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Property disputes: Dispute resolution guidelines updated

Property disputes: Dispute resolution guidelines updated

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Revised guidelines allow conveyancers to refer disputes to the LIV’s sub-committee for resolution, where the other party is represented by a lawyer. 

The Property Law Dispute Resolution Guidelines used by legal practitioners in conveyancing matters are not compulsory by any law or regulation, but it has long been common practice to use the guidelines to resolve disputes in a timely and cost-effective manner.

LIV Property and Environmental Law Section developed guidelines that help resolve conveyancing disputes efficiently, whereby disputing parties agree to subject themselves to the decision of the Property Law Dispute Resolution Committee for a nominal administrative fee ($100 for members, $200 for non-members).

The revised guidelines now allow conveyancers who are members of the Australian Institute of Conveyancers to refer disputes to the LIV sub-committee for resolution, where the other party is represented by a legal practitioner. 

The amended guidelines were revised along with the revised Contract of Sale of Land, effective from 23 August 2019. 

The guidelines are intended to resolve matters quickly by assisting parties to resolve conveyancing disputes without resorting to costly litigation. Providing clients this form of alternative dispute resolution (ADR) allows the client to let go of an unduly frustrating dispute, which forms a valuable tool for practitioners to utilise to demonstrate value to their clients.

This ADR mechanism allows an impasse to be resolved without resulting in destructive criticism from your client, who may not be completely satisfied with an unresolved dispute or where they are ultimately referred to a solicitor to institute litigation to recover damages. 

The following instances illustrate disputes which the sub-committee has resolved in 2019.

1. Adjustment of land tax

Background

Under a contract of sale for property, the vendor and the purchasers could not agree how land tax was to be adjusted under the contract. 

The issue for determination is how land tax is to be properly adjusted between the vendor and purchasers and what payments (if any) need to be made to give effect to the proper adjustment of land tax. That is, whether land is apportioned under the then general condition 15.2 of the contract as land tax being “. . . apportioned on the . . . basis (that) . . . the land is treated as the only land of which the vendor is the owner”, being that land described in the particulars of sale of contract as opposed to s35 of the Land Tax Act providing that the rate of land tax is as set out in Schedule 1 of the Act. 

Ruling

In the opinion of the Property Law Dispute Resolution Committee and on the information presented, the proper adjustment is calculated by aggregating the values of all the titles on a single holding basis. That is, the taxable value of each title is added, and the total is treated as a single holding. 

2. The operation of PEXA workspace and Duties Online

Background

The purchaser bought the property on 9 March 2019 and signed a contract of sale with the vendor. Settlement was to occur on 29 March 2019. 

The solicitor for the purchaser submitted that by operation of the then special conditions EC 5 and EC 10, the date for settlement could not be before 5 April 2019 because the invitations to the PEXA workspace and the State Revenue Office Duties Online Statement were not received by the purchaser until 28 March 2019. 

Therefore, the purchaser was under no obligation to settle until 5 April 2019 and no penalty interest could be charged until after 5 April 2019. 

Ruling

In the opinion of the Property Law Dispute Resolution Committee and on the information presented pursuant to the statement of agreed facts:

As a result of the operation of the then special condition EC 5 of the contract the vendor was required to “nominate a time of day for the locking of the workspace at least seven days before the due date for settlement”, the contract due date was extended at the option of the purchaser seven days after the PEXA workspace invitation was made.

The vendor can only claim penalty interest under the contract from 5 April 2019. 

The guidelines are available for download as a pdf on the LIV website. ♦

Paul Snow, senior lawyer, LIV


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