Selling a property in or near Liverpool soon? Consider this offer about a contribution to a worthwhile charity!

Macquarie Real Estate is a local real estate agent located in Casula, near Liverpool NSW.  Yesterday its principal, Joe Romeo, informed me of the following offer he’s making.

Any property listed with his agency before 30 June 2011 that results from a referral from such as what I’m doing here in this blog, when that property is sold (even if it’s after 30 June 2011) he’ll donate 20% of his commission to a charity nominated by us.  You need to mention to them how you heard about the offer when you sign up.

If you take up this offer, sell the property through them, and mention you heard about it here, I’d be more than happy to discuss with you and come to an agreement about a worthwhile charity you’d like me to direct to have Joe’s donation sent to.

What’s the catch?  Apart from the agent getting a listing (and most sellers list the property they’re selling with an agent anyway) there isn’t one!  I don’t receive any payment, gift, commission or special favour (and I never have).  There’s no condition about which solicitor you use either.

Have a think about it.  Better still, if you’d like to ask me about Joe and his team, give me a call.

Lender’s mortgage insurance premiums - One way to “make” some money back!

While the typical average Australian home loan term is around 25 to 30 years, the average length of a home loan is reported to be 5 years, some say even as low as 3½  years.  If these figures are averages, there must be many loans that are discharged much sooner.  In my experience, it’s becoming rarer for a home buyer to live in the one home for lengthy period of 20 years or more.  Australians buy and sell their homes for a variety of reasons:  to improve their lot; so called sea changes and tree changes; moving to where the jobs are; moving out when jobs are gone….

So, the issue is, while home loans are typically designed for the long term, most often borrowers barely last the distance.  Many borrowers are also required to pay their lender’s mortgage insurance premiums.  This insurance covers the lender, not the borrower, but it’s the borrower who pays the insurance bill.  I’ve seen such premiums as high as $18,000, but typically are around the $4,000 to $8,000 mark.

The premiums are a once only payment, providing cover for the term of the loan… remember, terms that are assumed to be for 20 to 30 years!  But many of these loans are discharged within 5 years.

So, what happens for that part of the premium covering the term of the loan that’s no longer there?  Nothing, unless you do something about it!

Have you ever sold a car and then obtained a part refund of your insurance premium when you cancelled your insurance cover?  It’s a comparable situation.

Many lenders don’t tell you, but in most cases you can do something similar regarding lender’s mortgage insurance premiums you’ve paid if you pay off your home loan early.  The earlier it’s paid off (for example, you’ve sold the property) the greater the chance of a significant refund of part of the previously paid premium.

The refund amount varies, and many factors can affect it.  For example, whether the borrower has defaulted, how many (or how few) years of the loan have passed, but it can be up to 40 to 50% of the original premium!

It’s the mortgage insurer that ought to be approached, rather than the lender, but if you’re about to borrow and a lender’s mortgage insurance premium is payable, it would be very prudent to clarify with your lender their policy on refunding mortgage insurance premiums.  Be prepared to be firm and press for an answer.  Many lender’s staff and some brokers aren’t even aware of this, so they may need encouraging to find out more for you.

A little will power now, can save rather a lot later...

If you want to leave someone out of a will, the costs later may be very much higher than expected.

I regularly advise and prepare wills for clients – nothing unusual about that for a suburban law office.  Many times my advice includes that in making their will, they consider its effect on those left behind, particularly their loved ones, after they’re “gone”.  That might include thinking about the bigger picture rather than concentrating too much on getting back at someone.  This can be difficult for clients, especially when some emotion is involved and we can’t access a crystal ball that works!

For a long time we’ve all had rights and freedoms to deal with our property as we see fit for that day we’re no longer here.  But those rights and freedoms need to be exercised with other laws in mind that allow certain people who feel they’ve missed out from a share, or a bigger share of an estate, to ask the court to effectively adjust the will’s distribution of a deceased person’s estate.

For example, clients with modest to substantial estates may make little or no provision for one of their children.   Reasons can include estrangement, perceived drug issues, assumed wealth, even not getting a Christmas card!  My advice to the will maker in these cases is to inform of some consequences they may not have considered… such as exposing the estate to possible unintended but costly litigation.

An article in today’s Sydney Morning Herald describes a situation that I’ve encountered, unfortunately, many times – the risk of very high legal costs because the will maker, for whatever reason, didn’t make a gift to someone who probably expected a fair provision.

If you want to leave someone out of a will, the legal costs payable by your estate later may be very much higher than expected.

Each individual’s situation is different but if this sounds too familiar to your situation, a little prevention now, such as making a gift in a will that you may not have originally intended or wanted, can be a small cost now to help reduce the risk of much, much higher costs later.  Does this sound like you?  Have a chat with your solicitor about it!

Quality practice, better service...

Alvaro Edwards Solicitors is a quality endorsed legal practice. But don't just take our word for it!

SAI Global just completed its second Triennial Recertification Audit of Alvaro Edwards Solicitors' quality management system.  I'm proud to announce that with the support of all management and staff, we have again achieved quality standards recertification to Legal Best Practice ISO 9001/LAW 9000 - a certified standard we first attained in 2005 and continuously maintained since.  Our licence number is LAW20005; Alvaro Edwards Solicitors is one of the earliest law firms to achieve this standard in NSW.

The recent audit report states:

The firm continues to maintain and regularly update the quality management system and supporting procedures to reflect preferred best practice in the provision of quality services to its clients.

The quality system benefits the way we run our business but importantly, it translates into a commitment to better serving our clients.

The process is an ongoing one, and our journey doesn't end with the recent audit.  I'm always conscious of the need to continually improving our processes and serving our clients.

The SAI Global certification process provides an outside independent auditing and certification structure for quality systems to ensure compliance with international quality standards.

The prospect of cheap beer sure did taste good...

Recently it was milk, and now its beer!  It appears that the country's two giant supermarket chains were about to start a price war on beer by selling cases for less than the wholesale cost.  This seems to me be a variation of the old "loss leader" practice where a retailer deliberately makes a loss on a product in the expectation the great deal will attract customers and once in the retailer's store, the customer is likely to spend more on other goods.

In the case of the looming beer price war, it seems it's might be no more.  Foster's has refused to supply these supermarket giants. While cheap price beer is a tasty prospect, I guess Foster's sees such gross discounting as likely to cheapen its brand image.

But hang on.  Under our trade practices laws, a supplier can't withhold or threaten to withhold supplying goods if the retailer refuses to sell at a particular price.  This is an offence known as resale price maintenance.

But there's more.  In certain limited cases, this practice is actually allowed.  Just after the provisions prohibiting resale price maintenance in the Competition and Consumer Act (previously, the Trade Practices Act) it provides certain exceptions in cases where "…goods obtained... from the supplier at less than their cost…"  

And that's the catch!

Buying off the plan on again?

A headline in Sydney’s major broadsheet newspaper today succinctly declares “Off-the-plan unit sales run hot”.

If you’re considering taking advantage of buying a property “off the plan, It’s probably timely to take a deep breath, not get caught up in any hype, and just recall some of the pitfalls that can and do occur.

One claimed benefit of buying off the plan is that some consider it a good opportunity to purchase at a price that is more likely to be considered a bargain when the property is eventually developed and the purchase completed.  The time from contract date to completion often won’t take place for several months, if not a year, or two, or three!

So what are what are some potential issues?

The completion date – how does the contract define it.  More importantly, what obligations, if any, are on the developer to comply, and how can it be extended.  What rights does the buyer have to get of a deal that keeps getting delayed?  Can you as buyer get stuck with a deal that’s gone sour and delayed by years?

Do you know exactly what you’re getting? Really, do you?  Is the quality of appliances comparable to those in the brochure or display unit?  What about dimensions?  What scope is there for variations between the dimensions in the contract and what ends up built?  Can you end up being stuck buying a butter box rather than the penthouse you expected?  Are the tennis courts and swimming pool part of a later stage, one that may take years to develop, if ever?

Don’t forget your deposit bond.  These have expiry dates.  A buyer can unintentionally be in breach if the bond expires, because of continued delays.

Then, of course, there are building defects - how are these defined; what obligations are on the developer and the buyer?

Lots of questions, but few answers I’m afraid.  These are all real issues that do arise, and often in off the plan purchases.  Sure, they can arise in any property purchase, but buying off the plan is something akin to buying vapourware.

Just make sure you’re not rushed into signing anything, seek legal advice on the contract, and keep a cool head.  Yes, there can be advantages and savings, but just know there are risks to balance too.

Forcing strata owners to sell

There has been discussion in some circles for a while now about forcing minority owners of strata property to sell their units if, for example, three quarters of the owners in the particular strata plan want to do so. Here's an article by Paul Bibby in yesterday's Sydney Morning Herald that gives a good summary of the issue and at least the point of view of developers.

The example cited in the article is fairly typical "...one of the 16 owners - an 80-year-old woman who is refusing to leave because she has convinced herself that she'll die if she does - is refusing to sell, everyone is stuck there while the whole block gradually falls to the ground...".

Most of the points of view I've seen so far are from the perspective of developers and majority owners. I can quite understand their views; I know of an owner of a small shop in a small commercial strata complex. who just cannot sell his small strata shop to a very willing developer. There's about 7 or 8 owners. The site's old, the individual shops are tired looking though still all trading, but its crying out for development (read "bulldozed"!). There have been a number of approaches by developers in recent years but all proposals stalled due to the refusal of one shop owner who's very happy with his business and how things are.

Whilst at first glance the proposals appear reasonable, I haven't yet seen arguments from the minority point of view.

Take the example cited about the elderly woman. She has her home, presumably she fully owns it and is happy to remain there, and she has some fears if she's forced to move. No doubt she's also built up a network of friends, services and care professionals she relies upon in her day to day living. Perhaps she's not happy with offers made too. Why should she be forced to yield to the other owners and developers? If forced to sell, even if she gets a fair price, what's to say she can afford to purchase or move into another comparable property. The Property Council proposes measures to safeguard the rights of owners like her, but what about her right to stay put?

I guess another way of asking this is, how is the position of the unyielding strata owner different from the position of a home owner who refuses to sell their house on a suburban block to a major developer notwithstanding pressure from all their neighbours? As far as I'm aware, except in the case of a compulsory property acquisition by a public authority, there's no way to force a law abiding property owner to sell their property to a developer.

I'm not advocating no change, but it's only fair that all views are considered and fairly considered and dealt with.

It may not affect many of us but if the proposals succeed, what's to stop developers sometime in future moving legislate for the forced sale of your home or farm?

Liverpool - in Sydney's south-west - again tops first home grants

The latest NSW Office of State Revenue data shows that again, the area (by postcode) receiving the most first home benefits in NSW (both in terms of total grants and total value of the grants) are made to buyers in Liverpool, in Sydney's south-west.

In the 12 month period to 30 November 2009, there were 1,345 first home grants received in the Liverpool area totalling over $19.9m. There were slightly more recipients of benefits under the NSW First Home Plus scheme, which includes stamp duty exemptions in addition to the grants. When the First Home Plus benefits are included, the total value of benefits to first home buyers in NSW totalled over $33.9m for the same period.

From when the grant scheme commenced on 1 July 2000 to 30 November 2009, Liverpool also tops the list, with 8,097 grants. This is significantly more than the area with the next highest recipients, Wentworthville, with 5,603.

I understand the national figures published by the ABS are scheduled to be published this month.

It's that thing that sustains... Hope!

"...Another year over; And a new one just begun..."

Christmas 2009 in our house has now been and gone. In our case, the joy expressed its presence in many ways, including, of course, amongst our children and their cousins. It was especially a happy occasion to witness my now 12 year old to play along, without being asked, and maintain the enchanting attraction that is Santa Claus for his younger siblings and cousins. We even saw Rudolph's shining red nose high in the sky at 1.30am Christmas morning!

Now, facing the New Year, I've pondered about why and what it means. I mean, it's just another 1st of the month, really. Sure, there's the celebratory Champagne (or three!), resolutions for may others, and the real beginning of the summer holidays.

It’s a hard one! I suppose its really many things – mostly positive - the promises of new beginnings, the chance to recommit to old goals, the pledge to extend ourselves, to be thankful for the things we do have.

To some degree at least, the one explanation I think that captures all about what the New Year means, is Hope! Hope we can do better - financially, spiritually, emotionally, and materially - for ourselves, our friends, loved ones and our communities.

Wishing you a very Happy, success in your pursuits, and a safe New Year!

"...Let's hope it's a good one; Without any fear..."

NSW Stamp Duty Concession Extended!

Following lobbying by the building industry, the NSW government announced an extension of the concession available in NSW under the Housing Construction Acceleration Plan, to 30 June 2010. Before the extension, this benefit was due to end tomorrow, 31 December, 2009.

The scheme, originally announced as part of the government's economic stimulus plan, applies to contracts entered from 1 July 2009, is not for first home buyers; it's for eligible buyers of newly built homes up to $600,000.00. Eligible applicants are entitled to a 50% discount on stamp duty. Contracts now must be entered on or before 1 July 2010, and construction must be completed by 31 December 2011.

What could this mean to you? If you're not a first home buyer but you're thinking of building a new home in New South Wales, if you enter such a contract after 1 July 2009 and before 1 July 2010, you could save up to just over $11,000.00 in stamp duty.

There's more detailed information in an updated factsheet on the Office of State Revenue's website.

On a different note, the federal government's $7,000.00 grant to new home buyers as well as the grant of $3,000.00 to buyers of existing homes does however end on 31 December, 2009.