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Options in leases often require that a tenant notify the landlord they wish to remain in the property within a certain period of time, but in the recent case of Tripple A Pty Ltd v WIN Television Qld Pty Ltd [2018] the court was asked to examine what occurs when an option is purportedly exercised after this time period has expired.

In this case, the tenants had not given notice of their intention to take up the option within the required time period, but instead began talks with the landlord a week after its expiry. When a dispute arose about the price of rent, the tenant argued that the landlord had waived the option period requirement by engaging in correspondence about the option and the rent payable despite the fact that the option had expired. The Court of Appeal rejected this argument, and found that the correspondence in fact meant a new lease agreement had been entered into which should reflect the current market rent, rather than being informally exercised as an extension of the old lease with the same rent.

Construction disputes often arise when one party believes the work is not completed to the expected standard, which raises the question of what ‘completion’ in a construction contract really means. The court had to determine this matter in the case of Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184, in which Cordon’s construction had numerous defects but was substantially completed.  After terminating the contract, the parties both sued for their resulting damages. Much of the court’s decision turned on the definition of ‘completion’ as there was no definition within the contract. The court ultimately found that completion must mean ‘full completion’ rather than practical or substantial completion, and that Cordon’s work was in breach of the contract.

With the NSW government recently voting to allow residential leases to be signed and witnessed electronically, it is important to highlight the situations in which an electronic signature may not be valid. This was recently discussed in the case of Williams Group Australia v Crocker [2016] NSWCA 265, where a Director of a building Company used the electronic signature of his partners to secure credit in their names. When a debt of nearly $890,000 was not paid back, the lending company claimed the debt from each of the directors personally. Ultimately this case turned on whether the partners had given any representation that authorised the use of their signature. Crocker, one of the partners, had made no such representation and so ultimately was not held to be liable for the debt.

In the recent case of Re: Zhang [2018] VSC 721, the Victorian Supreme Court was asked to assess whether a covenant prohibiting advertising on a residential property applied to real estate signage. In this case, the covenant stated that ‘no hoarding for advertisement purposes shall be erected on the said lot hereby transferred,’ which Derham AJ stated seems to literally prevent any form of advertising on the property, including real estate signage.

However His Honour highlighted the importance of context in this case, namely that the land was a residential property in a residential neighbourhood, as the purpose of the restriction was not to prevent real estate signage but to prohibit commercial advertisements that were ‘unconnected with the residential character of the land.’ Therefore it was ultimately found real estate signage was not prohibited under the covenant.

In the recent case of McFarland v Gertos [2018] NSWSC 1629, the NSW Supreme Court awarded the title of a $1.6 million home to a property developer who took possession of the vacant house in 1998. Mr Gertos was found to be entitled to the home under the law of adverse possession, which allows for the extinguishment of ‘documentary’ title where a person has actual possession of a property, an intention to possess the property and continuously possesses the property for the limitation period of 12 years.

In this case, the property had been abandoned since 1948 when the registered owner died, and his family were unaware of their rights until 2017. In the meantime, Gertos had performed renovations and leased the property throughout the 20 year period since he discovered the house, before applying to the Registrar-General for title. This was sufficient evidence for the court to hold that Gertos had the right to possessory title of the property.

The NSW government has announced plans to reform stamp duty taxes in the state, by indexing stamp duty brackets to the Consumer Price Index from 1 July 2019. This reform will be the first since 1986, and seeks to address the ‘bracket creep’ currently happening in NSW. This change will only affect residential property transactions.

The NSW government has passed the Conveyancing Legislation Amendment Act 2018, which will allow residential tenancy agreements to be signed and witnessed electronically. The Act is an important modernisation of the previous regulations, that will simplify leasing for agents, landlords and tenants. The government is also proposing that other forms of leases will be available electronically as early as next year, including surrender of lease and variation of lease. 

The NSW Court of Appeal has confirmed a decision that held a real estate agent was not liable for misleading and deceptive conduct after representing to a client that she would have private parking on a property sold to her in 2015. Hyder v McGrath Sales Pty Ltd [2018] NSWCA 223 concerned the purchase of a $9.4 million residential property by Ms Hyder, who believed a representation made by a real estate agent that she would have private parking at the property. However, the property was a battle axe lot that shared a driveway, meaning the appellant would not have exclusive parking rights.

While the Court ultimately found that the real estate agent had made a misrepresentation under s18 of the Australian Consumer Law, they were not convinced that Hyder suffered any loss as a result of it. They stated that there was no evidence to suggest that had Hyder known the true nature of the parking arrangements, her decision to purchase the property would have been affected.

In the recent case of Scanlon v McLeay [2018] QDC 17 the court has highlighted that contributions to another person’s mortgage or purchase of property does not automatically give rise to a legal right in that property. In this case, the applicant sought equitable relief for the contributions she had made towards the property of her former partner, namely $49,000 towards a deposit for the property and $86,000 worth of ‘general contributions’ to the mortgage account.

While the respondent strongly argued that all of the payments were a gift, the court ultimately found that the deposit contribution did entitle her to an interest in the property by way of a trust of $49,000. However, the court took the opposite view on the more substantial contributions towards the mortgage, holding that these contributions were given for the applicant and her daughters to live at the property.

The Federal Court has handed down $18 million in penalties to We Buy Houses Pty Ltd (WBH) and its principal Richard Otton after they published a book and held a series of seminars that led consumers to believe they could buy a house for $1. In ACCC v We Buy Houses Pty Ltd (No 2) [2018] FCA 1748 the court found WBH had breached s18 of the Australian Consumer Law through a series of misleading representations in their book and seminars, including that consumers could buy a house and build a property portfolio without a loan, without using their own money, and without any real estate experience. WBH made $20 million off of these products from 2011-2014, but will now face almost as much in penalties for the misleading conduct, with WBH ordered to pay $12 million and Otton to pay $6 million for the breach.