease is too onerous
The buyer may decide after reviewing the lease that it is not ‘satisfactory’ and not to go ahead with the assignment.
This is likely to occur where the lease is onerous or if the lease term is too short and the landlord is unwilling to amend it to provide for further options to renew or grant the buyer a new lease for a longer term. This is likely to occur where:
- The landlord does not want the buyer to become its tenant; or
- Where the landlord has plans to redevelop the premises and there is no redevelopment clause in the lease.
Tips to avoid the issue: Make sure you understand your lease
- Review your lease before listing your business for sale – conduct a seller’s due diligence and make a plan to address any issues.
- Where you have a lease with only a short term left to run and no further options it is worth addressing this before you go to market.
- Consider negotiating further option terms which are likely to be more attractive to a buyer and their financiers. (Don’t extend the initial term of the lease though because, if the sale does not go through you will end up being liable to pay rent for a longer term).
- This may also be a good time to renegotiate other onerous terms in the lease. So, send to a commercial lawyer to report on what needs changing to make the lease more ‘commercial’ in the current climate.
Issue #4: buyer wants to renegotiate price
We have all come across buyers who have little regard even for a signed contract and use any opportunity to renegotiate the purchase price just before settlement.
The sad thing is that this often occurs where the buyer has or perceives that they have the bargaining power, for example where the sale has to go ahead quickly and they know that the seller will not:
- be able to afford to fight them in court; or
- want to waste any more time putting the business back on the market and trying to find a new buyer.
Tips to avoid the issue: Make sure that the contract stacks up:
- Take a large enough deposit from the buyer to discourage a breach of contract.
- Make sure that all conditions are drafted tightly enough to ensure that the buyer has little ‘wriggle room’ for example, if there is a due diligence clause make sure that it is tight enough to point to exactly want constitutes unsatisfactory due diligence. Do not leave it to the buyer to say that they are simply ‘not satisfied’.
- When you need to rely on a clause in the contract you want to be sure that there is no ambiguity and that the interpretation finds in favour of the seller. The standard REIQ contract is not adequate to protect a seller, it needs well drafted ‘buyer’s’ special conditions.
- Even before the contract is signed, having all the terms documented in a well drafted set of heads of agreement or terms sheet will help avoid this. Both parties will be on the same page and understand what the process of the business sale will be.
It is important to work with experienced business sale professionals when you sell your business to maximise the chances of success. We regularly assist with business sales and would be happy to assist you through the process.
If you require any assistance with your business sale or business purchase or need help with other commercial legal issues, please contact our commercial legal team:
Ph: +61 7 3009 6555
February 21, 2019 in Commercial Law
New legislation before the Queensland Parliament designed to improve the disciplinary system for the state’s police will provide more confidence for the public and certainty for police officers, says leading legal firm Creevey Russell Lawyers.
Creevey Russell Principal Dan Creevey said The Police Service Administration (Discipline Reform) and Other Legislation Amendment Bill 2019 will, if passed, have a significant impact on how internal police disciplinary matters are handled.
The police complaints system in Queensland has remained largely unchanged since 1990. If passed by the Parliament, the new legislation will streamline police disciplinary investigations, delivering faster and more consistent outcomes, while also enhancing oversight by the Crime and Corruption Commission.
Mr Creevey said the proposed changes, which include limitation periods on when disciplinary proceedings must be commenced, are a welcome addition.
“Our firm does a significant amount of disciplinary work,” he said.
“In the event this Bill becomes law, members of the police force who are faced with disciplinary action will be given a degree of certainty as to when matters will at least be commenced, rather than have the threat of action hanging over their head for an indefinite period of time.
“The changes will help ensure the public has confidence in knowing police officers who are found to be behaving poorly are disciplined accordingly, but also give the public confidence in knowing police officers who are found to have done nothing wrong are back protecting the community without extensive delay.”
The Bill proposes to repeal the Police Service (Discipline) Regulations 1990, as well as amend other important legislation pertaining to the Queensland Police Service, including the Crime and Corruption Act 2001, and the Police Service Administration Act 1990.
Mr Creevey said it was good to see the law adapting to meet societal changes.
“Society is constantly changing, and it is important that the law is also being amended and updated to reflect society’s views and expectations, while also helping to ensure those suspected of any wrongdoing are afforded fair processes and a right to reply in a timely manner,” he said. “The bill helps to achieve this.”
Dan Creevey (07) 4617 8777
February 18, 2019 in Commercial Law
Leading Queensland legal firm Creevey Russell Lawyers is enjoying unprecedented growth across all of its practice areas as it celebrates its 10th anniversary.
Creevey Russell Co-Founder and Principal Dan Creevey said it was an exciting milestone for the South East Queensland based full service law firm, which now has 28 staff across three offices.
“There has been plenty achieved over the past 10 years and the firm’s accomplishments over that time are a great credit to the hard working staff at our offices in the Brisbane CBD, Toowoomba and Roma,” Mr Creevey said.
“We will enjoy these celebrations but it’s also a time to reflect and thank our clients for their support over the last decade. We are fully committed to continuing to provide great service to regional Queensland.”
Mr Creevey said the firm had built a strong team and was looking to support further growth with the addition of three more experienced commercial/property and family law lawyers.
“Last year was one of our busiest with two class actions in progress, which involved much travel thoughout regional Queensland and NSW, while we refined our practice areas to family, commercial / property, crime and litigation, estates and elder law,” he said.
“We recently engaged an experienced practice manager to allow us to focus on our clients, while highly experienced senior commercial and property lawyer Helen Kay has joined the firm as a Special Counsel.”
Mr Creevey said the 10th anniversary was also significant for the firm’s senior legal team including Co-Principal Clare Creevey and Partners Damian Bell and Tom Rynders.
“Clare has been a massive contributor to the firm and we were thrilled when she was recognised by Doyles Guide as one of Queensland’s leading legal practitioners in the field of medical negligence and malpractice,” he said.
“Damian joined the commercial arm of Creevey Russell Lawyers four years ago and his extensive experience both in legal and commercial business in Australia and overseas has been invaluable, particularly when we engage with banks for our clients in financial difficulty.
“Tom has spent most of his legal career at Creevey Russell Lawyers and it has been delightful to watch his progression to being a Partner.”
Mr Creevey said other highlights for the firm over the past 10 years were its Native Title work and also the launch of a specialist criminal law division as part of its wide range of services to clients.
January 18, 2019 in Commercial Law
Preparing your own will without professional help can end up resembling a dodgy do it yourself building project – resulting in substantial extra costs instead of saving money, says leading legal firm Creevey Russell Lawyers.
Creevey Russell wills and estates lawyer Rachel Greenslade said while courts in the age of technology and society’s desire to DIY have been more flexible regarding what they will accept as will documents, improperly made wills can cost tens of thousands of dollars to have proven as the last will of the deceased.
“Writing your own will might seem like a good idea, especially since the ability to do so is right at your fingertips, however, if your will is not drafted in a way that that deals with your whole estate or is not executed correctly, it is likely that your estate will wear significant costs ,” Ms Greenslade said.
“Would you fix your own car, build your own house or perform your own surgery? While doing things yourself often saves time and money, the result may not be as expected and may end up costing more in the long term.”
Ms Greenslade said courts nowadays can validate wills posted on electronic documents such as DVD recordings, iPhone notes, text messages and word documents, provided the document embodies the testamentary intentions of the deceased.
But she said if the will is deemed invalid the costs involved in seeking to have it upheld can be substantial.
“It is likely that the family of the deceased person will be forced to endure the stress that goes along with making such an application and it is possible that not all of the deceased person’s estate will have been dealt with correctly, leaving further issues to be resolved; possibly not the result that the DIY will maker was hoping for,” Ms Greenslade said.
“The cost of doing away with DIY and leaving it to the professionals is insignificant in comparison to the cost of fixing the issues that the DIY will may cause.”
(07) 4617 8777
About Creevey Russell Lawyers
Creevey Russell Lawyers is a full service law firm which operates primarily from our Brisbane practice, with the capacity to provide superior legal services to western Queensland through our Toowoomba practice. Creevey Russell Lawyers deliver results to a variety of clients including developers, corporations, accountants, liquidators and private clientele
January 17, 2019 in Commercial Law
The next round of changes to the Retirement Villages Act 1999 (Qld) will take effect on 1 February 2019 and will impact every Queensland retirement village.
Changes have already been enacted including:
- requiring retirement village operators to pay a former resident’s exit entitlement no later than 18 months after the termination date; and
- introducing new behavioural standards for village operators and residents requiring a scheme operator to provide a complete response to relevant correspondence within 21 days.
The further amendments will commence on 1 February 2019, including:
Residence contract and disclosure documentation:
Operators will be required to provide residents with:
- the new Village Comparison Document and Prospective Costs Document which will replace the Public Information Document (PID);
- the relevant documents at least 21 days before entering into a residence contract, or obtain a waiver notice signed by the prospective resident and a Queensland lawyer;
- an Entry Condition Report and Exit Condition Report in the approved form; and
a residence contract which contains the required additional information.
Scheme operators must maintain a website for their village(s).
Reinstatement and renovation work
A new definition of “reinstatement work” for new residence contracts requiring former residents to reinstate their unit to the same condition as it was in upon entry, excluding fair wear and tear, agreed renovations and other changes. If this is not done, the scheme operator can carry out the reinstatement work and claim the cost from the former resident.
A new concept of “renovation work” (for which the operator is responsible) will be introduced for new residence contracts. The parties must bear the cost of renovation work in the same proportion they share any capital gain on resale of the right to reside, and agree on the timeframe for the renovation work before work is commenced. The operator must then ensure that the renovation work is completed by the agreed date.
WHAT OPERATORS NEED TO DO
Operators have until 1 February 2019 to comply with the new legislation.
The documents and forms that you will need, include a:
- village comparison document;
- prospective costs document;
- pre-contractual disclosure waiver;
- entry condition report;
- exit condition report; and
- registration application form.
You must prepare a customised village comparison document and prospective costs document to replace your current public information document by 1 February 2019.
We can assist you in relation to your documents. If you wish to discuss this article or require our assistance, please contact our property .
January 16, 2019 in Commercial Law
30 January 2019 will mark the 7-year anniversary of the Personal Property Securities Register (PPSR).
The PPSR is described as the single, Australian register where details of security interests in personal property (i.e. property that is not land or fixtures to land (i.e. real estate and buildings)) can be registered and searched.
According to Infotrack, over 120,000 seven-year security interests that were registered when the PPSR was first established in 2012 are set to expire within the next few weeks.
How can I protect my business?
The PPSR protects businesses that sell on terms, such as retention of title or consignment, as well as those who hire, rent or lease out valuable goods, machinery, vehicles and equipment. Businesses should register their interest in goods they have yet to receive payment for, thereby reducing the risk of becoming unsecured and losing priority in the goods if the customer does not pay or becomes insolvent.
Why do I need to renew?
With this deadline looming, it is now more important than ever to check on your existing registrations and make sure they’re extended so that you don’t lose protection over your interests. Once your registration expires it can’t be extended or renewed and your ownership in the goods may no longer be legally recognised. It is therefore crucial that you correctly extend your registrations before they naturally expire to protect your interest. If you re-register after expiry you may rank behind, and therefore lose priority to, another secured party already on the register.
What can you do to check what registrations expire soon?
You should check the status of all your PPSR registrations and extend or renew them as needed. Note that some registrations were automatically transferred from other registers to the PPSR, so even if you don’t think the upcoming deadline applies to you, we are recommending our clients double check.
We can assist by:
- Reviewing your registrations and determining which ones (if any) are due for renewal;
- Checking the details of any seven year registrations and making any necessary updates;
- Extending your registrations to continue to secure your interest;
- Registering new or expired security interests; and
- Reviewing your terms and conditions of trade and other documents to determine whether security interests arise and whether they need to be registered.
If you require any assistance with reviewing and renewing your existing security registrations or have questions regarding PPSR registrations, please contact our commercial team:
Partner & Practice Group Leader
Ph: +61 7 3009 6555
Ph: +61 7 3009 6555