Author: Shalini Sree

Health Industry Business Advice

Posted onAuthorShalini Sree

Our commercial team is experienced and equipped with industry knowledge and know-hows having worked closely with various private sector businesses in the healthcare industry.

We assist healthcare providers including among others, medical specialists, dentists, pharmacists, physiotherapists, with:

  • Purchase of business
  • Sale of business or business interest in a practice
  • Pharmacy location rules
  • Leasing and property law
  • Business structures
  • Partnerships
  • Funding arrangements
  • Franchising
  • Regulatory issues

We are committed to finding commercial and practical solutions for our healthcare clients so that our clients may focus on what they do best.

If you would like to discuss your healthcare business query, you can speak to Shalini Sree who specialises in provision of business advice specific to the health and medical industry.

e: ssree@elringtons.com.au  | p: +61 2 6206 1300

Development Management Agreements: a win-win for everybody

Posted onAuthorShalini Sree

Do you currently have a substantial portion of your family’s wealth tied up in real property assets that are not generating the income that you had once hoped?

Are you looking to boost your superannuation or cash flow position leading into retirement?

It is becoming increasingly common for owners of substantial rural or semi-rural land parcels, particularly on the fringes of high priced capital cities, to be entering into development arrangements with experienced and well-resourced developers in order to subdivide and on sell rural land parcels in a cost effective and timely manner that would not have been possible if the landowner were to undertake the project themselves.

This type of arrangement is becoming particularly popular in metropolitan centres where “urban sprawl” is rife, and young first homebuyers are being forced to the more affordable outer suburbs of cities in order to secure their first homes.

The benefits of a Development Management Agreement (DMA) mean that landowners who have little to no property development experience, and also have minimal working capital available to cover the upfront costs of undertaking such a development, can outsource these responsibilities to a party who has both the financial resources to undertake the initial stages of the development, and also has the experience of working closely with local councils, planners, surveyors and marketing agents in order to speedily develop the land and bring it to market

The results? The landowner is able to develop their previously stagnating asset without investing significant upfront costs and time into the project, while the developer is able to use their financial resources, skill set and professional network to develop a parcel of land which they are not fortunate enough to own themselves. The outcomes therefore of a well drafted DMA mean that both parties are able to pool their resources together in order to bring about a mutually beneficial arrangement for both parties to the agreement.

If it sounds like this type of commercial arrangement would suit your circumstances, please contact our office to make an appointment with one of our experienced property and commercial lawyers to discuss your options. Our lawyers have extensive experience working alongside both landowners and developers in achieving cost effective and timely results for both parties to a Development Management Agreement.

Contact Jacob Powell

p: +61 2 6206 1300 | e: jpowell@elringtons.com.au

 

Selling a House in NSW

Posted onAuthorShalini Sree

Contract Preparation

When you instruct us to act for you on the sale of your property, we will open a file and write to you to confirm that we are acting on your behalf.

Applying for searches

We will request the sum of $550.00 from you to be deposited in our trust account.  We will use these funds to obtain the property searches and enquiries which are mandatory inclusions in a NSW Contract for Sale. These include  title search plus the deposited plan and any other relevant title documents, Section 149 Certificate, Sewerage Diagram, Land Tax Certificate.

When the funds have cleared through our trust account, we will apply for the requisite property searches.
Depending on the particular local council involved, it can take between 5-10 working days for us to receive the property searches, specifically the Council documents

We cannot predict the exact cost of these searches and enquiries as the cost is dependent on the number of documents that we need to obtain.  If there is a balance remaining from the $550.00 it will be used as a credit towards part of our professional fees.

Survey, Building Certificate etc

We ask that you provide us with copies of any building certificates, survey documents etc you may have in your possession.  If you do not have these documents, copies can be obtained by any prospective Purchaser (at their expense) from the local council.

Tenanted Property

If your property is sold subject to an existing tenancy agreement, we will require a copy of the Tenancy Agreement as it must be attached to the Contract for Sale.

Marketing Contract

When we receive the searches and any other documents required for the Contract, we will prepare a Marketing Contract which will be sent to your Agent.  We will also send you a copy for your records.  At that time, the Agent will be in a position to advertise the property for sale.  It is illegal to market a property for sale without a Marketing Contract.

Building and Pest Inspections

These are not mandatory inclusions in NSW Contracts for Sale.  If a prospective Purchaser wishes to do so, they can arrange these at their own expense.

Sales Instructions

When “offer and acceptance” has been achieved between you and a Purchaser, the Agent will fax to us Sales Instructions.  Sales Instructions contain details of the Purchaser, the Purchaser’s lawyer, the sale price, property inclusions (such as carpets, curtains, light fittings), settlement time frame etc.  When we receive the Sales Instructions, we will prepare a formal Contract for Sale.  The Contract is prepared in duplicate; we retain one copy for your signature and the duplicate Contract is sent to the Purchaser’s lawyer for the Purchaser’s signature.

Appointment

We will contact you to arrange an appointment to:
Review and sign the Contract for Sale
Sign the Transfer.  This document is required on settlement and is lodged after settlement with the NSW Land Titles Office (formerly the Registrar General’s Office).  It notes the change of ownership on the title deeds.
Complete and sign a Discharge of Mortgage Authority (if applicable)
Hand the title deed to us (if there is no mortgage).
Once the Contract is signed, we will contact the Purchaser’s solicitors and let them know we are ready to “exchange”.

Exchange

Exchange of Contracts takes place when you and the Purchaser are satisfied with the terms of the Contract, when you have both signed your respective copies of the Contract and when the Purchaser’s finance has been approved in writing.
The Purchaser then pays the agreed deposit (usually a cheque payable to the Real Estate Agent’s Trust Account).  The deposit cheque is usually handed to us on exchange and we forward it to the Agent following exchange.  It is then held in the Agent’s Trust Account until settlement has occurred.  If there is no Agent, the deposit will be held in our Trust Account.
During the exchange process, both Contracts (one signed by the Purchaser, the other signed by you) are checked to ensure that their contents are identical.  The documents are then dated and physically exchanged (swapped) – we receive the Contract signed by the Purchaser and the Purchaser’s lawyer receives the Contract signed by you.  Once Contracts are exchanged, the Vendor and Purchaser are both locked into the transaction.  On exchange, the Purchaser’s lawyer will provide us with a Section 66W Certificate waiving the Purchaser’s right to any ‘cooling off’ period.
We will phone you following exchange to advise that exchange has occurred, and we will then confirm exchange in writing.  We will also write to your  Discharging Mortgagee (if applicable) to notify them of the date for settlement and request preparation of discharge documents and a payout figure in readiness for settlement.

Insurance

PLEASE NOTE:  In NSW the insurance risk remains with the Vendor until completion.  Therefore, you must keep all insurances in place until settlement has been confirmed.

Leading up to settlement

  • As the settlement date draws near, the Purchaser’s lawyer will provide us with copies of up-to-date rates notices. (If you receive rates notices following exchange, please notify us and provide us with a copy.  We suggest that you do not make any instalments on your rates accounts after exchange without contacting us first.)
  • You should advise  us if you make any changes to your financial arrangements, such as using the sale property as security for borrowings over another property, or if you refinance your loan.
  • We will prepare and provide you with a detailed Settlement Statement setting out adjustments for rates, deposit paid, payout figures, legal fees etc.
  • If the property is sold subject to existing tenancy, adjustments for rent are usually attended to by the Managing Agent.

Discharge of Mortgage

We will contact your Discharging Mortgagee to ‘book in’ settlement.  A day or two prior to settlement, the Mortgagee will provide us with a payout figure sufficient to discharge the mortgage.  Once we receive that figure, we can finalise details and payees of the settlement cheques in accordance with your instructions.  You may decide to instruct your Mortgagee to receive all sale proceeds on settlement, and have the Mortgagee deposit the balance owing to you into your nominated account.  Such deposits usually occur overnight.

Pre-settlement inspection

Prior to the settlement date, the Purchaser has the right to carry out a pre-settlement inspection of the property with the Agent.  This inspection is usually done on the morning of settlement.  When you vacate your property, it should be left in a clean and tidy state and in the same state as at the time of the exchange.  There is a possibility that settlement will be delayed by the Purchaser if the pre-settlement inspection is unsatisfactory (or funds may be withheld from the deposit pending resolution).

Settlement

Settlements usually take place in Canberra between 2:30 pm – 4:00 pm Monday to Thursday and 1:00 pm – 4:00 pm on Friday.

Keys

Before settlement, we ask that you provide us or the agent with the keys to hand to the Purchaser’s lawyer on settlement.  Keys should be delivered to our office before 12 noon on the day of settlement.

Your sale proceeds
  • We will phone you when the settlement has taken place.
    If you would like us to bank your sale proceeds following settlement, please provide written instructions, including the name of your Bank, the BSB and account numbers, account name and account  type.  While every effort is made by us to bank settlement cheques on the same day as the settlement, please understand that we cannot guarantee this will happen.  In some circumstances, we may not be able to deposit sale proceeds until the next working day following settlement.
  • You may elect to collect your cheque/s from our office on the afternoon of settlement.
  • Release of Deposit:  On settlement, we will receive a letter from the Purchaser’s lawyer addressed to the Agent confirming that settlement has occurred and authorising the Agent to release the deposit held in its trust account to you.  This letter is called an ‘Order on the Agent’.  It is standard procedure for us to fax or email the Order on the Agent when we return to our office after settlement.  The Agent will deduct the agreed commission from the deposit held and pay the balance of deposit to you, usually by sending you a cheque.  If you wish to collect the cheque from the Agent, please make your own arrangements with the Agent for collection.  If you wish the Agent to place the balance of the deposit into your nominated bank account, you must provide that information directly to the Agent, preferably in writing.

If the deposit is held in our trust account, the letter of authority to release the deposit will be addressed to us.  We cannot release the deposit without the Purchaser’s Lawyers’ written authority, which will be received by us on settlement.  We will obtain your instructions prior to settlement in relation to how you wish the deposit to be paid to you (eg. Collect a cheque from our office, direct deposit into your nominated bank account etc).

Electricity, gas and telephone connections

The cancellation of these services is your responsibility.

Rates and Water

The local council will be notified of the change in ownership of the property by the NSW Land Titles Office following registration of the Transfer into the Purchaser’s name.  Once this occurs, rates notices will issue directly to the new owner.

Important Note:  Sales or value over $2,000,000.00

Australian residents who are selling a taxable Australian property with a market value of $2,000,000.00 or more need to obtain a clearance certificate from the ATO to confirm that a 10% withholding amount does not need to be withheld.  The vendor needs to provide a clearance certificate to the purchaser at settlement or the purchaser will be required to withhold 10% of the price and pass it to the ATO.

After settlement

Following settlement, we will write to you to confirm that the sale has been finalised and we will provide you with a detailed Settlement Statement, our Tax invoice, the original Contract and any other relevant documentation.

Please contact one of our experienced property lawyers or conveyancers to make an appointment on +61 2 6206 1300, or by email on info@elringtons.com.au

Health Check for Business Owners

Posted onAuthorShalini Sree

All good businesses should review and renew regularly, to ensure that they are operating efficiently, cutting costs and maximising potential.

The following checklist is not exhaustive but is a good start for a healthy new year audit of your business:

  • Is your business structure the most appropriate for your needs – do you have the most effective asset protection structure in place? Are you maximising tax benefits? Should you have a trust ownership structure? If you have a family trust, are you up to date about whether this offers you adequate asset protection? If you are incorporated, are you fully aware of your obligations and potential exposure as a director ?
  • What if something happens to you – do you have Powers of Attorney so that the appropriate people will make management decisions in your absence? Does your business plan offer certainty should an untimely event occur, and does it allow the appropriate people to manage the business if you are temporarily incapacitated, with minimal interference to your operation and cash flow? Do you have a Will? Who will take control, and benefit in the growth of your business, after your death? Do you know what assets and liabilities will form part of your estate (and therefore be dealt with in your Will)? Are you aware that superannuation does not automatically form part of your estate and may instead be distributed at the discretion of your fund’s trustee? This may mean that money which you planned to be available for business debts (or protected from business debts) will not be so.
  • Should you have a Self Managed Super Fund – the advantages are that you will have greater control over your investments and a wider choice of assets in which to invest, however you need to ensure that the administrative costs are not going to outweigh the benefits. If you have one, you need to be vigilant about complying with legislative requirements (such as the sole purpose test of saving for your retirement) or you will attract penalties.
  • Do you own or lease? Is your lease value for money, is it energy efficient? Is the landlord conducting appropriate renovations and repairs? Are you complying with your lease obligations? Have you allowed your business premises lease to lapse, putting you into a “holding over” arrangement? If so, you are at risk of eviction. If you own your premises, is ownership the most effective structure for you?
  • Are you owed lots of money? – and should you be taking steps to recover outstanding debts? Have you got efficient systems in place to chase your debtors? Have you got strategies to ensure that you are most likely to be paid. For example, you can have your customers sign payment agreements once a quote has been accepted which could include provision for up front payment, or payment of a deposit. Service contracts also provide certainty about the service that you will be providing, what is included in the price and what will attract additional costs. Pursuing outstanding debts through the Court system can be managed effectively and efficiently on your behalf when customers refuse to pay, but having the correct systems up front in order to secure payment in the first place is even more efficient.
  • What shape are your borrowings in? – do you have the best deal for your finance arrangements, the best rates and the best flexibility? Can you consolidate your borrowings? Is your bank aware of exactly what your business does, allowing it to tailor its services to your needs.
  • Conduct a review of your employment contracts, your consultant contracts and your supplier contracts – these may be outdated, and employment contracts in particular may not comply with current legislation. If you don’t have employment contracts in place this should be remedied. Or you may be inadvertently breaching the ones that you have. Your suppliers should be complying with their obligations to you which may include extra services on the side or discounts for certain levels of purchasing.

These are some key areas you should assess as part of your new year audit, and seek appropriate and skilled advice.

For more information on Property Law or Business Services contact elringtons:

p: 02 6206 1300 | e: info@elringtons.com.au

Wind Turbines – Legal Advice for Landowners

Posted onAuthorShalini Sree

Wind farms have the ability to produce clean energy, generate jobs and income and have minimal environmental impacts when appropriately located. They can also generate income for the owners of the land upon which they are constructed.

In 2016 Australia had 79 wind farms with approximately 2106 turbines in operation, with a combined capacity of 4327 MW.  These wind farms produced 30.8 per cent of the country’s clean energy and supplied 5.3 per cent of Australia’s overall electricity during the year[1]. Wind farms have also delivered considerable benefits to regional communities.

It can be expected then that wind energy companies are looking for suitable land to construct wind farms.

What should you consider before installing Wind Turbines on your land?

The following scenario provides an example of dealings between a land owner (Terry Firma) and a wind energy company (Breezey Pty Ltd) when negotiating the construction of a wind farm:

Breezey Pty Ltd contacts Terry to discuss testing his property for wind with the view to construct wind turbines on his property.  Breezey Pty Ltd outlines the process that will be followed:

  1. Breezey Pty Ltd provides an Agreement to Lease to Terry;
  2. The Agreement to Lease provides that Breezey Pty Ltd will test Terry’s property and if they are satisfied with the results, they will construct a wind farm and enter into a Lease with Terry as Lessor;
  3. The testing is carried out, the results reviewed and the decision of whether to enter into a Lease or not is made by Breezey Pty Ltd; and
  4. Once the Lease is operative, Terry will receive an annual fee for each Turbine on his property.

Although assured by Breezey that the contracts Terry is being asked to sign are standard contracts for wind projects and the terms of the contract are fixed and the same for everyone, Terry needs to make sure he fully understands the terms which are being offered by Breezey Pty Ltd. Terry takes the Agreement to Lease to his solicitor to review and advise him what the terms set out in it mean.

The solicitor advises Terry that the terms provide:

  1. The tests for the lands suitability will be undertaken within two years from the date of the Agreement to Lease;
  2. Breezey Pty Ltd may extend the period for conducting tests by giving notice to Terry 14 days prior to the end of the two year period;
  3. Once the tests are complete, Breezey Pty Ltd will advise Terry if they wish to proceed with the necessary works to obtain the necessary approvals and authorisations to construct the wind farm;
  4. Breezey Pty Ltd will endeavour to obtain the necessary approvals and authorisations within two years from the date they advise Terry they will proceed with obtaining them;
  5. Breezey Pty Ltd can extend the period for obtaining the necessary approvals and authorisations by advising Terry in writing 14 days prior to the two year period ending;
  6. Breezey Pty Ltd will commence construction of the wind farm within 6 months of receiving the necessary approvals and authorisations; and
  7. The period for commencing construction can be extended by Breezey Pty Ltd by giving notice to Terry within 14 days of the 6 month period ending.

So what does this mean for Terry? This means that under the terms provided by Breezey Pty Ltd, the Lease may not be entered into for up to four years, which can be extended even further at the discretion of Breezey Pty Ltd. No fees may be received by Terry until the Lease is commenced and Breezey Pty Ltd is in possession of part of Terry’s land and the wind farm is constructed.

Terry instructs his solcitor that the terms currently provided by Breezey Pty Ltd are not acceptable and alternate terms are drafted by the solicitor and forwarded to Breezey Pty Ltd for its consideration. The solicitor notes that an Option for Lease provides a superior framework for the rights and obligations of the parties. An option to lease agreement will normally allow a developer to access the property to assess the wind farm feasibility with an option to move into a lease agreement at a later stage.

There are many other other things to consider before entering into an Lease agreement for a Wind Farm with an energy development company for example:

  • Duration of the Contract
  • Renewable period
  • Tower removal responsibilities and specifications
  • Placement of access roads
  • Responsibility for roads, fences and gates
  • Renumeration and payment structures
  • Restrictions on the sale and/or future
    development of land
  • Energy credits
  • and more

Entering into an agreement with a wind energy company for the construction of a wind farm can be highly advantageous, which is why it is imperative that the terms of the agreement be carefully drafted. Once signed, all parties involved have given written approval of the provisions of that contract and are legally bound to fulfill the terms of the contract.

Therefore, if you don’t like something about a contract, negotiate a change before signing. The difficult part is knowing to what degree the various components of the contract can be changed that is why it is extremely important to seek competent legal advice before signing.

For more information or to make an appointment please contact Shalini Sree:

p: 6206 1300| e:  ssree@erlingtons.com.au

[1] Wind Energy – https://www.cleanenergycouncil.org.au/technologies/wind-energy.html