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JULY 2015 Vol 21, No.2
FORWARD THINKING
President’s Report The year just seems to be flying, June 30 has come and gone again and I trust you all managed to get through the usual chaos in the lead up to the end of the financial year.
this
issue ...
President’s Report
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Fees
Chief Executive Officer’s Report
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As you are all aware the Land Titles Office increases their fees each year as at 1 July. At the end of each financial year I take the opportunity to review the fees our office charges for the services we provide. I would also encourage all of you to conduct a similar review of your fees, every year everything seems to go up, if you are leasing your premises your lease more than likely would have an annual rent review in the lease, you may want to reward valuable staff by reviewing their salary and giving them a pay rise. It all costs money, and I believe it is much easier to review your fees annually to determine if a slight increase in fees is required. Reviewing your fees each year rather than let it go for a number of years and then trying to bring your fees up to a higher level in one large hit. Remember, you are a Professional and offer a Professional service.
Are you undervaluing your work when quoting conveyancing fees? 7 5 Things to Check Before you Enter a Joint Venture or Alliance with a Business 10 Transfer of Risk: Why Title Insurance Is Good Risk Management 12 Q&A with Norm Duncan
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Is there is a difference between taking ‘Reasonable Steps’ and reaching ‘Safe Harbour’? 16 Property values rise as volumes remain level 18 FORWARD THINKING – Plan ahead to ease money stress 20 Advising a client about paying default interest 21 AICSA CONFERENCE 2015
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Photos From Professional Development Sessions
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Why you should be using LinkedIn 26 Hiring Decisions - Contractor Vs Employee 29 Article from The Vault - Is a Form 1 required to be served on an Assignee of a Contract? 30 Disclaimer 31
The Institute is proud to support HeartKids SA
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The New CEO Our new CEO Rebecca Hayes has settled into her position well and the transition between Geoffrey Adam and Rebecca has gone smoothly. Rebecca has fitted in well with the staff of AICSA and we are fortunate to have a great group of people working for us. The selection process for the new CEO was very time consuming
Tim O’Halloran
as we wanted to make sure we secured the right person for the position and I believe we secured the best candidate and I am confident Rebecca will fit the role well. I would like to thank the selection panel, Vice president Kathy Stolinski and Councillors Brad Eckermann and Ben De Palma and Registrar General Brenton Pike for giving up their valuable time and sitting on the selection panel with me. AGM AICSA’s Annual General Meeting will be on us before we know it. There are a number of Councillor’s due to retire and I would implore Members who have not served on Council to consider nominating for the position of a Councillor. The Conveyancing profession is going through a huge change and by representing your fellow Members on Council it is a great opportunity for you to contribute to the profession for the betterment of all Members. Serving on Council can be very rewarding and we have a great team working for us and you will receive plenty of support
President’s Report from your fellow Councillors and the staff. Alternatively you may wish to nominate yourself as a member on one of our committees and contribute to the Profession through a committee.
I would be happy to chat to anyone considering nominating for Council or as a member of a committee and address any questions or concerns you may have. Tim O’Halloran
Chief Executive Officer’s Report It is with some trepidation that I write my first CEO’s Report for the SA Conveyancer Magazine. As I start to compose I reflect on my first 8 weeks in the role – so much is happening, so many changes, projects, unrealized potential. My mind swarms with information and bristles with excitement!
(Business Manager), Karen (Membership), Megan (Professional Development), Ashley (Marketing & Communications) and Janette (Finance/ Administration). What a positive and focused group, I consider myself very lucky to be working alongside them all to provide for our members. So, a little about me…
Rebecca Hayes
Over the past few weeks I have had the opportunity to catch up with old friends and meet many new ones. It is wonderful to see the familiar faces and know that such a wealth of knowledge and experience is here in South Australia. Retention of this knowledge is so very important and will be a big focus of my first couple of years in the CEO’s chair. Sharing this knowledge will also be a focus and I look forward to speaking with you about the opportunities to enable this over the coming months. Driving the profile of the AICSA is another priority and I will be steering a strong communications and engagement strategy across government, media and the public. I am very excited about the opportunities available to us.
I am married to Rob and we have two beautiful children, William 7 and Eloise 2. We also have 2 dogs: Rommel and Bonnie. I have a background in conveyancing, having practiced for approximately 10 years in South Australia and Darwin. Whilst living in Darwin I completed my Bachelor of Laws and entered the public service. I have held a number of positions in government dealing in legal rights and legislative policy work relating to native title and aboriginal land rights, mining titles and aquaculture. Most recently I held positions within SA’s Consumer and Business Services specialising in property related legislation amongst other varied opportunities. I have never ventured far from my foundations, tenure and rights in tenure have always held an interest and as I look back I can see a distinct pattern emerging!
Before I go any further, I must acknowledge the support and work of the staff in the AICSA office. I am extremely lucky to have Geoffrey Adam remain with the AICSA. Not only is the profession, nationally, privileged to have his input into the e-conveyancing reforms, we as conveyancers in South Australia are significantly better off for the work, support and advocacy Geoffrey has provided during his time as CEO. I must also mention the incredible people I am now working with; Glenys
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Chief Executive Officer’s Report A few quick updates. AICSA Conference The Conference will be held on Saturday 22 August 2015 at the Hahndorf Resort. The program is packed full of great sessions that are not worth missing – check out the program for more details. Make it a weekend ‘getaway’ and stay for the amazing conference dinner at Maximilians and follow it up on Sunday with a bit of Adelaide Hills wine tasting! (I know I will). We have secured Mick Colliss as our speaker at dinner and if you don’t know who he is, then you are truly in for a treat. I am really excited about the conference and can’t wait to spend time with you all and sharpen up on some of my rusty conveyancing knowledge! Priority Notices Lodgment of Priority Notices commenced from 27 April 2015. To date over 80 priority notices have been lodged with the LTO. Whilst they are optional, Priority Notices provide a layer of security for transacting parties, particularly once the paper and electronic alignment occurs. The use of a Priority Notice for all transactions is a good practice to start. The Priority Notice must clearly identify the transaction to which the Notice applies and will give priority to that transaction except in special circumstances like the Notice expires, is withdrawn or the dealing relates to prescribed interests (eg caveat. lien, warrant, application to note death, etc.). ARNECC ARNECC held an Industry Forum in Melbourne on 15 June to discuss the responses to the consultation draft of the MPR version 3 and the Guidance Notes. The final documents will be published after considering the responses to the Forum and ARNECC has indicated that
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this version will be in place for at least a year. AICSA and AIC National attended and both have previously provided submissions. It was a very interesting and worthwhile meeting with ARNECC representatives taking on the feedback and agreeing to address the key concerns. Australia Post Australia Post’s version 3.0 of its Referral Agreement has largely dealt with the major objections AICSA had to its earlier draft. The limitation of claims to the conveyancer’s direct loss has been removed. However, whilst the acceptance of other aspects of liability is not satisfactory, it reflects the minimum requirements of the MPR. Under the Referral Agreement 3.0, Australia Post’s liability is limited to the extent of the professional indemnity insurance that it is required to hold. The conveyancer picks up the liability that Australia Post does not. Under the Agreement, Australia Post accepts liability for a claim to a maximum of $1.5 million subject always to two
Chief Executive Officer’s Report caps that may reduce Australia Post’s liability to zero: This is because Australia Post is not liable for any claim to the extent that: • the total VOI claims by the conveyancer in the same calendar year exceed $5.0 million; and/or • the total VOI claims in Australia against Australia Post in the same calendar year exceed $20.0 million. Whilst other VOI service providers may not limit their liability in that way, a conveyancer will only be able to recover above the PII limits to the extent of the Provider’s assets. AICSA is comfortable with the new agreement addresses, at least to some extent, our previous major objections. Australia Post will be re-launching its service soon and Members who previously signed up to the service should ensure that they enter into the Referral Agreement version 3.0. Australia Post provides an alternative where neither a conveyancer nor another Provider is available. Electronic Conveyancing E-conveyancing brings many challenges to the conveyancing profession. We at the AICSA are cognizant of the concerns held by many and we are working with government to provide a targeted and through education program on the forthcoming reforms. With e-conveyancing touted to commence in South Australia in April 2016, the AICSA will ensure that you are provided with the opportunity to attend seminars in the lead up to the transition; with Q&A sessions to follow implementation. Further details will be provided as soon as available. I personally find e-conveyancing to be very exciting and it is something I readily sought during my years in practice. E-conveyancing will fundamentally change the scope of conveyancing; however we must be grateful that SA is way ahead of other jurisdictions in terms
of alignment. This will make the transition far smoother for SA’s practitioners and clients alike. In preparing the AICSA’s submission for funding of an EC education program, I put together a few statistics that I thought may interest you: • There are currently 590 individuals and 70 companies registered as conveyancers in South Australia. • In South Australia, registered conveyancers perform or supervise more than 90% of all transactions lodged with the Land Titles Office (LTO). This is a significantly higher proportion than licensed conveyancers interstate. • The total consideration in Australian dollars for property transfers lodged LTO from March 2014 to March 2015 was $18,894,933,186 making the economic contribution of property transactions significant (represented by the lodgment of 51,268 transfers during this period). • The South Australian Treasury has budgeted revenue income from conveyances at $925 million for the 2014/15 financial year. Conveyance duty is significant (around 22 per cent of total tax revenue). The stamp duty paid on purchases of residential properties accounts for about three quarters of conveyance duty revenues. These statistics are significant and demonstrate the value of the conveyancing profession to the state. It should also be recognized that the value is provided by only a handful of individuals and their employees – that’s pretty amazing! Don’t ever undervalue how important the conveyancing profession is, you are specialists in a complex legal discipline and you should be proud of what you offer the people of South Australia.
I am privileged to be part of the South Australian conveyancing community once more, I cannot express how truly happy I am to be your CEO. I recently reread Susan Jeffers book
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Chief Executive Officer’s Report ‘Feel the fear and do it anyway’, I always
enjoy this read, it focuses me on positive decision making, it makes me appreciate that fear is natural, fear is good and fear makes us better people. When accepting the offer to be your CEO, the following sentence came to mind:
Saying yes means getting up and acting on your belief that you can create meaning and purpose in whatever life hands you. I am grateful that life has handed me this opportunity and look forward to working with you all. The conveyancing profession is very dear to me. It is important to me to see the profession continue to flourish in the challenges ahead and to prosper through innovation and opportunity. I consider conveyancers in South Australia are eminently talented and will continue to lead the profession nationally as we make the transition to electronic conveyancing together. I also consider there is so much that can be gained from embracing change. Enjoy the experience – I look forward to being a part of it with you. Rebecca Hayes
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Are you undervaluing your work when quoting conveyancing fees? Are you working to live…. or living to work? The conveyancing fees that you charge clients will decide which life you are living. A request by a prospective client to discount your conveyancing fees probably sounds like the following: “Your fees are too much! I just got a quote from Cheap Cheap Conveyancing down the road and they will do my purchase conveyance for $200 less than you! Why are you more expensive? Can’t you match their fee?” If you have not already done so, it is important to do some research and come up with some convincing points of difference between you and your competitors to combat such complaints and requests for fee discounts. AICSA has a telephone script that leads the inquirer away from the issue of price whilst details of the work are obtained and rapport is built. The conversation can then return to the fee quote. Conveyancers often give discounts when they may not have to. Sometimes I think we judge our prospective clients on what we perceive to be their ability to pay or what we think (or know) that our competitors are charging. It is tempting to give prospective clients a break when they are buying and selling a house given all the other costs that are involved in this process. When deciding on a conveyancer, some clients correctly focus on quality of service based on their past use of a particular conveyancer or based on a recommendation from a friend. However, many make the mistake in thinking that all conveyancers are the same, and that we all offer the same service, so the best way to decide on a conveyancer is to appoint the one offering the cheapest fee. By agreeing to charge discounted fees or match a competitor, what hidden message are you giving to prospective clients about the value of the work
that you do? Could it be that the prospective client is receiving a hidden message that you were attempting to “rip them off” when you gave your initial higher fee quote? Out of interest, I calculated what conveyancing fees could have been charged if I jumped into my time machine back to 1990 when we were able to charge the scheduled fees set out in the regulations to the Real Property Act 1886 and the results (set out below) surprised me. Purchase price:
Scheduled fee:
$425,000 –
$841
where conveyancer acts for purchaser/ transferee only:
(being $301 plus 0.135% per dollar of the consideration)
Sale price:
Scheduled fee:
$425,000 –
$744
where conveyancer (being $256 plus acts for vendor/ 0.115% per dollar of transferor only: the consideration)
Whilst I acknowledge that the above fees are calculated on the sale and purchase price which we are no longer able to do, how many of us today (some 25 years later) feel comfortable in quoting anything like the above fees as our “conveyancing fees” (i.e. not broken down into conveyancing fees + bank liaison fees + file administration fees or some other named fee to try and justify our conveyancing fees to prospective clients)?
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Are you undervaluing your work when quoting conveyancing fees? In retail sales of products, discounting is great for business turnover. However, discounting conveyancing fees may not only hurt the business that is fee discounting but also the conveyancing profession as a whole. Please consider the following: 1. Less revenue: by discounting either permanently or on a regular basis, a business must accept more conveyancing work to achieve a good profitable level of income. 2. Work overload and stress: as a result of the larger amount of conveyancing work required to achieve good profitability, the conveyancers in the business and valuable experienced support staff become overworked, stressed out and/or burnt out. 3. Staff turnover: staff resign as they are not able to cope with the work overload and stress levels. Proper retraining of new staff takes time that neither the principal of the business nor any employee/staff has to give. New staff cannot cope and also resign. 4. Poor service: high staff turnover and inexperienced and inadequately trained staff results in poor service to clients. 5. Client complaints and claims: clients become dissatisfied with poor service and make complaints, or even worse, a professional indemnity insurance claim. The discounted fee charged will likely not cover the time required to be spent by the business in the event of such a complaint or a claim. 6. Loss of clients: clients who are dissatisfied with the service provided will not return to the business as a client in the future, will not recommend the business to anyone else and will make negative comments to others. High turnover of staff has the effect that past clients who have developed a good rapport with a particular
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conveyancer or conveyancing clerk will not use the business in the future when they discover that staff member has left the firm. 7. Lack of market confidence: poor quality services affect market confidence in the conveyancing profession. Fee discounting may also affect you personally in respect of the salary/wage you can draw from your business, the holidays that you can take (or not), and the toll on your relationship (if you are in one) when you have to work too many late nights and weekends to keep up with the workload! Is the discounted fee that you are charging covering the time and money invested by you to gain your conveyancing qualification, the time and money spent on professional development, the cost of professional indemnity insurance, audit and licence fees, rent, staff wages and all other business overheads? Have you calculated the charge out rate that you should be charging each client (and do you charge that rate) to ensure that you are covering your costs and making a profit? Of course, there are times when giving a discount is valid: such as when you are acting for a friend, a person is genuinely in needy circumstances or where efficiencies are available, eg. through technology or multiple transactions. I challenge you to stop undervaluing your work by discounting conveyancing fees now so that all conveyancers may charge a reasonable fee to reflect the value of conveyancing work and the conveyancing profession as a whole. Fees, Risk and Damages The article “Fees Risk and Damages” written by our former CEO Geoffrey Adam for the SA Conveyancer (pg 6) in 2005 (with some minor amendments) mentions a survey that was undertaken in 2004 which indicated that it took (at that time) at least 5 hours to complete a very simple problem-free conveyance for a purchaser. As far as I have been able to ascertain, no industry-wide survey of the actual hours spent to complete an average conveyance has been undertaken since 2004.
Are you undervaluing your work when quoting conveyancing fees? However, the consensus amongst the conveyancers I have consulted with seems to be that the average conveyance now takes approximately 7 to 10 hours to complete. The number of hours is dependent upon the bank involved and other factors such as whether the conveyancer conducts verification of identity themselves or has appointed an agent to do so. If you are only charging $400 to $500 for a conveyance (excluding GST) and a conveyance takes 10 hours to complete, your hourly charge out rate for the entire business is $40 to $50 an hour plus GST. Is that charge out rate reasonable to cover your time and costs in the event that the client makes a professional indemnity insurance claim against you? Finally here are some more recent comments provided to me by Geoffrey Adam on the impact of discounting: • Say a conveyancer wants to preserve the same income and work a 40 hour week. If they discount fees by only 10%, they must work an extra 4.5 hours per week and do more than 11% more files: a discount of 20% requires working an extra 10 hours per week and 25% more files. More hours and more files means more risk. • A sole conveyancer who discounts their $500 fee by 10% and gets a PII claim will, best case scenario, need to do more than 11 extra files to cover the deductible excess and a firm will, best case scenario, need to do 22 extra files. However, that does not take into account any loading imposed in the future. Jenny Raymond Registered Conveyancer CPC Laity Morrow Level 1, 50 Pirie Street Adelaide SA 5000
[email protected] laitymorrow.com.au
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5 Things to Check Before you Enter a Joint Venture or Alliance with a Business Entering into any business alliance is a risk for you personally and for any business you are managing or representing. That’s why it is crucial that you take the proper steps to minimise that risk, or at least enter into any partnership with open eyes. If a joint venture is on the horizon for you, read on for an overview of things to know before signing those papers. 1. Know who you are working with Before you make a move, ensure you know exactly who you are making an agreement with, who you will be working with and who the prominent behind-the-scenes people are. Dealing with a friendly representative is all well and good, but you don’t want to find yourself committed to working directly with someone whose personality clashes with yours or whose tactics or reputation won’t be good for your business. 2. Learn the business’s history If you will be sharing resources with another entity, common sense dictates that you should know everything about their past. Have they struggled to hold senior staff? Are there any financial or legal hardships you should be aware of? It might feel like an overwhelming amount of research for you to undertake. GlobalX Legal Solutions can help you with software to carry out a company search and an ASIC search to get this information. Visit our website if you want to find out more about how they can help you. 3. Determine the terms of your agreement This is where things start getting interesting: contracts start getting sent around and it is vital that you hire a solicitor who handles business contracts to ensure everything is in order. Make sure you use this time to negotiate the terms and conditions of the venture. Be an advocate for yourself, because you know any other business entity will do their
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best to secure ideal terms for themselves as well. 4. Spell out which roles and responsibilities each party will fulfil While this may go hand-in-hand with the previous point, make sure everyone knows exactly what their role is. Set out expectations in a clear and concise manner, and ensure they are communicated to each relevant party. If you refuse to perform certain tasks, or want to be responsible for a certain aspect of a project, speak up before you enter. If you communicate clearly now, disagreements can be sorted out before the stresses of working together take over, and you can take the easy way out if resolutions cannot be reached. 5. What’s in it for you? This item could easily constitute points one through five in this article, because the key to any venture is to investigate the other party and negotiate conditions that suit you. If you can’t provide justification for your decision quickly and easily, it may be a good idea to carefully consider the question, “what’s in it for me?”. The benefit may be outright financial gain or something less concrete such as exposure to new markets or opportunity to get experience you wouldn’t otherwise be able to obtain. Ensure you feel the benefits are enough to make your joint venture or alliance worthwhile. Joint ventures and partnerships can be greatly beneficial to both parties if everyone communicates well and explores every aspect in detail. By engaging professional services to help you along the way, you add extra layers of security to your alliance or joint venture and help minimise the level of risk. The GlobalX Legal Solutions Team
STL-Cats_AU_protecting_SA_v5 1/23/14 1:53 PM Page 1
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Transfer of Risk: Why Title Insurance Is Good Risk Management Conveyancing can be a risky business. Statistics published by professional indemnity insurers for lawyers throughout Australia have consistently shown that conveyancing related claims account for a large proportion of claims made against lawyers in general practice by their clients. As licensed conveyancers specialise in conveyancing, and in many cases, do nothing else but conveyancing, then licensed conveyancers are potentially at risk of being sued by their clients for issues which arise from a conveyancing transaction. Accordingly, risk management has become a more integral part of modern conveyancing practice. An effective risk management strategy will incorporate risk mitigation controls to reduce the occurrence and consequence of risk. In this regard, simple but effective risk control measures would ordinarily include (but are not limited to): • Implementing settlement checklists, • Conducting regular staff training, • Utilising technology, such as conveyancing practice management systems and trust accounting systems • Keeping up to date with legislative changes and continuing legal/professional education • Maintaining membership with the South Australian Institute of Conveyancers • Maintaining professional indemnity insurance A robust risk management strategy will serve the dual objectives of ensuring client satisfaction and reducing the incidence of professional indemnity
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claims. However, does your risk management strategy include a component of risk transfer? Title Insurance as a Risk Management Tool One aspect of effective risk management is to transfer the risk from your business to another service provider. Specialised title insurers provide such a service by offering title insurance to your clients. Title insurance provides cover to your clients for many undisclosed and hidden title related defects, such as encroachments, non-compliance with easements and covenants, illegal building work and other transactional risks such as post-settlement dealing registrations by a third party. Transfer of Risk Whilst your professional indemnity insurance will cover you for any errors and omissions that you or your staff may make in the course of a conveyancing transaction, title insurance covers your client in relation to defects which cause them loss or damage but which are not necessarily the result of any negligence on the part of the conveyancer. Normally, your client would assume the risk of unknown and hidden title defects, such as unapproved building works, encroachments, noncompliance with covenants and other title related defects such as lack of legal access to and from the property. Title insurance allows a purchaser to transfer this risk to the title insurer.
Transfer of Risk: Why Title Insurance Is Good Risk Management Real Claims Example
land now formed part of the insured’s land.
Boundary Discrepancy – Defence of Title Cover
Title insurance covered all costs associated with the boundary realignment application.
Our insured purchased a residential property without obtaining a boundary survey of the property. It is not common practice for purchasers to obtain a survey report when buying a property, despite advice from their conveyancers that a survey report should be obtained or otherwise the purchaser should satisfy themselves that the physical boundaries of the property match the legal boundaries. The purchaser effectively assumed the risk of a boundary discrepancy but obtained a title insurance policy to cover that risk. The insured settled on the property and later decided to add an upstairs extension. During this process the insured discovered that part of the insured’s existing dwelling encroached onto the neighbour’s boundary. The encroachment was part of the house which was extended in 1991 subject to Council approval. The encroachment has been in existence in the current location for approximately 23 years and had been continuously occupied during that time. The insured was notified of the encroachment by the neighbour who objected to the insured’s development application to build the upstairs extension. The neighbour refused to consent to the encroachment and threatened to commence proceedings against the insured to remove the encroachment. The Claim Resolution:
The Be nefits of Title Insurance The above claim is a good example of the principle of “risk transfer” in action. Even though a purchaser assumes the risk of boundary encroachments by purchasing the property without a survey report, ultimately a purchaser may suffer a significant loss and may look to recover that loss from the parties to the transaction, including the conveyancer. This kind of litigation risk is becoming more and more of a concern as Australia becomes an increasingly litigious society. In the claim example above, the risk passed to the title insurer and so there was no need for the purchaser to look for third parties to cover the loss. The loss was covered under the purchaser’s title insurance policy on a “no fault basis”. Additionally, Stewart Title waives any rights or remedies or relief to which it becomes entitled by way of subrogation against conveyancers and lawyers, providing conveyancers and lawyers with peace of mind. Is your business protected? For more information, please contact Tori Hodgman, Business Development Manager, Stewart Title on 0402 446 279 or visit www.stewartau.com.
The title insurer was able to obtain independent legal advice and applied for a boundary realignment on behalf the insured. A senior property lawyer was engaged to act on behalf of the insured at no cost. The neighbour did not defend the boundary realignment application and the application was subsequently approved. The boundary encroachment was therefore rectified as the boundary was realigned in favour of our insured to cure the encroachment. That part of the land which formerly encroached upon the neighbour’s
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Q&A With Norm Duncan Norm Duncan was one of the founding fathers of the Land Brokers Society (what we now call AICSA), where he also served as its second President. His Conveyancing Career spanned over 35 years which was recognised with honorary life membership of the Australian Institute of Conveyancers in 1995. Below are his recollections.
When did you first get into Conveyancing (take the leap of faith)? I went straight from a salaried position at the SA Housing Trust to hang up my shingle, which was quite a big jump I can tell you - a lot a responsibility as I had a wife and a small child – to start my conveyancing business Norm Duncan & Associates around 1955. My wife at the time did not think it was very funny. Giving up the substance for the shadow as it were. Tell us about your Conveyancing Business? As mentioned I started Norm Duncan & Associates around 1955. My business ran successfully until I decided to hang up the boots in 1990. I then preceded to dispose of my practice which was continued in my name until a couple years ago. When was the Land Brokers Society (LBS) formed? I was instrumental in forming the first professional body solely for land brokers during 1970. We called it the Land Broker’s Society. In this project, I acted jointly with Tim Paterson who became the Society’s foundation President. I was Vice President. Explain the personal and business relationship with Tim Paterson (Past President and founding father of AICSA) We were very close friends. He was my neighbour and lived at the end of my street. Tim Paterson had a great deal to do with land brokers becoming what we are today. I would give him full marks as a matter of fact. The first meetings of the LBS were conducted mainly in his office, if not then in mine.
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Why was the LBS formed? The reason for the LBS forming was the fact that there was no professional body that existed solely for land brokers. There was the Land Brokers Division of the Real Estate Institute of South Australia (REISA), but REISA was primarily as its name implies, for agents. They still do a very good job as they aIways have done for agents but they did not truly represent land brokers, even though there was a number of land brokers who were members. I understand you were President of the LBS from 1973-1975, what was on your to-do list during your presidency? I believed that the word ‘broker’ indicated somebody who introduced buyer to seller, and that was not our function. Well, not our primary function anyway – some of us did it. Our primary function was Conveyancing work. So I continually plugged the idea that there should be legislation that separates agent from land broker. This was because most land brokers were employed by real estate agents and many agents held dual licenses. Fortunately, my message was heard and in 1973, the government amended the licensing legislation to prevent an agent undertaking the conveyancing work unless it was performed by a land broker. Another great victory during my term was the changing of the Conveyancers course from 1 year part-time to three years part-time as there was too much to learn in only 1 year part-time. This victory really put the LBS on the map. Lastly, I strongly believed at the time that the name of our profession must be changed to “Conveyancer” and this was evident in my advocacy for the LBS - expressed in the monthly newsletter of the society, of which had been appointed editor.
The sole reason as mentioned was because the name land broker was a misrepresentation. This message was not heard till some years after my Presidency. In 1994 when the Government legislated to change the name of our profession to Conveyancer. Did you face any challenges during your presidency? Yes. The premier of the day had made it known that he wanted to pass legislation making all contracts for the sale and purchase of real estate not binding on the parties until “explained” to them by a solicitor. The pressure of this threat was first relieved a little after the 1973 bill disassociating real estate agents and land brokers. And then, as mentioned, the home run, the 1994 legislation confirming our profession and changing its name to “Conveyancer” ensuring that it will be around for a long time yet.
So I understand that in 1993 the Land Broker’s Society became incorporated as the Australian Institute of Conveyancers South Australian Division. Tell us about that? We heard word of the pending legislation that would change the name of our profession to Conveyancer so we jumped the gun. The Land Broker’s Society became the South Australian branch of the Australian Institute of Conveyancers. The name of the organisation soon became nationwide for the profession, each state with its own branch, rules and officers. Most Memorable moment during your time in the Conveyancing Profession? One of my most memorable moments in Conveyancing and treasured possessions is the certificate of honorary life membership of the Australian Institute of Conveyancers issued to me on 24/8/95 for services to the SA Branch of the Institute and to the profession of conveyancing (as seen below).
Norm Duncan (on the left) with Past AICSA President Michael Psarros - after Norm was recognised with honorary life membership of the Australian Institute of Conveyancers.
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Is there is a difference between taking ‘Reasonable Steps’ and reaching ‘Safe Harbour’? The term ‘safe harbour’ is regularly talked about in connection with Verification of Identity (VOI), but it doesn’t appear anywhere in the Registrar General’s Verification of Identity (VOI) Requirements. So why the fuss? Each state or territory has, or will have a VOI Policy that articulates the standard by which practitioners must identify their clients. All will mirror the standard set out for electronic transactions in the Australian Registrar’s National Electronic Conveyancing Council’s (ARNECC) Model Participation Rules (MPR). South Australia’s VOI regime, introduced in 2014 and re-iterated in the Registrar General’s VOI Requirements in April 2015, captures specific transactions in the paper environment. This enables the South Australian Lands Titles Office to bring about best practice to land dealings generally to ensure their safety and integrity is maintained as the move towards transactions being undertaken electronically nears. Formally verifying your client and complying with the VOI standard has been introduced for a very valid reason. The typical ‘paper trail’ as we know it will soon be gone. Documents such as the Duplicate Certificate of Title will probably no longer exist after electronic conveyancing starts in SA. The ‘checks and balances’ that you’ve always relied upon, will quite simply be gone and the formal verification of your client is all that you will have to rely upon to validate the integrity of the transaction. This more robust process is absolutely critical to ensuring the safely of electronic dealings and to safeguard against fraud for paper-based dealings.
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The VOI regime implemented by our Registrar General and the MPR puts the onus on you the practitioner to ‘take reasonable steps’ to identify your client. This rather loose terminology was put in place to give you the practitioner flexibility in how you choose to identify your client. This flexibility also presents a double edged sword in that ultimately in the event of a fraudulent transaction it will be a court that will decide whether or not the steps you took were ‘reasonable’. So how can you be sure? This is where the Verification of Identity Standard set out in Clause 7 of the Registrar General’s Requirements comes in. If you follow it and the circumstances do not require further steps to be taken, you are deemed to have taken those ‘reasonable steps’ – hence the introduction of the term ‘safe harbour’. The Standard requires you to conduct a face-toface in-person interview with your client, and sight certain categories of original identification documents, and retain images of those documents. The Standard also allows you to us an Agent who must hold the appropriate insurance, and provide a declaration that meets the Requirements. If you deviate away from the Standard, you must still take ‘reasonable steps’ but cannot be guaranteed that the steps taken will deliver ‘safe harbour.’ Specialized systems/apps are available to assist you with undertaking a VOI in-house. Some include a number of additional factors that don’t only allow you to reach ‘safe harbour’ easily, but also allow you to capture other information above the standard to obtain a “gold standard” or best practice process, all while reaching “safe harbour”.
Is there is a difference between taking ‘Reasonable Steps’ and reaching ‘Safe Harbour’? Some suggested steps above the minimum required, are as follows: • Signing the transfer document at the same time the client face-to-face VOI is undertaken and capturing an image of it to retain with the other document images .This demonstrates that not only did you ID the client, you can show the document that was signed at the interview.
secure delivery system, preferably encrypted. Remember that this information is highly sensitive. Do not use emails, which have been shown to be vulnerable to hacking or misdirection. All of these steps are included in the IDSecure system and processes.
• Capture an image of the client at interview – further evidence that the person that presented does match the ID documents relied upon.
It’s critical that you strive to maintain best practice on every transaction – to not only help protect the integrity of the transaction for your client – but to protect yourself as well.
• Ensuring the person or party undertaking the face-to-face interview meet the professional indemnity and fidelity insurance requirements as set out by ARNECC
As qualified practitioners who our clients rely upon for our knowledge and expertise, we have an obligation to them to collectively maintain industry best practice.
• Delivery of the declaration and image direct from the agent to the practitioner by a
The IDSecure Team
IDSECURE. YOUR COMPLETE IN-HOUSE VOI SOLUTION.
3($&( 2 0,1 ) )25-8' 67
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Use IDSecure’s easy ‘walk-in’ feature to capture and save client ID data ‘on-the-spot’ in your RƬFHRUDWDORFDWLRQFRQYHQLHQWIRU\RXUFOLHQWVLPSO\E\XVLQJDQ\WDEOHWRUPRELOHSKRQH Ţ3UHVHQWDSURIHVVLRQDOLPDJHLQIURQWRI\RXUFOLHQWVDV\RXFDSWXUHWKHLUGDWD Ţ6WRSXVLQJWKHSKRWRFRSLHUDQGVFDQQHUDQGPRYHDZD\IURPSDSHUƪOHV
385&+$6($&/,(17'$7$),/()25$1'5(&(,9( An easy-to-use system that captures client ID data. Personal client ID information and images of documents stored. An automatic VOI Report generated and instantly available.
The Report uploaded to a secure Australianhosted and accredited online data storage centre for nine years. One convenient location to search and retrieve all your reports during that period.
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email DGPLQ#LGVHFXUHFRPDX or visit LGVHFXUHFRPDX
17
Adelaide: remain will the recent Property values rise as volumes level pick-up in the rate of value growth be maintained?
A new financial year has arrived and debate surrounding the future health and prosperity of the Australian property market shows no sign of slowing. Australia’s residential property market continues to underpin the nation’s wealth, representing $5.9 trillion (CoreLogic RP Data). Over 50% of Australian’s household wealth is tied up in the country’s largest asset class the residential property market (CoreLogic RP Data). CoreLogic’s latest market data reports the annual rate of capital gains growth has rebounded to the fastest pace since August 2014. The National median of housing prices have increased more than 10.4% to just over $595,000 in the past 12 months, with units experiencing a rise of 5.6% to $500,000. The value growth performance has been predominantly positive over capital cities in the past year. With 16.2% growth, Sydney has been much stronger than other capital cities, while Melbourne has recorded moderate growth of 10.2%. Increases in Brisbane (3.4%), Hobart (0.9%) and Canberra (2.4%) have been minimal, while home values have fallen over the past year in Perth (-0.9%) and Darwin (-2.9%).
30.0%
Rolling annual change in Adelaide dwelling values v. combined capital cities
25.0% 20.0%
15.0% 10.0% 5.0% 0.0% -5.0% -10.0% Jun 97
Combined capital cities Jun 99
Median Prices
Jun 01
Adelaide Jun 03
Jun 05
Jun 07
Jun 09
Jun 11
Jun 13
Jun 15
Capital Gain
Despite continued growth in dwelling values $430,000 across the majority of states and territories, $337,200 transaction volumes remain relatively level with a year ago. After the Northern Territory and Victoria, South Australia witnessed the largest percentage change increase in sales, with a positive increase of 3.3% in volumes transacted across the state. Overall, the national change has witnessed decrease of -1.0%. In the year to April 2015, 490,502 dwellings were transacted across the nation in comparison to 495,317 in the year to April 2014. CEO of Australia’s largest property settlement agent to the practitioner market, Peter Maloney of GlobalX Legal Solutions said Houses
Units
Dwellings
Past 12 months
4.7%
2.0%
4.5%
Annual over five years
0.8%
-1.1%
0.6%
Annual over ten years
3.8%
3.3%
3.7%
RP Data’s suite of hedonic indices are available across broad housing types and across geographical areas including statistical divisions, statistical subdivisions and postcodes nationally. For further information an our hedonic method, please visit www.corelogic.com.aui/indices
©2015 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
Source: CoreLogic RP Data
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“it is important for legal and conveyancing practitioners to remember that, irrespective of pricing fluctuations the volumes of property transacted each year remains quite constant, and therefore nurturing and protecting customer relationships for investor and repeat buyers is a key ingredient to managing aTurnover: successful conveyancing practice.” transaction volumes remain broadly level with a year ago
Capital gains growth in Adelaide dwellings have seen a 4.5% increase in the past 12 months. Median house prices for the South Australian capital are currently sitting at $430,000. Adelaide’s median unit value for a unit is currently $337,200, representative of a 2% increase over the past year.
Monthly house and unit sales, national
50,000 45,000 House sales (with 6 month moving avg) 40,000 35,000 30,000 25,000 20,000 Unit sales (with 6 month moving avg) 15,000 10,000 5,000 0 Apr 93 Apr 95 Apr 97 Apr 99 Apr 01 Apr 03 Apr 05 Apr 07 Apr 09 Apr 11 Apr 13 Apr 15 YoY % change in sales, states and territories
Annual Sales Year to Apr 2015
Year to Apr 2014
% change
10.0%
3.5%
2.4%
3.3%
0.4%
0.0%
Houses
354,787
347,285
2.2%
Units
135,715
148,032
-8.3%
Dwellings
490,502
495,317
-1.0%
-10.0%
5.0% -1.3%
-4.6% -10.2%
-20.0% NSW
Vic
Qld
SA
WA
Tas
NT
ACT
Note the most recent 8 months worth of sales is modelled based on historical sales levels due to the lag associated with collecting sales records.
©2015 CoreLogic, Inc. All rights reserved. Proprietary & Confidential
18
Source: CoreLogic RP Data
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Property values rise as volumes remain level The national provider of legal and conveyancing software and services has recently expanded operations in South Australia opening a new office on Pirie Street. GlobalX is preparing thousands of Australia’s legal and conveyancing professionals for revolutionary change represented by the introduction of PEXA across the nation with an integrated, hybrid manual and electronic conveyancing system, VOI, registration and training services.
To find out more about GlobalX’s full range of solutions and services visit www.globalx.com.au or contact a Client Care Representative on 13 5669. Source: GlobalX Legal Solutions, Australian Bureau of Statistics, CoreLogic RP Data Rafe Berding GlobalX Legal Solutions
Delivering SA Conveyancers comprehensive settlement and information search services “GlobalX provides our firm with fast access to property, business and personal information and an easy-to-use settlement booking and tracking service.” Kathy Stolinski – Adcocks Conveyancing Solutions
Find out more
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FORWARD THINKING – Plan ahead to ease money stress Planning for a profitable future is just as important as tying up loose ends from the past 12 months as the financial year has now come to an end. Many small business owners are likely to spend too much time tied up with gathering records and completing paperwork. This is valuable time that could be better spent planning for the year ahead. It’s now the perfect opportunity to reflect on the last 12 months and develop a solid growth strategy for the next year. Planning for the next financial year helps reduce financial risk, helps lead to business growth, encourages you to prioritise and focus, and prepares you for every eventuality.
• Focus on sales growth which is necessary for the health of your business ongoing sales performance training, for example, is key to ensuring long-term success • Look for creative ways to make extra profit from your existing products and services • Consider pre-paying expenses you know are imminent or delay them depending on your profit • Small expenses add up, so keep a record of everything to avoid a big hole in your budget. Why Outsourcing
Outsourcing your books to a qualified bookkeeper can help keep you on the right track and give you support. Many small business owners make the common mistake of doing their own bookkeeping to save money. A great bookkeeper knows how to identify and prevent problems before they happen. It’s estimated that businesses spend around 20 per cent of their time on bookkeeping. Business owners would be better off spending their time on core revenue generation.
• The most important advantage is to save time and money.
Planning for a successful Business year
• Remain confident that the business complies with statutory obligations
• Organise your records to reduce the stress of tax time • Set new financial goals after reviewing the previous year’s performance. Budgeting is an essential part of this • Review your business plan, which should look several years ahead, to reflect your new or revised business focus • Make sure you have adequate banking support
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• Reducing ongoing overhead costs and staff idle time. • No time wasting on recruiting headaches or ongoing training and a lower risk with contractual obligation • Exposure to great expertise of what works in different industries, technology resources and current changes.
I’m happy to talk further on how to work smarter through delivery of accurate bookkeeping services at
[email protected]
Advising a client about paying default interest It seems to be more common these days that parties are refusing to pay default interest. It appears some conveyancers (particularly lawyers) are advising their clients that they need not pay.
Should a conveyancer advise a client not to pay default interest?
That is not good advice.
We (as professional advisers) must make clear to our clients that they have legal obligations under the contract by which they should abide.
Before we start, this article is not intended as legal advice. Every situation has its own facts that may produce different results. So your client will need to get legal advice … and probably quickly. AICSA has published articles previously about default and default interest (p14 SA Conveyancer December 2008). It is unnecessary to go over that again here. However, let’s look at a couple of issues. Can a vendor refuse to settle if default interest is not tendered? There is no simple answer. A vendor is entitled to refuse to settle if the price is not tendered at settlement. The contract may define the price as including any default interest: if so, it complicates the situation. Most standard contracts treat default interest separately. A vendor will not be entitled to refuse to settle if the amount of default interest is small (the price is material in that context) or there is a legitimate dispute about whether default interest is payable at all. The fact that the delay in settlement was the purchaser’s bank does not mean that the purchaser is not liable for default interest to the vendor. Remember that the vendor is not deprived of any remedy because it is able to sue after settlement for any unpaid default interest. If a vendor refuses to settle and is not entitled to do so, the vendor is in breach of its obligations which may enable the purchaser to terminate the contract or claim default interest itself. So a vendor should not refuse to settle without serious consideration after receiving legal advice.
The short and unequivocal answer is: NO! NEVER advise a client not to pay default interest.
Given that default interest is legitimately payable under the contract, we cannot suggest to our clients that they not pay it. You may explain the consequences of not tendering the amount at settlement but cannot recommend that they do not tender it. If you do and it goes wrong, the consequences for the conveyancer are serious. • If the vendor validly terminates or settles and successfully sues for the default interest, the purchaser may claim their loss from you, alleging negligent advice. I know of various instances. And if your client is less than scrupulous, they are just as likely to turn on you! • Advising a client to disregard their legal obligations is unprofessional conduct. It puts your registration as a conveyancer at risk and is the basis for a complaint under AICSA’s professional conduct process. Even if the purchaser does not make a claim against you, they will believe that you gave them poor or wrong advice. They are unlikely to use you again and likely to tell their friends and colleagues. Conclusion Some clients will seek to avoid their legal responsibilities. It is legitimate to canvass all possibilities including the pros and cons. But do not recommend any course of action that does not uphold the obligations under the contract because it is likely to come back to bite you. Geoffrey Adam
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AICSA CONFERENCE 2015 On Saturday the 22nd August the 2015 AICSA Conference will kick off! This year’s conference is set to be a not to be missed event – AICSA has chosen not to wait the extra year preferring to host an annual Conference in 2015! The exquisite Hahndorf Resort (as seen in the picture to the right) will be the stage for this years Conference. Attendees should prepare themselves for a fantastic day of networking, learning opportunities - to stay at the cutting edge of Conveyancing - and an entertaining close at the Conference Dinner. With E-Conveyancing on the docks, there is no coincidence that the Conference will focus on this topic. AICSA’s own and E-Conveyancing Expert Geoffrey Adam will cover everything from VOI, to Alignment reforms and Risks for Conveyancers in the New Order. You will need this background information to start planning and to make sure your business is prepared. If that is not enough there will be Panel discussions with special guests including the Registrar-General Brenton Pike, GlobalX CEO Peter Maloney and ZipID Director Sean Simmons. And of course the breakout sessions, where you can choose what you want to hear! Two of the sessions are considered “Masterclass” meaning that these sessions are for well experienced conveyancers in that given area. We have you covered with sessions on the Form1 (Masterclass), Land Divisions (Masterclass), the PEXA platform, VOI - Identity and Security from within. All Conference particpants are welcome to join the post Conference drinks at Maximllians Restaurant. And Tee off the evening by joining the ‘Vero Cup’ golf competition! You could win a fantastic prize for a hole in 1 or hitting the land & not sinking your balls in the water.
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A fantastic day must go out with a bang – hence the Conference Dinner. The hilarious Mick Colliss will have you in stitches, after the fine dining - full three course meal - at the well renowned Maximllians Restaurant. And to tie the knot dinner music will be a relaxed vibe provided by the talented acoustic duo Playfight. Please note - You are still very welcome to join us for the Conference Dinner even if you did not attend the Conference during the day. We hope to see you all there for a day to remember! PS you might as well stay the night - the Hahndorf Resort has many accommodation options.
BOOK NOW!
FULL PROGRAM
Conference Speakers Brenton Pike Registrar-General EC and Alignment overview.
Peter Maloney - GlobalX CEO Panel Discussion on EC and Alignment Issues.
Geoffrey Adam - AICSA - VOI, Alignment Reforms, Risks for Conveyancers in the New Order.
Matthew Gillet GM Prac Services, PEXA - The PEXA platform in Operation.
Sean SimmonsZipID Director Identity - What are you really seeing? & VOI group discussion.
Jacqui Pawelski – Form One Matters - Form 1 – Beyond the Basics (Masterclass)
Natalie Westover – Norman Waterhouse Lawyers - Land Divisions Masterclass.
Tim O’Halloran AICSA President - Conference Opening.
Neil Johnson– First Title Master of Ceremonies.
Rebecca Hayes - AICSA CEO Facilitating Panel Discussion on EC and Alignment.
Chris King - TIMG - Security from within - Collection and Protection.
Conference Dinner Guest Speaker Mick Colliss will be joining us for the evening. And Mick has quite a story to tell... - click here to see Mick’s promo video. As a young kid growing up, his dream was to play for Australia. But he quickly discovered desire is no substitute for ability. Then finally, at the age of 42, after successive failures at cricket, rugby league, rugby union, surf lifesaving and lawn bowls, he discovers the game of sudoku. He can’t play that either...
Talented acoustic duo Playfight will provide a relaxed, soulful vibe during the full three course dinner. Click here or on the above picture to see the girls belt out a vocal!
The well renowned Maximllians Restaurant in Hahndorf will be serving up a Full Three course Dinner with Drinks. Please note: You are still very welcome to join us for the Conference Dinner even if you did not attend the Conference during the day!
BOOK NOW!
PARTNER’S PROGRAM
23
Photos From Professional Development Sessions
Tricia Jarvis & Anna Ardolino with AICSA Professional Development Officer Megan Whitford.
Paul Ng - Minter Ellison & Fiona Scwabb - First Title.
Paul Ng - Minter Ellison addressing the Commercial Leases seminar.
Geoffrey Adam, John Best & Julie Runcie having a casual chat after the Seminar.
24
Tori Hodgman & Paul Watkins - Stewart Title with Rebecca Vasey - Wallmans Lawyers.
Photos From Professional Development Sessions
Fabrizio Porcaro - Porcaro Lawyers addressing the SelfManaged Super Funds seminar.
Geoffrey Adam - AICSA laying down the law at the Priority Notices seminar.
UPCOMING PROFESSIONAL DEVELOPMENT 11 August - SEMINAR - Risk Management - Settlement Issues 13 October - SEMINAR - Environmental Issues 10 November - SEMINAR - Community Titles Developments Recordings of these seminars will be available for purchase.
Paul Watkins - Stewart Title delivering the Risk Management (Fraud) Seminar.
Charlie Belperio - Belperio Clark sharing his knowledge with Members at the Death - Challenges and Solutions for Advisors (Part 2) seminar.
25
Why you should be using LinkedIn By now most business professionals have heard of LinkedIn and many of you may in fact have created a LinkedIn profile. That profile may be as simple and basic as your name, title and business name, or you may be using it comprehensively to source new opportunities and build quality relationships. Here’s a snapshot of LinkedIn: • Launched May 2003 • LinkedIn is a business-oriented social networking service • Two new people sign up to LinkedIn every second • 70% of LinkedIn users are outside of the US • 35% of users access LinkedIn every day. Many LinkedIn profile owners log in to the platform ‘every now and then’, accept (or decline) invitations to connect and log out again and wonder what is the point of another social media platform to manage.
Here are some LinkedIn functionalities of which you may not be aware. You can: • create a company page for your business that people can follow • export a list of all of your LinkedIn connections, including their first name, surname and email address • import a list of all of your connections outside of LinkedIn using something as simple as an Excel spreadsheet • run and save searches and have LinkedIn email you the results weekly or monthly • categorise your connections and assign them to lists to help you manage and maintain the relationships you have created • filter lists of connections • view who is looking at your profile • record data and information against individual connections that is only visible to you • view how you rank against your competitors • set reminders and have LinkedIn email you when that task is due
Hello, we’re Quisk; a branding, design & digital studio We collaborate our creative minds to help businesses, big and small, realise their vision and flourish.
08 8350 0088 234 GILBERT ST ADELAIDE SA 5000 QUISK.COM.AU
26
Bringing brands to life, through... BRANDING . LOGO DESIGN . WEBSITES . SOCIAL MEDIA . STATIONERY BROCHURES . E-MARKETING . SEO . PUBLICATIONS . ADVERTISING
Why you should be using LinkedIn • write long-form posts (blogs) which help build your reputation and credibility • endorse and be endorsed by your connections for strengths and skills • give and receive recommendations (testimonials) which builds credibility • follow key business people and subscribe to their long-form post (blog), i.e. Richard Branson, Bill Gates, Naomi Simson, etc. LinkedIn’s user-friendly functionality provides you with an opportunity to connect with people and build quality relationships (rather than focusing on the quantity of relationships) that you have with people. If you’re already using LinkedIn, it’s important to employ a strategy to maximise the return on your investment. And if you’ve been put-off using social media in your business, I encourage you to be open to and embrace LinkedIn for your professional and business success. Do you want to develop a LinkedIn strategy to help build your brand, reputation and relationships with your network? Quisk Design facilitates group 2-hour LinkedIn Sessions every month or one-on-one consultations on demand. Visit www.quisk.com.au/workshops to view the next available session. Alternatively contact us to arrange a LinkedIn Profile Audit and Review. Kerryn Page Director, Quisk Design
Founder, Big Picture - the ‘Give Back’ Initiative 234 Gilbert Street, Adelaide www.quisk.com.au
[email protected] 8350 0088
27
Hiring Decisions - Contractor Vs Employee When it’s time to hire extra staff, employers have the choice between employees or temporary contractors or a mixture of both. This can be a stressful time for employers, usually because they are under resourced and have limited time to create job descriptions, post job ads, review resumes and interview candidates. There are pros and cons to both options and businesses should choose the best option to suit their unique circumstances.
•
To help make things easier, I’ve provided a list of considerations for each employment type.
Permanent Employees
Contractors Most often hired for project work through a reputable recruitment agency, skilled contractors are ready to hit the ground running, can help up-skill existing staff and may provide insights into other industry projects and contacts. Whilst a temporary contractor will usually cost more on a per hour basis than an employee, there are many benefits that contractors can provide to businesses that are often overlooked. The Pros of hiring contractors •
Flexibility
Contractors provide employers with the flexibility to easily increase their workforce during busy periods and decrease during quieter times, without the stress of having to lay off staff. •
Reduced HR costs
The more employees a business has, the more resources are required to manage HR tasks such as payroll, superannuation and leave management etc. That’s why contractors prove especially beneficial to small businesses with minimal HR resources, as these employee benefits are managed by the recruitment agency. •
Minimal training
Contractors generally require minimal training if any and are ready to hit the ground running, saving businesses time and money.
Temp to perm
Occasionally an employer finds a temporary contractor so beneficial for their business, that they make an offer of permanent employment. The beauty of a temporary contractor is that their placement effectively acts as a trial period, allowing employers to review their potential, free of obligation.
Job security, long-term prospects and the opportunity to build solid relationships with other staff members help employees to do their job more effectively. Whilst contractors may provide employers with flexibility during times of economic cautiousness, employees often possess a greater sense of commitment and loyalty to their employer. The Pros of hiring employees •
Professional development
Employers are more likely to invest in the professional development of employees, having the security of a permanent employment arrangement in place. In return, employees value the job security afforded to them and commonly look for opportunities to build on their role and grow in their careers. •
Team building
Contractors don’t enjoy the benefits of engaging with their co-workers in the same way that employees do, simply because they are usually hired for shorter, project specific work. Employees provide a more suitable solution for employers who wish to create a culture of commitment, team support and comradery in their workplace. •
Company values
Employees have more time to absorb and subscribe to a business’s goals and values, delivering positive messages about the business to their networks and peers. • Continuity Employees are able to offer more continuity and momentum in the development of their role.
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Hiring Decisions - Contractor Vs Employee Whether opting for employees or contractors, my advice for employers is to select the option that will best fit the requirements of the role, the company culture and the longer term plans of their business. Meet Tanya Watson As Edge Recruitment’s commercial recruitment specialist, Tanya takes care of all enquiries for permanent, temporary and contract staff in the commercial property space.
needs of commercial property employers and how important it is to have capable and motivated staff that can hit the ground running. Call Tanya for a confidential discussion about employment matters on 0429 186 347 or email
[email protected]. Join the conversation with Edge Recruitment on Twitter, Facebook , LinkedIn or visit their website.
She works with clients and candidates in industry sectors including commercial agency, conveyancing, shopping centre management, building and construction, state and local Government and more. With a strong background in the retail property sector, Tanya has a solid understanding of the Tanya Watson
VOI Report Vault.
Protecting client information. TIMG - FileSaver’s VOI Report Vault is an online repository for law firms and conveyancers to securely store and manage highly confidential client identity documents over the long-term.
Call our people now for more information. 1800 464 360
[email protected]
timg.com
29
Article from The Vault - Is a Form 1 required to be served on an Assignee of a Contract? Many real estate agents and some Conveyancers are unsure about whether a new Form 1 is needed when a Purchaser assigns their contract to an Assignee or whether the original Form 1 served on the Purchaser is required to be served or even provided to the Assignee.
the contract and thereby create a new right to cool off.
The following is my understanding from research and advice previously sought, note this is not legal advice but just my opinion.
The Purchaser is an assignor of rights in a contract, not a vendor of an interest in land, and is not required to prepare and serve a Form 1 on the assignee.
This question about whether a Form 1 is required for a Deed of Assignment of Contract is essentially based on the following scenario: • Vendor sells to Purchaser; • contract is executed between Vendor and Purchaser; • Vendor serves Form 1 on Purchaser as required under Section 7 of the Land and Business (Sale and Conveyancing) Act (“the Act”); and • Purchaser (as Assignor) then assigns the contract to the Assignee (the “new Purchaser”). The question is - is it sufficient to rely on the Form 1 between the original Vendor and the Purchaser, or does one of those parties need to serve a Form 1 upon the Assignee? Making decisions unforeseen in the Act As we know under Section 7 of the Act, the Vendor is required to serve a Form 1 on the ‘Purchaser’ at least 10 clear days before settlement. The Act defines the ‘Purchaser’ and specifies a number of parties who fall under the definition, being people named in the contract and people authorised to act on behalf of the Purchaser. However, the definition does not include someone who is the Assignee of a Purchaser already named in the contract. Given that an assignment usually only assigns the rights of the Purchaser to an Assignee and not the obligations, it may also be argued that at the time of the assignation the Purchaser had already been served with a Form 1 and therefore no longer had any ‘right’ to be served (as long as the Form 1 was true and correct at the time of serving or course). It would be absurd if a Purchaser whose right to cool off had expired could assign their interest in
30
It follows that having a Form 1 served equally would not be a right of the Assignee. Therefore there appears to be no need for a Vendor to serve a new Form 1 upon the Assignee.
At the same time, the original Purchaser will remain liable to the Vendor to perform their obligations under the original contract. The new Purchaser is not entitled to a copy of the Form 1 served by the Vendor on the Purchaser unless it is a term of the assignment. Considering exceptions to the ‘rule’ At the heart of our position on this matter is that requiring Vendors to serve a Form 1 on an Assignee will cause hardship on the Vendor because such a situation would give rise to new cooling off rights and risk the agreement the Vendor had already reached with the original Purchaser. This leaves us with two situations where we might encounter exceptions. 1. If a Vendor agrees to release the Purchaser from all obligations as part of the assignment, then the Vendor will need to enforce performance against the Assignee. However, an obligation to serve a Form 1 on the new Purchaser is not created for the reasons set out above. 2. If the Vendor allows the contract to be novated, effectively extinguishing the contract and replacing it with a new one, then the new Purchaser may well become a ‘purchaser named in a contract’ and required to be served with a Form 1 by the Vendor. This is an extremely rare occurrence in residential property transactions but worth noting. NOTE: This matter is complex and this article has been written to give some overall guidance. Please seek legal advice if you are facing this situation so that you can obtain advice specific to your scenario. Brad Eckermann
Contact & Disclaimer Australian Institute of Conveyancers South Australian Division Incorporated CONTACT 6th Floor, 68 Grenfell Street Adelaide SA 5000 GPO Box 2402 Adelaide SA 5001 Tel: 08 8359 2090 Fax: 08 8232 8618 DX 58223 L.T.O. Email:
[email protected] Web: www.aicsa.com.au AICSA STAFF
PRESIDENT
Rebecca Hayes Chief Executive Officer e:
[email protected]
Tim O’Halloran O’Halloran Conveyancers p: 8212 4034 e:
[email protected]
Geoffrey Adam
E-Conveyancing & Legislative Projects Officer
VICE-PRESIDENT
Glenys Jackson Business Manager e:
[email protected]
Kathy Stolinski Adcocks Conveyancing p: 8229 5555 e:
[email protected]
e:
[email protected]
Ashley Ireland Marketing and Communications Officer e:
[email protected] Karen Holt Membership Officer e:
[email protected] Megan Whitford Professional Development Officer e:
[email protected] Janette Whale Administration Officer e:
[email protected]
COUNCILLORS Brad Eckermann Eckermann Steinert p: 8366 7900 e:
[email protected] Ben De Palma Optima Conveyancing p: 8418 5400 e:
[email protected] Roger Scott Conveyancing Centre p: 0409 347 705 e:
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Jennifer Raymond Laity Morrow p: 8429 1412 e:
[email protected] Denise McKay McKay Business Services p: 8333 3525 e:
[email protected] Jeff Stevens Stevens Partners p: 8232 8255 e:
[email protected] Stella Sinanis p: 8353 1856 e:
[email protected] EDITORS Ashley Ireland e:
[email protected] Rebecca Hayes e:
[email protected]
Disclaimer The views expressed in this magazine are those of the author and not necessarily those of the publisher or editor. The material contained in this publication is of the nature of general comment only, and neither purports, nor is intended to be advice, legal or otherwise, on any particular matter. No subscriber or other reader should act on the basis of any matter contained in the publication without considering and, if necessary, taking the appropriate professional advice upon their own particular circumstances. The publisher, the authors and the editor expressly disclaim all and any liability to any person, whether a purchaser of this publication or not, in respect of anything set out in this publication and of the consequences of anything done or omitted to be done by any person in reliance, whether whole or partial, upon the whole or any part of the contents of this publication. No correspondence will be entered into in relation to this publication either by the publisher or the editor.
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How does First Title help your business? At First Title, we do more than just underwriting risk. We partner with practitioners so we can better understand their business which means we can provide more effective title insurance solutions.
Report on Title fee You may choose to receive a $75 Report on Title fee from First Title. We offer this payment as acknowledgement of the time and expertise it takes you to complete the due diligence process required for your client’s purchase of a First Title Policy.
Risk management for your practice First Title will indemnify the property owner against errors you make in good faith such as incorrectly calculating outstanding rates and taxes during due diligence.* This makes title insurance a powerful risk management tool which can protect you against unnecessary claims on your professional indemnity insurance.
Like to know more? Visit our website www.firsttitle.com.au or speak to our: • •
South Australian BDM - Fiona Schwab on 0404 824 900 Customer Service team on 1300 362 178
*Indemnity is provided to conveyancers and solicitors who are appointed as distributors by First Title (in accordance with ASIC class order 05/1070). This material is intended to provide general information only. For specific coverage and exclusions, please refer to the policy terms and conditions. Premium is payable on policy issuance. Some products/services may vary by State. Price and products offered are subject to change without notice. © 2015 First American Title Insurance Company of Australia Pty Limited ABN: 64 075 279 908 -all rights reserved. AFSL no: 263876
