Hiding Assets in Family Law Disputes

You may have heard someone say the line before, or maybe you have even thought to yourself – “I’ll just sell the ‘asset’ to my brother/mother/mate for a dollar”. This is quite possibly one of the most dangerous attitudes a party can have in a property settlement dispute and one of the strongest points to attack the credibility of a party that attempts to hide assets in this way. This blog will state the pitfalls of hiding assets in family law property disputes.

Alternatively, you may be aware of an asset that existed during your relationship that the other party now says no longer exists but have not explained what happened to it.

The reasons this attitude can be so harmful to a person’s case are: –

  • Upon producing evidence of the true value of the particular asset, the Court can treat the transaction as a deliberate attempt to defeat the other party’s legitimate claim; and
  • The Judge can become reluctant to believe your evidence on other points of your case if not corroborated by some independent source.

Immediate Consequences

If discovered during a proceeding, the Court has a wide range of powers to deal with these types of transactions, including: –

  • Dismissing all or part of the guilty party’s case;
  • Ordering the guilty party to pay a portion of the other party’s costs;
  • Restraining the guilty party from relying on any undisclosed information or document as evidence in their case;
  • Imposing a fine; or
  • Sentencing the non-disclosing party to imprisonment for contempt of Court in extraordinary cases.

Future Consequences

If evidence of the non-disclosure or adverse dealing is discovered after final orders have been made in a property dispute, there will be grounds to seek that those final orders are set aside and new orders made. In addition to the penalties that might be imposed listed above, further orders could be made granting a higher entitlement to the net assets of the relationship to the innocent party and that their legal costs be paid by the guilty party.

Finding the Evidence

The obligation of full and frank disclosure that all parties to family law matters have goes a long way to assist in discovering whether a party has disposed of assets or is otherwise hiding assets in some way. The documents parties are obligated to provide include:

  • Bank Statements for all accounts in either party’s name for the last 12 months;
  • Superannuation Statements for all super funds either party has;
  • 3 most recent Tax Returns and Pay Slips;
  • Any valuation reports either party has obtained;
  • Insurance Policies Statements;
  • Share Certificates/stock market portfolios;
  • Trust Deeds;
  • Business, Partnership or Company documents;
  • Title Deeds and Leases of Property.

In some cases, this has also extended to legal advice concerning a range of entitlements, medical reports and settlement offer where either party is making or has made a personal injuries claim.

Other methods of gathering evidence include calling particular witnesses to give evidence and be cross-examined at a hearing, issuing a subpoena to produce documents or conducting online searches through various property registers or ownership searches.

Need help with a family law dispute or want to discuss asset settlement?

     

    What is a property settlement and can you get it done before your divorce?

    If you are separated and heading for divorce, consider finalising your property settlement as soon as possible to secure the best outcome for your future.

    What is property?

    Property refers to all your assets, financial resources, superannuation and liabilities. The Family Law Act defines property as being the ‘net asset pool’ which can include:

    • matrimonial home
    • investment properties
    • bank accounts
    • family Trusts
    • jointly owned assets
    • superannuation
    • shares/interests in a business or companies
    • cars and/or any other vehicles
    • debts

    Why is it better to finalise your property settlement before you divorce?

    In Australia, you cannot file an application for divorce unless you have been separated for 12 months. However, you can commence and/or finalise a property settlement at any time after you separate.

    We strongly recommend people finalise their property settlement as soon as possible after separation and before getting a divorce order. This is because your assets at the date of settlement or trial are what is taken into consideration rather than your assets at the date you separate.

    Because it is likely each party will continue with their lives after separation and in doing so, may buy or sell assets, unless there has been a property settlement, these transactions will affect both parties even though the couple is separated.

    Are married and de facto relationships treated the same?

    If you are married, you must apply for a property settlement within a year of a divorce order becoming final. A divorce order becomes final one month and one day after the date on which the order was made.

    If you are in a de facto relationship, you must apply to the court for your property settlement within two years from the date of separation.

    Failure to commence proceedings in the court within these timeframes means you will need to seek permission from the court to commence proceedings out of time. It is at the court’s discretion as to whether or not they grant permission and they will only do so in limited circumstances.

    How is property settlement done?

    When the court is deciding on a just and equitable division of the relationship property, each case is treated as unique. The court will consider the contributions each person has made to the relationship (both financial and non-financial), together with each person’s future needs.

    Both parties will need to disclose all of their assets and the court has the discretion to split any of the property even if it’s under one party’s name. The factors the court considers when deciding are:

    • future financial needs of each party
    • earning capacity of each party
    • whether they have children and who cares for them
    • age
    • health
    • any other special circumstances
    • whether the division would be practical and in the party’s interests.

    How is a property settlement finalised?

    Property settlement can be finalised either by:

    1. an application for consent orders (which is filed in the Family Court) and orders are made by the court
    2. a binding financial agreement (which is not filed in court).
    Related articles DOMESTIC VIOLENCE IN AUSTRALIAWhat will happen to my pet after separation?

    Cornerstone Law Offices can help you understand your entitlements, negotiate property settlement with your former spouse or partner, and obtain a just and equitable outcome. Call us on 1300 267 637 or fill in the form below.

      DOMESTIC VIOLENCE IN AUSTRALIA

      Domestic Violence in Australia has been recognised as a major public health problem and it affects all people, irrespective of economic, educational, social, geographic or racial background 

      Domestic Violence Statistics  

      Statistics reveal that, on average, at least one woman a week is killed by a partner or former partner in Australia and one in three Australian women has experienced physical violence since the age of 15. Violence against women in Australia is costing Australia approximately $21.7 billion each year. Whilst the statistics for violence against women in Australia are alarming, it is important to note that men can also experience, and be a victim of, domestic and family violence.  

      What is Domestic Violence ?family violence on women

      Domestic violence behaviour encompasses more than physical violence and includes behaviour that is physically or sexually abusiveemotionally or psychologically abusive, economically or financially abusive, and comprises behaviour that is threatening and coercive or in any way controls or dominates a person causing them to fear for their safety or wellbeing or that of someone else. Examples of domestic violence include the following behaviour: 

      1. causing personal injury to a person or threatening to do so; 
      2. coercing a person to engage in sexual activity;  
      3. damaging a person’s property;  
      4. depriving a person of the person’s liberty;  
      5. threatening a person with the death or injury of the person, a child of the person, or someone else;  
      6. threatening to commit suicide or self-harm so as to torment, intimidate or frighten the person to whom the behaviour is directed;  
      7. causing or threatening to cause the death of, or injury to, an animal, whether or not the animal belongs to the person to whom the behaviour is directed, so as to control, dominate or coerce the person;  
      8. unauthorised surveillance of a person;  
      9. unlawfully stalking a person. 

      GPS Monitoring for Domestic and Family Violence Perpetrators  

      The Queensland Government is committed to ending domestic and family violence and has already toughened penalties for Order breaches. Following recent legislative changes, high risk domestic and family violence perpetrators are now less likely to be granted bail. 

      GPS tracking fro Domestic ViolenceIn an effort to enhance community safety and reduce reoffending, the Queensland Government has explored options to monitor high risk perpetrators of domestic and family violenceIn 2018, Queensland Courts were permitted to fit domestic violence offenders with electronic monitoring devices as part of their bail conditions. The GPS device is used to track the location of perpetrators of domestic and family violence and acts as a warning device requiring the Police or another authority to monitor the device and respond. 

      It is important to note that whilst the GPS tracking device is an option to improve victim safety, it is merely one part of an integrated safety plan for victims and should not be used as a stand-alone strategy. These devices are not without problems in operation and rely on line of sight to several satellites, and various environmental factors can adversely impact on the signal quality leading to a loss of signal. More importantly, given that GPS monitoring technology can only track the movements of a perpetrator, and noting that most forms of domestic and family violence are unable to be detected, the GPS device cannot be expected to keep domestic and family violence victims safe on its own and needs to be part of a wider approach.   

      Read related articles:  5 Tips to Start a Prenup Discussion with your PartnerWhat will happen to my pet after separation?Inheritance and Property Settlement During Divorce

       

      If you have experienced or have been charged with a serious domestic violence offence, Cornerstone Law Offices can help.

      Kindly fill in the form below  

        Selling property after a separation.

        Divorce and Family Law A separation or divorce can be one of the toughest things a person will face during their life. There is a lot to think about; where will you live, who gets what, who will the children and pets live with etc. Here are the things to keep in mind when selling a property after separation.
        One thing that can be particularly time-consuming and difficult to deal with in the sale of a property. How you proceed with selling the property after separation will come down to the relationship itself, how the parties are coping with each other and what they each want to do with the property.  

        There are two ways property is sold:

        1. Through agreement and negotiation of both owners, or 
        2. via court orders. 

        As you can expect, if you are in agreement with respect to selling the property, it is a lot easier than proceeding with option and seeking court orders to sell it. 

        Most people need to settle a property sale as soon as possible once they separate, as either one or both parties need to move out and find new accommodation. This is not easy to do if you are still paying a mortgageThere are many things to keep in mind, even if you have both agreed to sell the house. As we know in all relationships, each person has strengths and weaknesses and more often than not, there is one party who is better at handling matters like this and making quick decisions.  

        During the sale of a house, there are a few very important things that need to happen for a seller:

        1. Both parties need to give instructions to their solicitor. When dealing with a separation matter, your solicitor is unable to negotiate or act on your instructions until the same instructions are received from both parties. Remember, as you are both owners of the selling property, you are both considered that solicitor’s clients.  
        2. Some of the things you may need to sign include a Discharge of Mortgage if you have any mortgages over the property, Transfer documents to allow the property to be legally transferred into your name at settlement, Client Documents which is the initially written questionnaire and accompanying documents your solicitor will give you.
        3. Both parties will need to agree with the figures. This is where it can get particularly tricky.Family Law Property settlement

        Many separated couples struggle to agree on figures if a purchaser requests a reduction under a condition of the contract, most commonly the building and pest condition. Until both parties agree on the reduction, they are willing to give, no negotiations can be entered into with the buyer. 

        Some people also struggle on the split of funds at settlement. Someone may have paid off more of the mortgage during the relationship, someone may have put a lump sum into it, someone may have paid for renovations, someone’s parents may have gifted them the deposit, and the possibilities go on and on. 

        At the beginning of the matter, your solicitor will ask you if you have agreed on how the funds will be split at settlement. If you have not by that time, they will let you know you need to before settlement. When it comes close to a settlement, you will be given a statement showing how all adjustments (rates, water, mortgage discharges, reductions etc.) have been accounted for. They will detail cheques required to pay off their fees, any outstanding bills, any commission to your real estate agent, any payout figure to your bank. Most of the time there will be a lump sum left over – which you both, as the clients, need to instruct your solicitor on the agreed split of those monies.

        If you are unable to provide agreed on instructions on the way this will be split; your solicitor will have no choice but to retain all the excess funds from the settlement in their trust account until you can agree. This is generally when the parties will be instructed to take the matter further to obtain a court order for the way these funds will be split.

        Property SettlementShould parties not agree on the split of funds or one party refuses to give instructions or sign documents, your solicitor will then require that one party seeks independent representation in settlement of the contract or recommend you apply for orders to force the sale/detail the split of funds. Court orders (option 2 above) take time to be put in place, especially during the COVID-19 Pandemic. The courts are extremely busy, and it may take you many months to obtain a Judgment as to how the funds will be split at settlement.  

        Court orders can also be sought at the very beginning of the matter if one party does not want to sell the property. Please note the time it will take to obtain a Judgment and the cost of seeking the orders from the court.  

        As you can see, while it can be a very hard thing to deal with, especially when going through a separation, it is in everyone’s best interest to agree with selling the property and how the funds will be split, before you proceed to sell the property. 

        Each separation is different, and each party needs to do what is right for themselves in that situation. However, if you do need to sell a property following a separation, please keep in mind the above pitfalls and potential traps you may encounter so you are prepared for what may come.  

        Related articles What will happen to my pet after separation?Inheritance and Property Settlement During Divorce .

        Talk to your Family Lawyer now

          Inheritance and Property Settlement During Divorce

          The question often arises as to how the inheritance should be dealt with in a property settlement during a divorce. Inheritance in property settlement during a divorce generally fall into one of three categories:

          1. Inheritances received during the relationship;
          2. Inheritances received late in the relationship or following separation;
          3. Anticipated or prospective inheritance – where a party to a relationship is likely to receive an inheritance in the future. Divorce, Family Law

          Each case is different, and the extent to which an actual inheritance or a prospective/anticipated inheritance will impact on a property settlement will depend on the individual case. The Court has broad discretion on how to deal with issues in family law, but the question remains as to what weight will be given to the contributions of the parties. Some factors which are taken into account include:

          • When was the inheritance received (e.g. whether it was received early on in a lengthy relationship vs right before separation in a short relationship);
          • The value of the inheritance (in comparison to the size of the parties’ asset pool before the inheritance was received).
          • Relationship with the person leaving the inheritance (“the testator”) – even though one spouse may have been left an inheritance, the other spouse may also have had an important relationship with the testator and contributed in a way to the inheritance. (e.g. carrying out maintenance and improvements to the inherited property, doing odd jobs for the testator, allowing the testator to live rent-free with the parties, accompanying and/or taking the testator to appointments, etc.)
          • Whether the assets received by way of inheritance by one spouse became communal and co-mingled with a joint asset or whether the inheritance was quarantined by one party.
          • What is actually done with the inherited asset or funds (e.g. whether they were used to improve the financial circumstances of the family);

          You might also be interested in reading about What is a Binding Financial Agreement and when can it be challenged?

          Everyone must get early advice from an experienced family lawyer on their specific circumstances. Contact Us

          An inheritance received during the relationship 

          If an inheritance has already been received, this amount will be included in the asset pool available for the division, as no item of the property falls into a special protected category simply because it is an inheritance or the proceeds of an inheritance. The inheritance is taken to be a contribution made by the party who received it, and what weight the Court gives it will depend on all the other contributions made by the parties across the entirety of the relationship.

          An inheritance received late in the relationship or following a divorce 

          All assets, liabilities, superannuation interests and financial resources in each party’s sole name or jointly with another, or that each party has an interest in, at the time of reaching an agreement or trial must be considered in a property settlement. This includes assets, liabilities, superannuation and financial resources accumulated by either of the parties’ late in the relationship or post-separation.

          Accordingly, an inheritance received later in the relationship or following separation/divorce, will be factored into your property settlement matters with your former spouse. The inheritance may be included in the asset pool available for division, or it may be considered a financial resource of the party who received it depending on the circumstances. If it is included in the asset pool, then it becomes a question of what contribution the other party may have made to that asset.

          If your property settlement has been finalised, then your former spouse will have no claim to an inheritance you receive post-separation under family law. This is one of the reasons why it is essential to finalise your property settlement matters by way of the necessary legally binding paperwork as soon as possible after you separate.

          Anticipated/ prospective inheritance to be received in the future  

          Generally, if a party to a relationship is to receive an inheritance in the future and the person providing the inheritance is alive and still has the testamentary capacity, it is unlikely the inheritance will be considered in the property settlement. This is because that person can change their Will at any time before their death, and there is no guarantee that a party will ever receive the inheritance.

          However, in circumstances where:

          1. the testator has lost testamentary capacity, meaning that the testator cannot change their Will legally;
          2. there is a high probability that the testator will pass away very soon; and
          3. the party will receive the inheritance by the terms of the Will;

          then it is likely that the inheritance will be considered in your property settlement matters either as an asset forming a part of the asset pool available for division or as a financial resource. An anticipated inheritance may be considered a future financial resource, particularly in circumstances where the inheritance is not likely to be received in the near future, but again it must be more than a mere possibility that the party will receive the inheritance; it needs to be shown that the party has an expectancy of receiving the inheritance.

          Related topics Child Custody Law

             

            COVID-19 Impact on Parenting Orders.

            We understand that during these unprecedented times surrounding the Covid-19 pandemic, parents are naturally concerned about the safety of their children and how the restrictions will affect their lives and executing parenting orders during COVID-19.

            Children benefit from structure, routine and consistency. Therefore, as far as possible, parents should ensure that they continue to comply with parenting orders and parenting agreements, to facilitate time being spent by the children with each parent.

            COVID-19 Impact on Parenting Orders:

            However, it is understood that every family’s circumstances are different. If parents are unable to comply with Court orders in relation to parenting arrangements, and that failure to comply is out of their control, for instance, the children’s Contact Centre where supervised time/changeover was occurring is no longer operating due to Covid-19, parents must continue to communicate with one another (providing it is safe to do so) to find a workable solution and reach new or revised arrangements. Parents should always consider the safety and best interests of the children when attempting to reach alternate parenting arrangements, as opposed to what suits them personally.

            Where parents are successfully able to reach alternate parenting arrangements, this agreement should ideally be written down via text message or email between each other, which will assist all concerned, including the Court, to understand what arrangement is in place.

            If the parties are unable to agree to vary the agreement, or if it is unsafe to do so, and one or both parents continue to have real concerns about the children’s safety, the parents are encouraged to attend mediation. If that fails, then they are at liberty to apply to the Court to seek a variation of the orders.

            Read more about binding child support agreement.

            The Federal Circuit Court of Australia and the Family Court of Australia remain open to assist parents during this time of crisis and Judges will be prioritising urgent matters. Where there is no Brisbane-courts-supreme-districtagreement, parents should keep the children safe until the dispute resolves. Moreover, during this period of dispute, it is each parent’s responsibility by law, to ensure the children are spending time with their other parent, consistent with the parenting orders or arrangements, such as by Facetime, zoom, Social Media, or if that is not possible, by telephone. This is to ensure the purpose of the orders are respected when considering altering arrangements, and parents act in the best interest of the children at all times.

            As the Government has not mandated an absolute lockdown (quarantine), although there is substantial guidance on physical distancing, parents are unlikely to be justified in withholding the children unless complying with specific quarantine rules. When considering whether or not to withhold the children from the other parent, parents must act reasonably. To act reasonably, or to have a reasonable excuse for not complying with Court orders, is a matter that is considered by the Court.

            Related Five Myths of Divorce and Separation.

             

            How we can help in parenting matters?

            Cornerstone Law Offices remains open to assist Australian families in these challenging times and offers the following services during this time of crisis:

            1. Provide advice to parents and/or carers regarding parenting arrangements.
            2. Engage in negotiations/mediation to attempt to reach new or revised parenting arrangements.
            3. Formalising new or varied parenting agreements by way of consent orders and filing them with the Court.
            4. Appear on behalf of parents and/or carers in parenting matters currently before the Federal Circuit Court of Australia and the Family Court of Australia.

              Pitfalls to avoid when buying or selling a house

              Whether you are a buyer or a seller, a first-home buyer, an investor, or a seasoned household owner, there are many mistakes that people make in conveyancing.  Here are a few of the most common mistakes:

              • using incorrect spelling or informal names on the contract
              • failing to meet contract deadlines
              • failing to obtain searches (as a buyer)
              • failing to include chattels/fixtures in the contract.

              Incorrect spelling or use of informal names

              For an agent:

              • When drafting a contract, ensure you write down both the seller’s and buyer’s names correctly. Obtain copies of all parties’ government-issued identification (drivers’ licence) so you can check.
              • Ensure you have a copy of the title search for the property you are selling as this will ensure you have recorded the seller’s name exactly as it is depicted on title.
              • Make sure you include all parties to the settlement i.e. multiple buyers must all be correctly listed.

              For a buyer or seller:

              • Check that the contract has your name spelt correctly.
              • If you have a middle name, use it.
              • If your name is spelt incorrectly, change it.

              Repercussions:

              As a buyer or seller, if your name is spelt incorrectly on a contract and you proceed with the contract, your conveyancer will need to have this amended. This can incur extra costs with some fixed-fee conveyancing agreements.

              If the buyer’s name is spelt in correctly in a contract and they are obtaining finance, the financier will require the contract to be amended to ensure the name is listed correctly on the contract. Depending on how long both parties take to agree to amend the contract, your finance could be delayed by weeks as a financier cannot progress a loan agreement until the application matches what’s on the contract.

              If your incorrect name happens to slip past all these parties, the property will be transferred into the name of the person on the contract. This will not be your legal name and can have significant impacts on your estate should something happen to you. To change a name once it is registered on title, an application to amend needs to be lodged with the Queensland Titles Office. This will incur further costs and can take months to be amended.

              The rule is simple: spell check before you sign.

              Contract deadlines

              The most common deadlines or dates in a residential contract of sale are:

              • cooling off
              • finance
              • building and Pest
              • special conditions
              • settlement.

              On a standard Real Estate Institute Queensland (REIQ) contract, most of these conditions have a date within which they need to be met. This can be a certain number of days from the contract date (i.e. 14 days from contract) or have a specific date listed (i.e. 11 July 2019). A settlement date can be written in a few different ways which can be confusing to the parties of the sale.

              Cooling off
              A cooling-off period is automatically built into all REIQ residential sale contracts. You will find the disclaimer just above the execution panel on your contract. This disclaimer advises that you as a buyer have five business days, following the execution of your contract, to pull out of the contract for any reason.

              A termination penalty of 0.25% of the purchase price is required to be paid by the buyer should they pull out under this condition. This is included as a protection for the seller to prevent people signing contracts and pulling out for no reason.

              The cooling-off period does not apply to the seller. Once a seller signs the contract, they cannot terminate unless the purchaser is delayed in satisfying one of its conditions detailed under the contract.

              Finance, building and pest, and special conditions
              The date each of these conditions must be met will be listed on the contract. The most common timing for these conditions is 14 days from the contract date. Buyers should be proactive and start applications to ensure these conditions are satisfied within the specified timeframes.

              A finance application with a general bank will take a minimum of seven days to be conditionally approved. However, they can take anywhere between 14 to 21 days to give formal approval. When you start looking to purchase a property, go to your financier or mortgage broker and get conditional approval. Once you are conditionally approved, the formal approval is much easier to obtain and you can become conditionally approved without a contract. The financier will advise you of the maximum amount you are conditionally approved for and you can proceed to look at purchasing houses for that amount and under.

              In order to satisfy a finance condition, you need to provide your conveyancer with the following:

              • a copy of the formal approval letter you received from your financier
              • written advice (an email) from you advising you are happy with the offer from that financier and wish to satisfy this condition in the contract.

              Your conveyancer must obtain these instructions from you in order to satisfy this condition.

              Depending on the size of the property you are purchasing, a building and pest inspection generally takes between one and two hours to complete. Once you sign a contract, you need to call around to obtain quotes and book an inspection as soon as possible.  You should arrange a time for an inspector to attend the property when it is suitable for the sellers to provide access to the property. Liaise with the real estate agent to arrange a suitable day and time.

              Once the inspection is done, most inspectors will give you a short verbal run down of the property. They will then forward you a written report.  Be patient as this takes time for them to write up (generally 24 hours following inspection).

              It’s important to have this inspection done as soon as possible as issues may arise in the report that you may want to negotiate on.

              If you want to negotiate under the building and pest condition on a contract, you need to provide your conveyancer with a copy of the report and detail in writing (email) exactly what the issues are and what you want the seller to do about it. Once they have that information, your conveyancer will contact the agent and the seller’s conveyancer to begin negotiations.

              Negotiations can take days or even weeks to resolve and generally take one of two forms: either a price reduction or a request for repairs. If you request a price reduction this means you are willing to accept the property as is, if the seller agrees to reduce the purchase price by an agreed amount. This reduction will then be accounted for at settlement. If you request repairs be done by the seller, they need to undertake these repairs/works prior to settlement and provide you with a copy of the invoices showing the work was completed by suitably qualified tradesperson.

              Once you satisfy the building and pest condition, no further negotiations take place. So, you should ensure everything is agreed in writing before your condition date under the contract.

              Special conditions can take many forms. They can be for due diligence (generally when you need further information on the property because you are wanting to do something like build), or for when the seller needs to do something prior to settlement (repair something broken or replace something in the property), concurrent settlement (of your sale property) etc. There are many special conditions that can be written into a contract of sale.

              You should discuss these with your conveyancer prior to signing a contract containing special conditions to ensure you are aware of their implications during the sale process.

              Generally, settlement date is listed in the contract as 30 days from the date of the contract. When it comes time for your contract to settle you need to ensure you are ready.

              As a buyer you need to ensure:

              • Your financier is ready to provide funds.
              • Any extra funds you are putting into the purchase are with your financier or conveyancer.

              As a seller you need to ensure:

              • Your mortgagor (if any) is ready to release your mortgage on the property.
              • You are packed up as you need to be out of the property by settlement time.
              • You have completed any repairs under negotiations made during the process of the contract.

              What happens if you don’t meet a condition by its due date?
              This is a question that not many people ask, but all parties involved with a sale contract should. As a purchaser, if you miss a deadline, you give the seller an opportunity to terminate the contract. Under REIQ contracts, a condition is not assumed satisfied simply because the due date has passed. All conditions are due by 5pm on the due date.

              If the due date passes and a condition has not been satisfied, then the first email received by either party is taken to have precedence, that is, if the purchaser doesn’t satisfy the building and pest condition by 5pm on the due date, then the seller is within their rights to terminate. If you have your conveyancer send an email at 8:31am the following morning to satisfy, but they already received an email from the seller’s conveyancer terminating the contract prior to this time, the contract will be terminated. If they haven’t received any email, then your satisfaction email is taken to have precedence and the contract is still on foot or valid.

              If you are still in negotiations on a condition and the due date is looming, you need to request an extension of that condition prior to 5pm on the due date. Please note that until the seller agrees in writing to that extension, at any time between 5pm on the due date and receipt of that extension agreement, the seller can terminate the contract.

              This is why it is extremely important to start on contract conditions immediately after executing the contract. This allows enough time to negotiate, extend and receive a response before the due date.

              Searches
              As a seller, you don’t need to obtain any searches. It is the purchaser’s responsibility to obtain the searches required to complete settlement. Sometimes you may be asked to provide copies of your latest rates and water searches to assist in a quick settlement.

              As a purchaser, there are a couple of standard searches that you need to obtain so your conveyancer can adequately prepare for settlement. Upon your instruction, your conveyancer will order searches. These standard searches include:

              • rates
              • title
              • special water meter read
              • land tax clearance certificate
              • body corporate (if applicable).

              There are many other searches you can obtain in addition to the required searches. Depending on what you want to do with the property, you may wish to obtain further searches.

              For example, if you want to dig in the yard to build a shed you will most likely need to get a sewerage and drainage search. If you are buying a property with a pool, you’ll want to do a pool register search. If you know there is development in the future that might affect you at the property, you could seek a copy of the Department of Transport and Main Roads search.

              A due diligence special condition is inserted as a special condition when there are specific searches that you want to get and if the result is unsatisfactory to you as the purchaser, you may wish to terminate the contract. These generally occurs in sales where the purchaser intends to demolish and rebuild on the property.

              In a standard purchase, if you don’t obtain the above standard searches, you are putting yourself at risk of having to pay outstanding fees. These searches advise what has/hasn’t been paid for each service. For example, there might be outstanding land tax payable on a property, but if you as the purchaser don’t obtain the search to find out and subsequently request this amount be paid by the seller at settlement, then you become responsible for paying this amount. This is the same for outstanding rates, water, and body corporate bills.

              Chattels/fixtures
              The general rule to determine whether an item is a fixture or a chattel is to consider the degree to which that item is affixed to the property. For example, if you must unscrew something which will damage what it is screwed into to remove the item, it is generally considered a fixture.

              There is a specific section on an REIQ contract where both the buyer and seller need to write down what will be staying/leaving the property upon settlement.

              If you are expecting to take anything as a seller, include it in the contract.

              If you are expecting anything to stay as a purchaser, include it in the contract.

              The rule is that any fixtures are required to stay with the property and any chattels are required to be taken away following settlement unless specified in the contract.

              General examples of fixtures:

              • carpets
              • blinds
              • pool filter
              • solar panels
              • clothesline.

              General examples of chattels

              • fridge
              • washing machine
              • pot plants
              • television.

              Remember: it all comes down to the degree of affixation. If in doubt, include it in the contract.

              These are just some of the common mistakes that agents, buyers and sellers make on a contract of sale/purchase. To avoid these pitfalls, remember that the more information you put into a contract, the safer and easier the transaction will be. If you want to include special conditions, discuss it with your lawyer or conveyancer prior to signing the contract to ensure it gives you the protection you want.

              Let us help you avoid these pitfalls
              At Cornerstone Law Offices, we are a full-service, general practice law firm. We specialise in Family Law, but also practice in property, crime and traffic, migration and wills and estates. We pride ourselves on providing our clients with the highest quality of service to assist them in any matter they may experience in their lives. We have specialist lawyers in all areas of law, with offices in North Lakes, the Brisbane CBD, Logan and the Gold Coast. We can be contacted on 07 3806 4354 or email info@cornerstonelawoffices.com.au