Real Estate Agent’s Email Hacked – Warning to all parties in real estate transactions

A recent NSW case involving the hacking of Real Estate Agent’s email, provides a warning to all parties in real estate transactions to be vigilant when transferring funds. In Deligiannidou v Sundarjee [2020] NSWSC 437, an estate agent sent the buyer an email reminding them to pay the deposit by EFT, setting out their trust account details. Two days later, the buyer received another email from (what appeared to be) the agent, attaching an invoice for the payment of the remaining deposit. The email was a part of the previous email chain, including the previous email that requested the EFT payment. However, the BSB and account number in both the first and second email had been changed to match the fraudulent details. The buyer paid the deposit by EFT into the fraudulent account, failing to notice the change in BSB and account details from a previous payment. The agent also failed to notice the different account details in the screenshot confirming payment. The agent’s direction to the buyer to pay the deposit by EFT into the agent’s trust account was contrary to the terms of the contract, which require payment by cash or cheque. Consequently, the Court had to considered whether the agent was authorised by the seller to direct payment by EFT. The Court ruled that the agency appointment did not authorize the agent to act on behalf of the seller when accepting payment of the deposit as stakeholder or under the contract. As a result, the buyer was in breach for failing to pay the deposit in accordance with the contract or as directed by the seller. Whether the real estate agent was liable to the buyer in its capacity as a stakeholder was not an issue considered by the Court. This case demonstrates that parties should not rely on details conveyed by email, and when transferring large amount of money, details should always be confirmed with the sender of the email personally.

Do you have ‘a reasonable cause’ to lodge a caveat?

In the recent case of Boensch v Pascoe [2019] the High Court gave clarity in relation to what was a ‘reasonable cause’ to lodge a caveat, for the purposes of claiming compensation under s74P of the Real Property Act 1900. In the case, Mr Boensch was a trustee holding property beneficially for his children, and was subsequently declared bankrupt. Mr Pascoe was appointed his trustee in bankruptcy and lodged a caveat over the Trust Property. Mr Boensch commenced proceedings claiming that Mr Pascoe did not have reasonable cause to lodge a caveat over the property. The Court emphasised that one does not have a reasonable cause if they do not have a caveatable interest and if they do not have an honest belief based on reasonable grounds that they have a caveatable interest. The High Court ultimately held that if a trustee in bankruptcy has reasonable grounds to conclude that a bankrupt trustee has a beneficial interest in property held on trust for another, the trustee will have justified cause to lodge the caveat Therefore, Mr Pascoe as the trustee in bankruptcy had a reasonable cause and Mr Boensch was not entitled to compensation. This case provides guidance for trustees in bankruptcy as to when lodge a caveat on property held by a bankrupt on trust and highlights the importance of ensuring that caveats are lodged with reasonable cause.

 

Significant changes in respect of lapsing development consent

Last week, 2 significant amendments were recently introduced in relation to the lapsing of consents – work and extension of time. The Environmental Planning and Assessment Regulation 2000 (EPA Reg) was amended to prevent preliminary works from stopping a consent from lapsing. This means that the work outlined in the new clause 124AA will not be sufficient to constitute a ‘physical commencement’. In addition, s4.52 of the EPA Act was amended to include that if a development consent had commenced before 25 March 2020, and has not yet lapsed, it will now lapse 2 years following the date on which it would have otherwise lapsed. This extension also applies to development consents the subject of a deferred commencement condition. Further, if a consent lapsed after 25 March 2020, and before the commencement of the amendment on 14 May 2020, it will be revived and not taken to have lapsed, with the beneficiary having another two years to commence development.

Can a commercial landlord dispose of goods left behind by a former tenant?

In the recent case of Roads and Maritime Services (RMS) v Young [2020] NSWSC 529 the Supreme Court of NSW considered the circumstances where a landlord can legally dispose of goods left behind by a former tenant. Legally, a landlord’s right to dispose of goods tend to be governed by the lease. However, if there is not a covenant in the lease, or if the landlord would like further certainty, a disposal order can be obtained under the Uncollected Goods Act 1995 (NSW). In this case RMS claimed $132,000 for the costs of destruction, demolition and disposal of a houseboat left on their premises, plus $9,154.20 for disconnection of services and $2,585 for a survey. Fagan J was satisfied that the clause in the lease authorized the RMS to dispose of the fixtures, and therefore it was not necessary to invoke the Uncollected Goods Act. However, when commercial landlords are unsure, they should obtain an order for disposal of tenant’s goods, a relatively simple and inexpensive procedure. Such an order has the advantage as it is made with authority by the Court, conferring good legal title on a purchaser in cases where the goods are sold by private sale.

Do you need to renew your registrations on the PPSR?

The Personal Property Security Register (PPSR) is an electronic platform on which security interests in assets and personal property can be registered and searched. The default registration period for registrations on the PPSR is 7 years. Due to the fact that the PPSR was introduced in January 2012, registrations have been expiring since 2019. If you are a registered party on the PPSR, it is extremely important for you to seek an extension on your registration before it expires, as when an existing registration is extended, it retains its original registration and priority. Contact b+a to ensure you existing security interests continue to be protected, or to have new interests effectively registered on the PPSR.

2020 Land Tax COVID-19 Relief for Commercial and Residential Landlords

The NSW Government has introduced measures that provide relief to commercial and residential landowners, who provide a reduction in rent to a tenant experiencing financial distress as a result of COVID-19. Landowners will receive a reduction in their land tax payable for the 2020 land tax year if:

  • They’re leasing a parcel of land to a commercial tenant, who has an annual turnover of up to $50 million, or a residential tenant
  • The tenant is in financial distress as a result of COVID-19
    • For commercial tenants – reduction in turnover of 30% or more
    • For residential tenants – reduction in household income of 25% or more
  • The landlord reduced the rent of the affected for any period between 1 April 2020 and 30 September 2020, and for 2020, the landlord has land tax attributable to the parcel of the land leased.

If the landlord meets the above criteria, they will be eligible to receive a reduction. The reduction will be the lesser of, the amount of rent reduction provided to a tenant for the period between 1 April 2020 and 30 September 2020 OR 25% of the land tax attributable to the parcel of land leased to the tenant. Furthermore, if a landlord receives a reduction under this program, they will also be able to have their outstanding land tax payments deferred for up to three months.

Six-Month Moratorium on Residential Tenancy Evictions During COVID-19

As previously discussed, in March, Prime Minister Scott Morrison announced that the National Cabinet had agreed to a six month-moratorium for evictions for residential and commercial tenancies impacted by COVID-19. However, like a number of Coronavirus regulations, it was necessary for individual State governments to legislate such provisions in order for them to become effective. On 15 April 2020, the NSW Government amended the Residential Tenancies Act 2010, introducing a 60-day ban and a further six-months of restrictions on evicting tenants financially impacted by COVID-19. In order to meet the requirements for a 60 day stop on evictions and the longer six-month restrictions a household must demonstrate that they are impacted by COVID-19. A household will have been impacted if:

  1. One or more rent-paying members of a household have lost employment or income due to COVID-19 closure of business or stand downs; or
  2. One or more rent-paying members of a household have had to stop working or reduce work hours due to illness with COVID-19 or due to COVID-19 carer responsibilities; AND
  3. The above factors have resulted in a reduced household income that is reduced by 25% or more.

If you would like to find out more please click here.

JobKeeper Payments

The Coronavirus Economic Response Package (Payments and Benefits) Bill 2020 (Cth) was assented to on 8 April 2020 and will introduce a $1500 per fortnight JobKeeper payment for each employee in order to support business and encourage them to retain employees. The scheme operates from 30 March until 27 September 2020 and is divided into fortnightly periods. The payments are intended to subsidise wages for full-time, part-time and casual employees (will only cover casual employees if  they have been employed on a regular basis for over 12 months) that were employed on or  before 1 March 2020. The JobKeeper payments will also include employees who have subsequently been stood down. Businesses will be eligible to receive JobKeeper payments insofar as:

  • The business has a turnover of less than $1 billion and suffers a 30% drop in turnover for at least a month; or
  • The business ha a turnover of more than $1 billion and suffers a 50% drop in turnover for at least a month
  • Registered charities will be eligible for the program if they have suffered a 15% loss in their turnover.

It is important to note that the JobKeeper payment is subject to a wages condition. This means that the JobKeeper payment is a reimbursement of amounts already paid to an employee during a fortnight during the operation of the scheme. As a result, employers will only be entitled to receive the reimbursement if the employer has already paid at least $1500 per fortnight including salary, wages, commission, bonus’, allowances, PAYG withholding and superannuation contributions made by way of salary sacrifice. To learn more about the scheme please click here.

NSW Planning Minister Confirms Extended Construction Work Hours

Those involved in construction work in NSW, can take advantage of relaxed restrictions implemented under new COVID-19 measures. On March 31 2020, the Minister for Planning and Public Spaces released the Environmental Planning and Assessment (COVID-19 Development – Construction Work Days) Order 2020 in an attempt to assist social distancing measures by extending construction work over increased work days. The Orders override conditions of a development of consent under the Environmental Planning and Assessment Act 1979 which restricts building or construction work on Saturdays, Sundays or Public Holidays. However, the Orders do not apply to the approval for activity pursuant to Part 5 of the EP&A Act, which refers to activity carried out by public authorities.

Temporary Changes to Foreign Investment Rules in Australia

Changes to Australia’s foreign investment framework became effective on 29 March 2020. If you are an interested party to transactions involving foreign investors, theses changes have the potential to impact you and your business. The main changes to foreign transactions include:

  1. No monetary threshold – this means that, regardless of the value of the transaction, all proposed foreign investments subject to the Foreign Acquisitions Takeovers Act 1975 will require approval.
  2. Increased Review Periods – the timeframe for reviewing existing and new applications has been extended from 30 days to 6 months. However, FIRB advises that they will prioritise urgent investments that support Australian businesses and jobs.

If you were party to an agreement that was entered into prior to 29 March 2020 but the acquisition has not occurred then insofar as the value of the transaction was below the threshold at the time of the agreement, the changes will not affect the acquisition. Furthermore, if the agreement already required FIRB approval, then it may take longer than initially expected for the application to be approved.

The Federal Treasurer has confirmed that these changes are only temporary and will remain in place for duration of the COVID-19 pandemic.