Buying Property "Off the Plan"

Buying an “Off the Plan” property simply means buying a house, unit or apartment before it has been constructed. In recent times there has been a huge increase in the number of “Off the Plan” purchases due to skyrocketing numbers of apartments being built in Australia’s capital cities, combined with a favorable tax environment when buying “Off the Plan” as compared to purchasing an already completed dwelling. Part 1 of this article will deal with the risks of purchasing a property “Off the Plan,” while Part 2 will focus on some of the advantages of doing so.  So what are the major risks of buying “Off the Plan” and what should you do if you want to move forward with this option?

The risks when buying ‘Off the Plan”

There are a number of significant risks that are taken on by the purchaser when buying property “Off the Plan.” These include:

• The final product is unknown. Despite the substantial detail that is usually contained within an “Off the Plan” sales contract, there is still a large degree of ambiguity surrounding precisely what the finished property will be like. Some of this ambiguity is born out of necessity (ie. flexibility to change certain aspects of the design in the event of a local council rejecting some features of the property,) while on other occasions purchasers may simply be disappointed by the quality of the fixtures and fittings within the property or they are not how the purchasers imagined they would be.

• There is potential for large delays. Anyone who has had involvement in the construction of property will know that it can often be subject to lengthy delays, due to the complexity of the projects and large amount of parties and stakeholders involved. As a purchaser of a property “Off the Plan,” the exact date that the property will be completed can vary across years. Compounding this issue, the balance of the purchase price (ie. the full price less the deposit) becomes due once the property is completed. Changing market conditions including lending practices, property prices and the legal landscape can all contribute to a situation in which quickly acquiring the necessary finance for the property may be difficult.

• The developer may go bankrupt. With an “Off the Plan” property, the developer is usually incurring huge costs without the possibility of recouping them for many years. If unexpected delays occur, there is a very real possibility that the project could fall through altogether, putting the purchasers’ deposit (and time) at risk.

• Complex contracts. Due to the level of detail that is required in an “Off the Plan” sales contract, the contracts can often be extremely complicated and voluminous. This complexity can often create a situation in which the average buyer may overlook crucial clauses regarding the treatment of defects in the property, cancellation of the contract or rights of the owners after completion, which may be buried deep within the fine print.

• Subdivided lots. In the case of purchasing a property from a subdivided apartment complex, Issues often arise in which purchasers are not fully aware of their rights as compared to other Lot owners in the same development (ie. exclusive use of some common areas only for certain Lot owners or unequal voting rights at Owners Corporation meetings.) Most people would assume that they have equal rights in making decisions and using common facilities, but unfortunately this is not always the case.

Conclusion

As can be seen above, the devil is in the detail when it comes to purchasing property “Off the Plan.” Buying “Off the Plan” has some significant disadvantages compared to a traditional purchase of a completed dwelling. While it is impossible to mitigate all of the risks when purchasing “Off the Plan,” seeking legal advice before signing a contract is an essential step in minimizing the risks that you are exposed to. Nevertheless, buying “Off the Plan” does also present some advantages as compared to the traditional method of purchasing property; these will be discussed in the second part of this article. If you are considering purchasing a property “Off the Plan”, or have any questions about this article, please get in contact with us on 03 8877 6888.

Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice.

How can a will be challenged?

In Parts 1 and 2 of this article we discussed the vital importance of making a will, and some of the key information that you may wish to include in your will. In Part 3, we will be exploring some of the most common ways that a will may be challenged, with a particular focus on recent legislative changes to what are known as Part IV applications.

How can a will be challenged?

There are two differing ways in which wills are usually challenged. Firstly, it can be argued that the will is not valid. If this is the case, it is usually for one of the following reasons:

• The deceased party was unduly influenced by another party when making their will;
• The deceased party didn’t sign their will;
• The will was tampered with or not executed properly;
• The deceased did not have the mental capacity to understand their will;
• The deceased did not know the contents of their will;
• There was a subsequent will made that invalidated the first or a dispute as to which is the most current will.

While popular culture suggests most will challenges fall under one of the above categories, as with many things that you see on television or read in a novel, this is actually a misrepresentation of the reality. The vast majority of challenges to a deceased individual’s will are made under what is known as a ‘Testator’s Family Maintenance’ claim (or a Part IV application). This generally occurs when when the will itself is valid, but an individual who believes they were dependent upon the deceased party (before their death) then claims that they have not been provided adequate provision under the will, and seeks a greater share of the estate.

Testator’s Family Maintenance claims

Until recently, Part IV of the Administration & Probate Act 1958 (Vic) was the sole legislation that governed the process by which an individual could effectively appeal against their share of assets (or lack thereof) under a will. By pursuing a ‘Testator’s Family Maintenance’ claim, the claimant can apply to have the Court grant them a greater share of the assets from the estate. The legislation was roundly criticized for being too broad in scope, allowing anyone to make a claim that could show the deceased individual had “a responsibility to provide for his or her maintenance and support.” This meant that cousins, siblings, friends, parents and even nieces and nephews could all challenge for a greater share of the estate. Due to the legislation not being targeted towards any particular class of individuals, there were a large number of frivolous claims by fringe relations of the deceased. This had the effect of clogging up the Courts with Part IV applications, and also had a detrimental effect on the intended beneficiaries to the estate, as considerable chunks from the asset pool were eaten away by legal proceedings.

In order to address this issue (among others), the Justice Legislation (Succession and Surrogacy) Act 2014 (Vic) was drafted and brought into operation in 2015. Under the new legislation, only the following claimants may bring a Testator’s Family Maintenance claim:

• A domestic partner or spouse of the deceased at the time of the deceased’s death; or
• A child (including adopted or step child) of the deceased, if they-
  • Are under 18 years of age;
  • Have a disability;
  • Are between 18 and 25 and studying full-time; or
• A spouse or domestic partner of a child of the deceased; or
• A former spouse or domestic partner of the deceased (if a property settlement has not been reached at the time of death); or
• A grandchild of the deceased; or
• A member of the household of the deceased (including in the past or would have been in the near future); or
• A registered caring partner of the deceased; or
• A person who has been treated as (and believed they were) a natural child of the deceased.

As can be seen from this list, there are still a substantial number of categories in which one may apply for further provision under a Testator’s Family Maintenance claim, but the more restrictive nature of the updated legislation has resulted in less frivolous claims being pursued. Furthermore, the new legislation included some additional factors that may be considered by the Court when deciding a Testator’s Maintenance Claim.

The factors that will be considered by the Court in considering a TFM claim

Whether or not the Court will find that the deceased had a ‘responsibility’ to provide for the claimant is subject to a number of factors, including:

• Whether the deceased had a moral duty to provide for the claimant. This takes into account the contents of the deceased’s will, past interaction between the claimant and the deceased, and any other evidence regarding the deceased’s intentions of provision for the claimant;
• Whether the estate has already made adequate provision for the claimant;
• Whether the claimant is capable of providing for himself or herself;
• The effect the claim will have on other beneficiaries under the will.

Ultimately, while the Court usually follows the above considerations, it should be noted that the updated legislation has also allowed for complete discretion on how much weight (if any) the Court places upon any of the above factors.

Do the recent changes to the law apply to my will?

The changes to Testator’s Family Maintenance claims came into effect on 1 January 2015. Accordingly, the TFM provisions apply to every individual who dies after this date.

Conclusion

The recent updates to the legislation governing Part IV applications have served to limit the classes of people that can make a Testator’s Family Maintenance claim, but have given the Court a wider discretion to weight the factors they deem of importance in determining a claim. Therefore, it is of particular importance that individuals creating a will keep in mind how these laws are intended to operate, particularly in the event that an individual is considering leaving someone out of their will that would fall into one of the classes detailed above. It is also increases the importance of including as much detail as possible in an individual’s will with regard to his or her reasoning (ie, why they are choosing to leave more of their estate to one child rather than another.)

If you would like to make a will, feel you have been underprovided for in a will, would like to make a Testator’s Family Maintenance claim or have any questions about this article, please get in contact with us on 03 8877 6888. 

To read Part 1 of this article for more general information about why it is essential to have a will, click http://www.mahons.com.au/news/2016/5/11/wills-part-1

To read Part 2 of this article for some guidance on what should be included in a will, click http://www.mahons.com.au/news/2016/5/12/what-information-do-i-need-to-put-into-my-will 

Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice.

What information do I need to put into my will?

In Part 1 of this article we discussed the vital importance of making a will, and the potentially inequitable repercussions for your loved ones if you fail to do so. In this part, we will be discussing some of the key information that you may wish to include in your will, as well as some commonly problematic areas that occur when writing a will.

As discussed previously, your will describes how you wish for your estate to be distributed when you die. The executor then takes your will to the Probate Office who determines whether or not they will accept the will. If the will is accepted, the executor can then begin to deal with your estate as per your wishes. The ramifications of your will being rejected can be huge, with the potential for enormous legal costs that will eat away significant amounts of your estate. Accordingly, as you will no longer be around to clarify any ambiguities or errors in your will if a problem is found, it is essential that your will is as specific, accurate and current as possible when you pass away. While it is not mandatory to enlist the help of a lawyer for writing a will (you may do it yourself,) the requirement for certain formalities to be adhered to, as well as the level of detail that is required, mean that it is a risky proposition to ever use a DIY will kit.

What possessions can I put into my will?

Broadly speaking, nearly anything that you own can be put into a will. This includes:

-                Money;

-                Particular chattels (such as paintings, books or furniture);

-                Real property (land). The exception to this is if you own land as a joint tenant with another. In this circumstance, your interest in the land will be automatically transferred to the remaining owner;

-                Motor vehicles;

-                Shares in a company;

-                Everything else (which is not expressly stated in the will); and

-                The guardianship of your children.

It is important to note that superannuation cannot be bequeathed under a will. You need to get into contact with your super provider in order to determine who will receive your super upon your death.

Who can receive gifts under my will?

You have a wide discretion to leave gifts under your will to whomever you choose. This can include dependents, distant relatives, charities, friends and non-for-profit organisations. Some things to keep in mind while you are considering the distribution of your estate include:

-                If any particular party is left out of the will when it would be expected they would receive a share of your assets (ie. a child or spouse,) it is essential to declare the reasons for leaving them out;

-                Ensuring your dependents are left enough to survive on. If you do not leave them enough, they may take legal action to claim more of your assets;

-                Assets that are left to an individual under the age of 18 must be held in trust until they turn 18, unless the assets are used for their benefit (such as their education.)

What about my debts?

Unfortunately, when you die your assets are not the only things that you leave behind. Any unpaid debts that may be attributed to you will need to be paid from your estate. Often it is advisable to include a clause into your will that states you wish for your unpaid debts to be paid from the estate before your assets are distributed. This ensures that your assets remain unencumbered when the beneficiaries of your will inherit them.

Conclusion

An invalid will may create disastrous and damaging circumstances for the loved ones of a deceased person. The most failsafe way to create a watertight will is to have a lawyer prepare one for you, in strict accordance with your wishes. This can ensure that you have peace of mind regarding the management of your estate after your death. Part 3 of this article will discuss some of the most recent changes to the legal landscape around challenging a will. If you would like to make a will or have any questions about this article, please get in contact with us on 03 8877 6888.

To read Part 1 of this article for more general information about why it is essential to have a will, click http://www.mahons.com.au/news/2016/5/11/wills-part-1

Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice.

Why You Need to Make a Will and Keep it Updated

Most people are uncomfortable planning for the inevitable end to their lives. Perhaps this goes some way to explaining why many individuals never create a will, causing further anguish and difficulty for their families when they pass away, despite the relative ease of making one. This article details the importance of creating a will and the occasions that it should be updated, while Part 2 will focus on some important information that you should include in your will for it to be valid.

A will is a legal document that distributes your assets (your estate) to your beneficiaries when you die. Any person over the age of 18 and with the mental capacity to understand their actions can make a will. Your will also appoints an executor, the person who manages your estate (and distributes your assets) when you die. An executor can be anyone, from a lawyer, to an accountant, to a close family friend. However, due to the amount of power that the executor is given to manage your estate, it is important to choose somebody that you trust and believe will do a competent job.

What if I don’t have a will?

If you choose not to make a will, your assets will be distributed according to a formula set out by the law, which may not reflect the distribution you would have chosen. Other disadvantages of not making your own will include:

·       Partners, stepchildren and charities may not receive anything.

·       You have no control over who will be the guardian of your children.

·       Your estate may not be handled in the most tax-advantageous way.

·       The family home may need to be sold in order to provide for your children.

If you wish to retain control of what happens to your assets when you die, it is essential to create a will.

When should I update my will?

Generally speaking, it is a good idea to review your will any time there is a change in the circumstances around any of the parties named in your will (beneficiaries or executors). This will ensure that there is no ambiguity surrounded how your will should be administered, or what should be done with certain assets (ie, if a beneficiary passes away before you). In particular, you should update your will if:

·       You get married. A will made prior to a marriage is no longer valid after the marriage.

·       You are separated from your spouse (but not divorced.) Any gifts under your will will not be revoked if you are merely separated. Accordingly, if you wish to remove your spouse from your will before your divorce, you need to create a new will.

·       You are divorced. While any gifts under a previous will are automatically revoked when you get divorced, you should still update your will by redistributing those gifts to different beneficiaries. This minimizes chance of a challenge to your will.

Conclusion

Creating a will is essential if you wish to control how you provide for your family and friends when you die. However, there are many strict legal requirements that must be followed in order for your will to be valid. Part 2 of this article will discuss some of the important considerations and requirements that you should contemplate when making your will. If you would like to make a will or have any questions about this article, please get in contact with us on 03 8877 6888.

To read Part 2 of this article, which includes some important information that you should consider including into your will, click http://www.mahons.com.au/news/2016/5/12/what-information-do-i-need-to-put-into-my-will

Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice.

Update on Sexting Laws in Victoria

Modern technology has revolutionised the way that we communicate with one another. The ability to stay connected through the internet, share moments and experiences through phones, and reach a wide variety of people instantaneously are but a few of the benefits of technology. However with this increased freedom to communicate, individuals are also exposed to far greater risks. Sending an explicit picture or video (‘sexting’) with another person may now be saved and shared with others. This has created problems that the law never anticipated, as has the prevalence of people under 18 using mobile technology to sext. Until recently the law in Victoria had not caught up with the rapid rise of technology, but recent changes have addressed some of the common scenarios that arise.

Generally speaking, there is no illegal activity when consenting adults share intimate, explicit or pornographic images of themselves with one another. However, if one of the parties is under 18 years of age, or the image(s) are then shared with other people without the consent of the sender, the law has been broken.

Child pornography law in Victoria

Under Victorian law, you can be charged with the possession of child pornography if you have received an explicit or indecent image of a person less than 18 years of age, and may be charged with producing child pornography if you have taken the image of the minor yourself. Individuals found guilty of these offences can face up to 5 years imprisonment for possessing child pornography, or 10 years for producing it. Under the law previously, individuals under 18 could be found guilty of these offences (even if the images were of themselves), which also included mandatory placement on the sexual offenders register. This had dire effects on individual's employment prospects, as well as their ability to have contact with children in the future. To tackle this inequity, recent updates to the law have provided the following exceptions.

You will not be prosecuted for child pornography if:

·       The images are of yourself; or

·       You are under 18 years of age and the person(s) in the image is no more than 2 years younger than you.

Individuals under 18 years of age may now also avoid being placed on the sexual offenders register, although it is left to the discretion of the judge. Individuals 18 years of age or older who are found guilty of a child pornography offence must be placed on the register.

Unauthorised sharing of explicit images, or ‘revenge porn.’

Recent cases in courtrooms across Australia have shed light on the common practice of individuals intentionally sharing explicit images that they have been sent by someone with other people, without the consent of the original sender. This often (but not exclusively) occurs when a relationship breaks down and is used as a way to punish or humiliate the other party. Unauthorised sharing may include:

·       Sending or transmitting the image to someone else; or

·       Exhibiting the image; or

·       Making the image available for access to others (ie. posting the image online.)

The penalty for sharing an explicit image of another without their consent carries a maximum penalty of 2 years imprisonment. A maximum of 1 year imprisonment may be imposed for threatening to share an explicit image that has been received.

Conclusion

Technology has provided us with a fantastic means of improving our lives, connectedness, and ability to share information. However, it has also put our privacy at risk in a way that it has never before. If any of this information applies to you or your current situation, please get in contact with us on 03 8877 6888.

Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice.