Forum Replies Created
Hi Michael
I would think that the tenant would be liable unless there is a police report. If there is a police report, that is, clear evidence that a break in did occur, then your insurance should cover it. However, if there is no report, given the fact that it was not reported to you at all in the subsequent 1.5 years, you could probably appropriately claim that it was damage caused by the tenant with the repair costs deductible from the bond money.
Cheers
K
And something I forgot to put in my above post. Double check your information about the title being transferred into your name as well without paying any stamp duty once you have been together for three years. It may be a recent change to the legislation but I haven't heard of it before.
The only ways I have ever heard of property being transferred into another person's name without having to pay stamp duty are in family law property settlements and when property is left in a will.
But if I am wrong on that I am happy for someone to correct me.
Cheers
K
I don't understand what the benefit is of having your name on the mortgage without being on the title. Wouldn't that mean that you were liable for the mortgage without having any equity in the property? I can understand this from the bank's perspective (another person to chase if the title holder can't pay the mortgage), but I don't see the benefit of being on the mortgage only. Maybe one of the mortgage brokers can clarify that for me.
If you want to be registered on the title in any capacity, whether it is 1% tenants in common or 50% joint tenants, there will need to be a transfer out of your partner's name and into both your names. That will incur stamp duty fees. It will not be any cheqper if you only have 1% of the title. You will still pay stamp duty on the full amount of the property. There is no way around this.
To my mind, having your name on the mortgage only without also being on the title will not change your situation. You will still not have any assets but will have substantially more liabilities in the form of the mortgage.
I think the bank is talking bollocks when they claim they are just trying to protect you. They are just trying to protect themselves. The bank doesn't care about your relationship with your partner (and why should they?) There must be another reason they don't want to put your name on the mortgage.
Speak to one of the brokers who replied to you. They all know what they are doing. They might have a way around your dilemma. But, to my mind, I don't see that having your name on the mortgage without also being on the title will make the bank any more likely to lend to you.
Cheers
K
I have never heard of an agent charging to do a rental appraisal.
If an agent is suggesting that you pay for them to come out and have a look then run the other way.
Cheers
K
I know that in the NT you need Body Corp approval to remove or alter any load bearing walls. You don't need approval to put up walls.
But, as per the other posts, check your local Council.
Cheers
K
Trusts aren't really water-tight asset protection vehicles. Once upon a time they used to be but Courts are finding more and more ways to look behind the structure to the trustees.
I would think that if you attempt to buy a property AFTER you have received notice of litigation against you, that is, you have been put on notice that you may have to fork out some money, a Court might consider that any Trust structure is merely to hide assets from the person who is suing you. Without getting too legal and technical, this may be a reason for the Court to consider the assets of the Trust as being your personal assets.
It is very easy to find out Companies and Trusts that an individual is involved in. Given that you are already in Court, I would expect that the lawyers for the person suing you will be all over any entities you are involved in and it would be raised as an issue.
If you do go ahead and buy it, make sure that you get EXCELLENT legal advice to ensure that whatever structure you buy in is watertight. A discretionary trust is not the way to go: some recent court decisions have held that the trustee actually owns the property of the Trust.
I think you should work out how just how cheap the property is and decide whether you are willing to take the risk. If you do buy the property and the plaintiff's lawyers find out, then you will be up for extra legal fees while your lawyers argue about why the plaintiff cannot have access to the property you want to buy. You will be up for extra legal costs for the structure to be set up in such a way so as to minimise the chance of the plaintiff getting his/her hands on the property.
I think that you are asking for trouble.
Cheers
K
I think you are inviting trouble
Worst case scenario – you could be made to put back up what you pulled down or take down what you put up. Although I have never heard of this happening. Someone please correct me if they have heard otherwise.
The more probable problem you will face is if/when you go to sell it. I can't imagine there will be too many buyers who will want a property that has had renovations done without council approval.
Cheers
K
For a lawyer, call Sean Ryan from FRS Legal. His number is 08 7129 3700. Very knowledgable, great bloke. He is the Property Law lecturer for the Property Investment course through TAFE. I use him.
You don't kneed an accountant in Adelaide if you don't live here. Just use your regular accountant. If you don't have one, find one nearer to where you live. My accountant is in Brisbane and while she is excellent enough for me not to change to one in Adelaide, live would be a bit easier if she were close to where I live.
Good luck
K
You can set it up yourself but as a lawyer my advice is …. don't, just don't.
There are so many issues that need to be taken into consideration. $2000 is nothing. Getting it wrong (and there are so many things to get wrong) will cost you a lot more.
Again, just to recap – don't.
Cheers
K
You are a painter. Why not paint the undercoat yourself?
K
Hi Mark
Certainly one of the more subtle spruikers we have seen on the forum for some time …
I would think that seasoned investors would be very wary of anything that promises a guaranteed rent. Most people on this forum know that the "guaranteed" rent is built into the purchase price.
Also, offering to pay outgoings for a period smacks of needing incentives to sell the property, that is, the property is not strong enough to sell on its own.
Just my opinion (but I expect it is the opinion of a lot of other investors on this forum too)
K
Hi again
Sorry. I meant to put this in my above post but got distracted.
This clause is actually a very poorly worded clause. That clause is essentially an extended cooling off period. As I said above, a purchaser is under no obligation to advise of the reasons for not proceeding with the contract but rather can just inform you that pursuant to that clause they are exercising their right to terminate the contract.
The clause should be much more specific using terms such as the ones suggested by Scott No Mates above. Find out what the purchaser intends to do with the property. Is it get council approval to do something? Then specify that in the contract. Is it building/pest/electrical inspections? Then specify that in the contract (and don't just put "subject to satisfactory … inspections". Get your solicitor to draft the due diligence clause to limit the circumstances under which the purchaser can pull out. What if the only thing I am not happy about wrt a building inspection is the colour of the shirt the inspector is wearing? Of course I shouldn't be able to get out of a contract but if the contract says "subject to satisfactory building inspection" then I can.
if you have very specific clauses and purchaser wants to get out of a contract due to the results of inspection, then you can call them on that and have them explain to you their grounds for wanting to terminate. They can only terminate if those grounds fall within the terms set out in the clause. For example, you could have a clause that says that a building inspection will be deemed satisfactory unless the problems detected in the inspection will cost more than $2000 to fix. The purchaser will then have to show you the inspection which sets out the costs to repair the faults if they want to use that clause to terminate.
However on the clause currently in your contract if you query why the purchaser wants to terminate all they will be obliged to tell you is that the results of their enquiries weren't satisfactory. That could mean that their mum didn't like it.
Get your solicitor to change it. He or she should know the wording to use to minimise the circumstances under which a purchaser can get out of the contract.
I hope that helps. It's late and I could well be rambling on.
Cheers
K
In fact, a purchaser relying on a clause such as the one you have quoted doesn't have to give a reason at all. They can just advise that they are terminating the contract under that clause.
Cheers
K
Thanks for that.
As a solicitor I can confirm that unless is it specifically noted in the contract it is fraudulent. The intent is for the bank to be misled so that the purchaser can obtain a benefit (extra finance). That clearly makes out the elements of fraud in every state and territory.
As for putting a solicitor on a retainer for being honest, I would expect that every lawyer would advise the same. It's pretty straightforward. If a solicitor advised any different, he/she should be reported to the relevant Law Society.
Whenever I comment on legal issues on this forum I normally put a disclaimer down the bottom to the effect that it should not be interpreted as legal advice and that independent legal advice should be sought. However, I am prepared to stand by this one.
Cheers
K
Hi
I'm doing some developing in the Adelaide Hills and would be keen to get together and swap tips. PM me and I will forward you all my details.
Cheers
K
I rent my own "home" from our Family Trust. I don't have a PPOR at all. My accountant and the ATO have no problems with this arrangement. There are however very specific reasons that we do this. They are detailed in the post below:
https://www.propertyinvesting.com/forums/getting-technical/legal-accounting/4323748?highlight=trust
You should probably work out the pros and cons of doing this. Weigh up the cost of running the trust and the facts that you lost the CGT exemption and the inability to claim losses against the benefits of being able to negatively gear the property. For us it was a very obvious decision to have the property in the trust.
Cheers
K
Hi Aimhigher
this was discussed on this forum recently. Here is the link:
https://www.propertyinvesting.com/forums/property-investing/help-needed/4324090
Having said that, I have noticed that valuations are coming in VERY low at the moment, so if all three valuations come in low then there may be a few bargains out there. I will say though, banks councils etc must be seen to not be favouring anyone so I would think it unlikely that sales like these are being snapped up by insiders. If anyone on the forum has been able to get a bargain from knowing the "right" people, please feel free to correct me.
Cheers
K
About 4 years ago we bought an IP in Mt Isa. We sold it 12 months later, mainly because the property management side of it was a nightmare, but also because prices stopped rising. We thought that the market had hit its peak. Over the next two years prices in Mt Isa doubled and have increased more in the last 12 months.
Who knows what the market is going to do?
But beware management of properties in small towns where there is no real competition amongst property managers. Every month we had to call up to get the rent paid into our account. Every month we were told that the PM didn't have our banking details. Every month we told the PM it was the same account as the previous months. Repairs were undertaken without our authorisation, repairs we authorised were still not done 6 months later, inspections were done that all came back excellent and then two weeks later we were given lists of repairs that cost thousands of dollars.
Capital growth and or rental yields may be great in these towns but at what cost? I lost a fair bit of money in dishonour fees with my bank because the money was never there in time to pay the mortgage. And I nearly tore my hair out several times. Never again.
Cheers
K
Hi Tony
It is unusual that the convenants expire in 5 years. Usually they are permanent.
To answer your questions in order:
1. If the covenants do expire in 5 years then there is no reason that someone would not be able to build units on the site, depending on the development plan. Usually local development plans stipulate minimum sizes for units/townhouses. I have a couple of townhouse sites in regional Victoria at the moment and in that area the minumum size is about 250sqm per site.
2. A new owner would need to go through council to get approval to build multiple dwellings.
3. You could object to multiple dwellings (MD)although that may not make any difference. The council would look at the reasons for the objections. Council considers applications on their merits. They would look at how MD would impact on the area. Can the infrastructure take the extra cars/ would it be inconsistent with the rest of the area etc. On one hand they might say that when you bought your land you knew that the covenants were going to expire in 5 years so you can't say that you thought that there would never be MD next to you. On the other hand, if there were lots of objections, they may say that it would be unfair to the rest of the landowners if they were restricted to one dwelling and a developer came along and built MD. Who knows which way council will go.
Can you afford to buy it and build a single house on it and then sell the house? What if a group of you got together and built a single house? This would be the easiest way to ensure that MD don't get built.
Alternatively you could start kicking up a stink about it now. Put up some protest signs. You will be asked to take them down but at least any potential developer purchasers will know that it won't be a straightforward process through council.
Unfortunately, ultimately you are at the hands of your local council. Unfortunately for you, I have yet to come across a council who made rational, reasonable decisions when it comes to the development plan.
Cheers
K
