Recent legislative reforms have resulted in wholesale changes to the South Australian Real Property scene. Here is a summary of those changes and what you need to be aware of.
There have been a number of important changes arising from the introduction of the South Australian Real Property (Electronic Conveyancing) Amendment Act 2016 (“Act”).
LTO Panel Forms
The new Act has resulted in the introduction of completely new Lands Titles Office (LTO) panel forms to use when lodging documents with the LTO for registration (e.g. leases, transfers, caveats).
All dealings lodged with the LTO which are dated after 4 November 2016 must be in the new format (with the exception of Mortgages and Discharges - both of which have an extended transition period until 3 July 2017).
What Are The Consequences Of Using Incorrect Forms?
The use of the “old forms” will mean that the documents will be requisitioned by the LTO. In those circumstances it may require the parties to prepare and execute “fresh” documents in the “new form” and have the documents re-lodged with the LTO. This could result in increased costs in preparing and arranging the execution of fresh documents, as well as more significant consequences, including the possibility of settlement falling through and/or default under a contract.
Verification Process - What Is Required Of Me As A Solicitor/Conveyancer?
In addition to the changes to the LTO panel forms, the Act has also effected significant changes relating to:
- Verification of Identity (VOI);
- Verification of Authority (VOA); and
- Client Authorisations (CA).
Previously, the LTO required that a solicitor/conveyancer certify that a document complied with the Real Property Act.
Three further certifications are now required:
- that the solicitor/conveyancer has taken reasonable steps to verify the identity of the signatories of their client;
- that the solicitor/conveyancer holds a completed Client Authorisation signed by their client; and
- that the solicitor/conveyancer has retained evidence of their client’s authority to enter into the dealing.
Client Authorisation is the means by which a party gives express authority for the solicitor or conveyancer to certify the agreement on their behalf. This can be given in three different ways: by a Specific Authority; a Standing Authority; or a Batch Authority.
You will need to be aware of and understand these changes when arranging the execution of any documents that you or your client intends to be registered with the South Australian LTO.
With experience in all areas of property, Cowell Clarke’s property team has the relevant knowledge and experience in relation to the new electronic conveyancing requirements, “new forms” and the Act to help you and your client successfully register documents with the South Australian LTO and provide advice in terms of compliance.
Duplicate certificates of title and tenant’s copies of crown leases are no longer being issued by the LTO. As a consequence, it is not necessary to lodge duplicate certificates of title when registering any dealings (including leases and transfers) with the LTO.
Changes to the Standard Law Society Contract for Sale of Land
The Law Society of South Australia recently made changes to its “standard” Contract for Sale of Land (“Contract”).
Whilst, at this stage, there is no requirement that practitioners and other industry professionals use the updated Contract, it is expected, over time, that industry professionals will transition to use of the “new” Contract.
The new Contract is substantially different the previous version. Some major changes to the Contract include:
- Tailoring the Contract to incorporate the new electronic conveyancing system requirements, including specific provisions regarding the requirements for selling land under the new system and old system.
- Additional requirements regarding the payment methods for deposits and notification to various parties of completed sales.
- Changes to requirements regarding the fees for serving notices of default, the retainment of lawyers, price adjustments, and settlement and payment periods.
Consequently, it is crucial that you and your clients are aware of and understand the changes to the Contract in order to avoid facing unnecessary penalties and costs.
Real Property Tax Concessions
There are a number of important South Australian specific stamp duty concessions that you and clients should be aware of, the following:
Stamp Duty Concessions
- Currently, transfers of non-residential and non-primary production real property qualify for a one-third reduction in stamp duty as part of the gradual phasing out of stamp duty on real property announced by the State Government in the 2015-16 budget.
- An additional one-third reduction of stamp duty rates will be implemented as of 1 July 2017 and a complete abolition of stamp duty will be effective as of 1 July 2018.
- We expect this phase out of stamp duty scheme to not only encourage Australian investors, who may have traditionally looked to the eastern seaboard, to purchase property in South Australia, but also to enhance the incentive for foreign property developers to invest in South Australian real property.
Off the Plan Apartment Concessions
- Complete stamp duty concessions for the purchase of new off the plan apartments have been extended until 30 June 2017 and the boundaries restricting the concession have been removed.
- As a result, purchases of off the plan apartments anywhere in South Australia are now eligible for the concession.
We strongly recommend that you consult a South Australia practitioner if you have any queries regarding the changes arising from the new electronic conveyancing system, the new LTO forms, the changes to the Standard Contract or if you require any general advice in respect of the new requirements and compliance obligations.
If you have any queries regarding the recent changes please do not hesitate to contact us.