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CONVE YANCING SE RIE S 2020 Maste r ing the e sse ntials Pr - - PowerPoint PPT Presentation

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CONVE YANCING SE RIE S 2020 Maste r ing the e sse ntials Pr e se nte d by Phil Nolan, Risk Manage r , L PL C CONVE YANCING SE RIE S 2020 Maste r ing the e sse ntials Be st pr ac tic e for pur c hase r s I ntro duc tio n

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SLIDE 1

CONVE YANCING SE RIE S 2020

Maste r ing the e sse ntials

Pr e se nte d by Phil Nolan, Risk Manage r , L PL C

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SLIDE 2

CONVE YANCING SE RIE S 2020

Maste r ing the e sse ntials Be st pr ac tic e for pur c hase r s

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SLIDE 3

I ntro duc tio n – b e st pra c tic e fo r purc ha se rs

Zoom poll

Wha t is yo ur mind se t whe n yo u a re a c ting fo r a purc ha se r?

  • T

his is just a no the r c o nve ya nc e .

  • I

a m no t g e tting pa id e no ug h to do this c o nve ya nc e .

  • Wha t risks a re the re fo r me a nd my purc ha se r c lie nt.
  • I

c a n se e thing s fro m the purc ha se r’ s pe rspe c tive .

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SLIDE 4

An a g e nt’ s ma in jo b is to ta lk pe o ple into c ha ng ing the ir minds.

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SLIDE 5

K e y ta ke a wa ys a nd intro duc tio n

  • Re c o g nise tha t purc ha se rs ne e d tho ro ug h a nd time ly le g a l a dvic e

a b o ut b uying re a l e sta te .

  • E

nsure yo u re c o mme nd tha t purc ha se rs unde rta ke a due dilig e nc e a nd de fine yo ur ro le in re la tio n to a ny due dilig e nc e .

  • K

no w yo ur limit so yo u kno w whe n to re fe r the purc ha se r to a n a ppro pria te e xpe rt.

  • Use a c he c klist to o b ta in ne c e ssa ry info rma tio n fro m the purc ha se r.
  • K

e e p g o o d file no te s.

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SLIDE 6

Wha t we will c o ve r to da y

F ir st half

  • Wa rning s
  • Cla ims da ta
  • Due dilig e nc e

10 minute le g str e tc h Se c ond half

  • Othe r c ritic a l issue s
  • Che c klists
  • F

ile no te s

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SLIDE 7

Wa rning - sc a ms

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SLIDE 8

Wa rning - b uye r a dvo c a te

51 Pa ttiso n Stre e t Mo o ne e Po nds - Do e rre nb e rg and Gauc i v Prime E state Pty L td (Civil Cla ims) [2017] VCAT 2028

Garage

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SLIDE 9

Wa rning - b uye r a dvo c a te

51 Pattiso n Stre e t Mo o ne e Po nds Do e rre nb e rg and Gauc i v Prime E state Pty L td (Civil Cla ims) [2017] VCAT 2028

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SLIDE 10

Wa rning - b uye r a dvo c a te

Zoom poll

Ha ve yo u e ve r inse rte d de ta ils o f a b uye r a dvo c a te o r purc ha se r’ s e sta te a g e nt in the pa rtic ula rs o f sa le ? Ye s No

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SLIDE 11

Wa rning – c o nflic t a nd no mina tio n

Rule 11 o f the L e g a l Pro fe ssio n Unifo rm L a w Austra lia n So lic ito rs’ Co nduc t Rule s 2015 is a b o ut a vo iding c o nflic ts a nd sta te s tha t: A so lic ito r a nd a la w pra c tic e must a vo id c o nflic ts b e twe e n the dutie s o we d to two o r mo re c urre nt c lie nts, e xc e pt whe re pe rmitte d b y this Rule .

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SLIDE 12

Wa rning – c o nflic t a nd no mina tio n

Zoom poll

Wha t do yo u do to de a l with a ny po te ntia l c o nflic t whe n a c ting fo r a purc ha se r whe re the re is a no mina tio n?

  • Che c k whe the r the y a re re la te d o r a re a sso c ia te s.
  • Che c k whe the r the ir inte re sts a re the sa me .
  • Ob ta in c o nse nt to a c t fo r b o th.
  • No t a c t fo r the no mine e .
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SLIDE 13

lplc.com.au

Cla ims da ta - c o st o f c la ims 2019-20

Property & Conveyancing, 28.17% Mortgage / Loan / Guarantee, 19.57% Wills & Estates, 14.90% Commercial, 9.84% Commercial Litigation, 7.88% Personal Injury Litigation, 6.10% Miscellaneous, 6.01% Family Law, 4.23% Small Business, 1.74% Lease, 1.56%

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SLIDE 14

lplc.com.au

Cla ims da ta - - numb e r o f c la ims 2019-20

Property & Conveyancing, 26.65% Commercial Litigation, 17.98% Commercial, 11.98% Personal Injury Litigation, 9.50% Wills & Estates, 8.88% Family Law, 8.88% Mortgage / Loan / Guarantee, 7.44% Miscellaneous, 5.99% Lease, 1.65% Small Business, 1.03%

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SLIDE 15

Due dilig e nc e - intro duc tio n

Zoom poll

Whic h o f the fo llo wing is pa rt o f yo ur usua l due dilig e nc e whe n a c ting fo r a purc ha se r?

  • 1. Go o g le se a rc h.
  • 2. Ob ta in re le va nt se a rc he s a nd c e rtific a te s.
  • 3. Go thro ug h the Co nsume r Affa irs due dilig e nc e

c he c klist with the purc ha se r.

  • 4. All o f the a b o ve .
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SLIDE 16

Due dilig e nc e – sto ry time

Case - Me ie r v Balbin [2013] VCAT 57

‘ ………T he g e ne ra l a ppe a ra nc e o f the re nde r finish wo uld ha ve b e e n a ppa re nt prio r to the sa le c o ntra c t…..’ . [37] ‘ ……..I t is re a so na b le , ………….tha t a purc ha se r o f a ho me ma ke s a llo wa nc e fo r kno wn o r pa te nt de fe c ts whe n ne g o tia ting the purc ha se pric e a nd, a s suc h, the purc ha se r c a n ha ve no “lo ss” a rising fro m a b re a c h o f the wa rra ntie s in re spe c t o f suc h de fe c ts. By “pa te nt” I me a n a de fe c t whic h o ug ht re a so na b ly ha ve b e e n

  • b se rva b le o n inspe c tio n a nd the sig nific a nc e o f whic h, in te rms
  • f a like ly ne e d fo r re c tific a tio ns, o ug ht re a so na b ly ha ve b e e n

a ppre c ia te d…..’ . [91]

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SLIDE 17

Due dilig e nc e – sto ry time

E xample s of pate nt de fe c ts

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SLIDE 18

Due dilig e nc e – Co nsume r Affa irs Vic to ria due dilig e nc e c he c klist

T ip

Co nside r o ffe ring to a ssist purc ha se rs to inve stig a te the issue s ra ise d in the c he c klist a s re le va nt to the ma tte r a t ha nd a nd c ha rg e a c c o rding ly. S.33B o f the Sale o f L and Ac t 1962 (Vic )

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SLIDE 19

Due dilig e nc e - ve ndo r limite d disc lo sure o b lig a tio ns

Purc ha se r c lie nts ne e d to unde rsta nd tha t the ve ndo r ha s

  • nly limite d se c tio n 32 disc lo sure
  • b lig a tio ns.

Dispute with ne ig hb o ur Dust fro m unse a le d c o untry ro a d

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SLIDE 20

Due dilig e nc e - ve ndo r limite d disc lo sure o b lig a tio ns - c o nta mina tio n

Case - Mc L

e nno n v Clapham and o the rs [2019] ACT SC

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SLIDE 21

Due dilig e nc e - ve ndo r disc lo sure a nd se c tio n 12(d) o f the Sale o f L and Ac t 1962

Any pe rso n who , with the inte ntio n o f induc ing a ny pe rso n to b uy a ny la nd— (d) ma ke s o r pub lishe s a ny sta te me nt pro mise o r fo re c a st whic h he kno ws to b e misle a ding o r de c e ptive o r fra udule ntly kno wing ly c o nc e a ls a ny ma te ria l fa c ts o r re c kle ssly ma ke s a ny sta te me nt o r fo re c a st whic h is misle a ding o r de c e ptive ; sha ll b e g uilty o f a n o ffe nc e a g a inst this Ac t a nd sha ll fo r e ve ry suc h o ffe nc e b e lia b le to a pe na lty o f no t mo re tha n 50 pe na lty units o r to impriso nme nt fo r a te rm o f no t mo re tha n twe lve mo nths.

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SLIDE 22

Due dilig e nc e - ve ndo r disc lo sure a nd se c tio n 12(d) o f the Sale o f L and Ac t 1962

Zoom poll

Whic h o f the fo llo wing is a ma te ria l fa c t?

  • Wa te r da ma g e fro m a b a th whic h flo o de d.
  • F

ro nt fe nc e da ma g e fro m a mo to r ve hic le c o llisio n.

  • Suic ide .
  • Drug la b o ra to ry.
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SLIDE 23

Due dilig e nc e - ve ndo r disc lo sure a nd se c tio n 12(d) o f the Sale o f L and Ac t 1962

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SLIDE 24

Due dilig e nc e – la te nt de fe c t vs. pa te nt de fe c t

L a te nt de fe c t Pa te nt de fe c t

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SLIDE 25

Due dilig e nc e – la te nt de fe c t vs. pa te nt de fe c t

Ca se - De L utis v Ho using Guarante e F und L td [2004] VCAT 2544 ‘ ………Whe re ho we ve r I b uy a t a uc tio n a pro pe rty tha t ha s a de fe c t so pa te nt tha t it must re a so na b ly b e suppo se d tha t it wo uld ha ve b e e n kno wn to the pa rtie s b idding a t the a uc tio n the n the pric e tha t I pa y must b e e xpe c te d to re pre se nt the va lue o f the ho use in its a ppa re nt sta te tha t is, with the pa te nt de fe c t; in this c a se , the b le mishe s c a use d b y the rust spo tting . Of c o urse , a s wa s po inte d o ut in Ca me ro n's c a se , this a rg ume nt ho lds o nly fo r pa te nt de fe c ts tha t must b e pre sume d to b e a lre a dy re fle c te d in the pric e pa id b y the purc ha se r……..’

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SLIDE 26

Due dilig e nc e - de fe c t in title vs. de fe c t in q ua lity

Zoom poll

  • Whic h o f the fo llo wing is a de fe c t in title ?
  • F

a ilure to disc lo se a re stric tive c o ve na nt.

  • T

e rmite s in flo o rs b e a re rs a nd wa ll fra me .

  • Go o ds inc lude d in sa le da ma g e d a fte r sa le b ut b e fo re se ttle me nt.
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SLIDE 27

Due dilig e nc e - de fe c t in q ua lity vs. de fe c t in title

De fe c t in title De fe c t in q ua lity

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SLIDE 28

CONVE YANCING SE RIE S 2020

Maste r ing the e sse ntials

10 minute s le g str e tc h

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SLIDE 29

Othe r c ritic a l issue s - GC 21- b uilding re po rt

Bac kgr

  • und

Ge ne ra l c o nditio n 21 sta te s tha t the rig ht to te rmina te o nly a rise s whe re the re po rt disc lo se s a ny ‘ ma jo r b uilding de fe c t’ in the struc ture . I t fo llo ws tha t a purc ha se r ne e ds to kno w wha t a ma jo r b uilding de fe c t is. Opa l to we r Sydne y

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SLIDE 30

Othe r c ritic a l issue s - GC 21 - b uilding re po rt

Zoom

Whic h o f the fo llo wing a re ‘ ma jo r b uilding de fe c ts’ ?

  • Dra ina g e pro b le ms a nd c o rro sio n in

suppo rt c o lumns.

  • F

a ilure to pro vide we a the r strips to c la dding jo ints.

  • L

a c k o f suppo rt unde r b o x g utte rs. Opa l to we r Sydne y

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SLIDE 31

Othe r c ritic a l issue s - GC 21 - c a se

Clarke v Mario tis [2009] VSC 279 3A Bra e side Ave nue , Ca mb e rwe ll Dra ina g e pro b le ms a nd c o rro sio n in c o lumns c la ssifie d a s ma jo r struc tura l de fe c ts.

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SLIDE 32

Othe r c ritic a l issue s - re fe rring c lie nts to o the r e xpe rts

  • Va lue r
  • L

a nd surve yo r

  • I

nsure r / b ro ke r

  • T
  • wn pla nne r
  • Building pra c titio ne r
  • Ba rriste r
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SLIDE 33

Othe r c ritic a l issue s – GC 7 – ide ntity o f la nd

7.1 An o missio n o r mista ke in the de sc riptio n o f the pro pe rty o r a ny de fic ie nc y in the a re a , de sc riptio n o r me a sure me nts o f the la nd do e s no t inva lida te the sa le . 7.2 T he purc ha se r ma y no t: (a ) ma ke a ny o b je c tio n o r c la im fo r c o mpe nsa tio n fo r a ny a lle g e d misde sc riptio n o f the pro pe rty o r a ny de fic ie nc y in its a re a o r me a sure me nts; o r (b ) re q uire the ve ndo r to a me nd title o r pa y a ny c o st o f a me nding title .

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SLIDE 34

Othe r c ritic a l issue s – GC 7 – ide ntity o f la nd

T he land

Ca se - Wo lle rt E pping De ve lo pme nts Pty L td v Batte n [2019] VSC 618 405 E pping Ro a d, Wo lle rt

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SLIDE 35

Othe r c ritic a l issue s

T he buildings

  • Any ille g a l wo rks
  • Any o wne r b uilde r wo rks
  • I

nspe c tio n re po rt

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SLIDE 36

Othe r c ritic a l issue s

Inte nde d use

  • Re stric tio ns in se c tio n 32

sta te me nt

  • Pla nning re stric tio ns
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SLIDE 37

Che c klists

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SLIDE 38

Che c klists

L PL C re g ula rly upda te s the c o nve ya nc ing c he c klists so ro utine ly c o mpa re the o ne yo u a re using to the L PL C c he c klist. One re c e nt c ha ng e is to inc lude a q ue stio n a b o ut fla mma b le c la dding . Se e q ue stio n 24.

L a c ro sse - 673 L a T ro b e Stre e t, Do c kla nds

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SLIDE 39

Che c klists

Zoom poll

Do yo u use a c he c klist to o b ta in info rma tio n fro m yo ur purc ha se r c lie nts? Ye s No

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SLIDE 40

Che c klists - 5 q ue stio ns to a sk yo urse lf

  • 1. I

s the ve ndo r e ntitle d to se ll the pro pe rty?

  • 2. Ha ve I

g ive n my a dvic e in writing to the purc ha se r?

  • 3. Ho w muc h will I

c ha rg e ?

  • 4. Will the se ttle me nt funds b e sa fe ?
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SLIDE 41

Che c klists - 5 q ue stio ns to a sk yo urse lf

5. Have I lodge d a c ave at?

T he re se e ms to b e a numb e r o f a ppro a c he s to lo dg ing a c a ve a t.

Zoom poll

Wha t is yo ur pre fe rre d a ppro a c h to lo dg ing a c a ve a t?

  • Give the c lie nt the c ho ic e a nd wa rn the m o f the risk o f no t

lo dg ing a c a ve a t;

  • Alwa ys lo dg e a c a ve a t o n the b a sis tha t the c lie nt is to ld this is

e sse ntia l le g a l wo rk in a c o nve ya nc ing ma tte r; o r

  • Othe r.
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SLIDE 42

F ile no te s - re c o mme nda tio n

De sig n a nd use yo ur o wn sta nda rd file no te s

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SLIDE 43

F ile no te s - re c o mme nda tio n

Use the la te st te c hno lo g y

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SLIDE 44

F ile no te s – g uida nc e fro m c a se s

Ke rmani v Gaylard & Ors [2011] VSC 46 the fo llo wing c o mme nt is ma de a b o ut the re a so n fo r ma king g o o d file no te s: ‘ ……..I c o nside r it is unlike ly tha t he wo uld ha ve a c le a r re c o lle c tio n o f the spe c ific s o r sub sta nc e o f wha t wa s disc usse d a nd wha t a dvic e he g a ve , witho ut the b e ne fit o f a writte n re c o rd……..’ [106] Re nard & Ge ac h [2013] F CCA 617: ‘ ………A la wye r sho uld a lwa ys ma ke c le a r a nd c o nte mpo ra ne o us no te s o f a ny a dvic e g ive n to a c lie nt, a nd fo r e xa c tly the re a so n tha t ha s le d to this litig a tio n – tha t is, to suppo rt a ny a sse rtio n tha t suc h a dvic e ha s b e e n g ive n a nd to re fute a ny a sse rtio n tha t it ha s no t…….’ [79]

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SLIDE 45

K e y ta ke a wa ys a nd c o nc lusio n

  • Re c o g nise tha t purc ha se rs ne e d tho ro ug h a nd time ly le g a l a dvic e

a b o ut b uying re a l e sta te .

  • E

nsure yo u re c o mme nd tha t purc ha se rs unde rta ke a due dilig e nc e a nd de fine yo ur ro le in re la tio n to a ny due dilig e nc e .

  • K

no w yo ur limit so yo u kno w whe n to re fe r the purc ha se r to a n a ppro pria te e xpe rt.

  • Use a c he c klist to o b ta in ne c e ssa ry info rma tio n fro m the purc ha se r.
  • K

e e p g o o d file no te s.

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SLIDE 46

CONVE YANCING SE RIE S 2020

Maste r ing the e sse ntials

Pr e se nte d by Phil Nolan, Risk Manage r , L PL C