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5 things you need to know when buying your first home

March 22nd, 2018

You’ve been saving for ages, you have found “the one” and you want to make an offer.  There is so much to think about when choosing to buy your first home – deciding if you want build, buying a renovator’s delight,  co-ordinating the big move, getting funds in order and everything seems to happen so fast.

Here are some helpful tips to help you prepare for the challenge of buying your first home:

1.  The dollars

Most first home buyers have been saving for a long time for their first home.  It can be easy to get swept away with the price when you have your heart set on a particular property.  Thankfully, there are some great incentives for first home buyers that can save you money, but there are also some incidental costs that you may not expect.

It is not just the purchase price you need to factor in when buying your first home.  Below are some other costs to consider:

  • transfer duty (stamp duty): this tax has been around for a while so it may not be much of a surprise to have to pay it, but it can be a fair chunk of cash, so make sure you don’t forget about it and plan ahead.  Thankfully,  there is a concession for most first home buyers which is a great help, and a majority of first home buyers will not have to pay duty on their purchase if the price is $550,000.00 or less;
  • loan fees, solicitor fees, registration fees and insurance: all these costs probably do not come as much of a shock but it does not take much for them to add up.  A lot of first time buyers are not aware that pursuant to the terms of most contracts, they need to get insurance for the property on the next business day following the contract being signed.  If your savings have been cleaned out by paying the deposit you may struggle with the other costs.  The Queensland Government also charges a fee for registration of a transfer of property and these costs generally come out of your loan;
  • first home owner’s grant: the good news is that the first home buyer’s concession is still available in Queensland for new builds.  Subject to certain eligibility criteria, until 30 June 2018 you can receive $20,000.00 towards your purchase of a brand new home  (this is set to go back down to $15,000.00 shortly); and
  • outgoings and adjustments: at settlement, outgoings such as rates, water usage and body corporate levies will be adjusted on the final amount you pay.  Depending on the particular property and when you settle, this amount may be a little or a lot.

2.  What is in the contract

Putting in an offer on a place is usually in the form of a contract, so it is very important to have your solicitor look over a contract before you sign on the dotted line.  Once the contract is fully signed, it is often too late to make any changes unless the other party agrees.  Make sure you have a good think about what it is you want out of the property.  If you are planning major renovations do you need to know if the council is going to approve the changes you have in mind?  If you are building, are there any restrictions on what type or style of home you want to build that will not fit in with your plans?

3.  Searches matter

Searches are often underutilised by buyers in general.  They can seem like a big cost for a little return but the reality is that you might spend a couple of hundred dollars on searches that could save you thousands in the long run.

Having a building and pest inspection completed on the property (and including this as a condition in the contract) is a must if you are buying an existing house.  You do not want to find out about any nasty surprises after settlement.

4.  Do your homework

Make sure you do your research.  Knowing the area, your long term goals and the property values in the area are very important factors before you jump in and purchase your new home.  There are many things that are not covered by the contract, and which you should check out before you sign.  For example: what are the neighbours like? Does the property flood?  Is it affected by road or aircraft noise?  If you are buying a unit or townhouse, do you understand how community titles schemes work, and are you ready for community living?

5.  Be prepared

Time stands still for no one!  In Queensland, time is of the essence in contracts to purchase land.  This means that you may lose your contract, and possibly your hard earned deposit, if you are late with a condition or being ready for settlement.  The best way to avoid problems is to be prepared ahead of time, get on top of things early and engage a good solicitor to help you through the process.  Before or as soon as you have a contract in place, you should be speaking to a financier about a loan (having a pre-approval in place is often a good thing to do, but just be aware that banks may not give the final okay until they have completed a valuation on a property, which can take time).  Also, you should arrange building and pest inspections as soon as possible following execution of the contract.  Do not leave things to the last minute!

Buying your first home is a big commitment and is bound to be a little stressful, but it is all worth it in the end to have a place to call your home.  Using Miller Harris Lawyers for your conveyancing can help take a lot of the stress out of the process, and save you a lot of time.

For more information, contact Lauren Doktor.

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Buying a Franchise – 5 Top Tips

March 20th, 2018

Entering into a franchise arrangement and running your own business can be a very exciting time.  You receive the benefits of the established brand, and usually a well-documented operations manual to assist you to run the franchised business.  However, before you take that big step, consider my 5 Top Tips before entering into a franchise.

1.  Read the disclosure statement

Yes, this document has been provided for a very good reason, so you should read it.  Franchisors are required by law to give prospective franchisees a disclosure statement and the law prescribes what must be included in the statement.  Whilst the statement provides numerous pieces of useful information, I suggest you pay particular attention to the number of franchises that have been terminated in the last few years, whether there is any litigation that the franchisor is involved in, and carefully peruse the table provided by the franchisor outlining all estimated franchise costs.  The disclosure statement provides really useful and important information about the franchise – be sure to read it!

2.  Contact other franchisees

The disclosure statement also contains details of other franchisees operating the franchise in other territories throughout Australia.  Ring at least five other franchisees including the ones in the territories closest to you.  Ask them how their franchise is going, how much support they receive operationally, marketing-wise and in relation to training from the franchisor.  Ask them if they would enter into the franchise if they had their time again.  In my experience, this is often where you will receive the most honest and practical information in relation to the franchise you propose to purchase.

3.  Do a business plan and budget

A business plan is integral to the success of any business – especially a franchised business.  As part of the plan, consider your operating budget – this is often where other franchisees can assist, identifying costs of the franchised business that were not necessarily clear from the outset.  For example, how much did it cost to fit out the premises with the franchisors corporate branding, and what do they spend on marketing and training annually.

4.  Get the right advice

A lawyer and an accountant play an important role in advising a prospective franchisee before entering into a franchise agreement.  As professional advisors who have often read many franchise agreements, they are qualified to know when a clause is unusual or uncertain.  When advising my clients in relation to a franchise I provide a comprehensive review of the franchise agreement and draw to the attention of the franchisee any critical clauses and relevant dates.  Whilst a majority of franchisors are reluctant to agree to any changes to their franchise agreement, I always highlight changes that I would recommend be made to the agreement to benefit the franchise and encourage the franchisee to negotiate the proposed changes directly with the franchisor to save costs in the first instance.  I have found that franchisors of newer franchises are often more agreeable to discussing changes to a franchise agreement than those that are well-established.

Further, it is at this time, I would recommend the franchisee seek clarification from the franchisor in relation to any clauses that are uncertain or lacking in detail.  It is always best that a franchisee finds out this information before signing on the dotted line.

5.  Do not rush in

Entry into a new franchise or the purchase of an existing franchise is a big and often costly exercise.  Therefore, it is important that you do not rush into this decision.  It is vital that you complete your due diligence investigations in relation to the franchise and the business first, draft your business plan and budget, obtain independent legal and financial advice and spend a good amount of time reading the proposed agreement before you proceed.

For more information about franchise agreements, please contact Partner, Melissa Nielsen.

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Should I wait until I am divorced to update my will?

March 6th, 2018

The effect of separation vs divorce on a will

Last week over a latte, my friend and I were chatting about her recent separation from her husband and the need to update her will.  Alarmingly, she told me that she had heard that there was no point in doing a new will until her divorce had been finalised, as divorce would revoke her new will.  Given that she has young children, I stressed to her that this was incorrect and she should not wait another day to get her estate planning affairs in order.

There seems to be a misunderstanding about divorce and the appropriate time to update your will or do a new will.  Let me just stress to you that you should always have a current and up to date will in place.  Waiting for your divorce to be finalised is never a good reason to delay your estate planning.

What’s the effect of divorce on a will?

Part of what my friend had heard had some truth to it, but it was not the whole truth – so let’s discuss what the effect of divorce is on a will.

In Queensland when a person makes a will (“the willmaker”) and then later divorces, any provision appointing the willmaker’s former spouse as executor, trustee and/or guardian will be revoked and taken to have been omitted from the will.  Further, any gifts made in favour of the former spouse are automatically revoked upon divorce.  All other provisions in a will not relating to the former spouse, generally will remain valid and effective.

As divorce only revokes the provisions to your former spouse in your will and not your whole will,  you do not need to wait for your divorce to be finalised to prepare a new will (and I do not recommend that you wait).

Let’s use the example of Sally and James to illustrate the effect of divorce on a will.

  • Sally and James met in 1995 and married in 1996.
  • Sally and James had a daughter in 1997 and a son in 1999.
  • In 2000, a year after their second child was born, Sally and James decided that they needed to get their estate plan sorted and had wills prepared.
  • Their wills were reciprocal versions of each other’s, whereby they appointed each other as the executor in the first instance and then James’ dad, Michael as the backup executor (in the event that something had happened to them both).
  • Sally and James were also the sole beneficiaries of each other’s estates and then in the event that they had both passed, their children were to share equally in their estate.
  • In March 2012 Sally and James separated.
  • In June 2013 Sally and James divorced.
  • In 2014 Sally passed away. Sally did not prepare a new will upon separation or divorce, and therefore her 2000 will was the last will to be followed.
  • As Sally and James were divorced at the time she passed away, only the provisions relating to James were revoked, however the provision appointing James’ dad as the executor and gifting her estate to their children, remained in place.

Whist this example may seem reasonable to many of you, it is important to bear in mind that only upon a formal divorce will those provisions to a former spouse be revoked.

What happens if I am separated but not divorced?

For married couples, separation alone will not revoke a will. In Australia married couples must be separated for a minimum period of twelve (12) months before making an application for a divorce.  During the period of separation (which is sometimes many years) if you have an old, outdated will in place gifting everything to your former spouse, he/she will get just that, everything.

So using the example above, if we change the circumstances slightly so that in December 2012 Sally unexpectedly passed away (whist she was separated from James, but not yet divorced) then her existing 2000 will (in its entirety) will remain valid and James will be the sole executor and beneficiary of her estate.

What if I don’t have a will?

It is just as bad, if not worse, if you don’t have a will in place and you are recently separated but not divorced.  If you do not have a will in place and are legally married at the time of your passing, then under the rules of intestacy your former spouse will get a large portion, if not all, of your estate.

When should I do a new will or update my existing will?

A lot of clients prefer to hold off preparing a new will or reviewing their existing will until their divorce and/or property settlement has been finalised.  I do not recommend this.

Whist you might feel like you have 101 things to do and your life is chaotic, a new or revised estate plan should be at the top of your “To Do” list.

What other life changing events will affect my will?

Recent changes to the Succession Act 1981 last year state that the ending of a de facto relationship or civil partnership will also revoke the provisions to a former spouse in a will.  So even if you are not married, you should bear this in mind.

Marriage will automatically revoke a will*, unless the will is made “in contemplation of marriage”.    Again, in saying this, we do not recommend that you delay your estate planning until you get married.

If you are thinking about getting married in the future or are recently engaged, we recommend that you still get your wills prepared.  What we would do, to ensure that your wills remain valid before and after marriage, is draft a simple clause stating that your will is made “in contemplation of your marriage”.  This clause will prevent your will from being revoked.

I often find, especially for younger clients, that a lot of the time they still wish to make provisions for their siblings or parents even if they are getting married.  Especially if their parents have gifted them a sum of money or have provided a guarantee to assist them in buying their first home.  If they prepare a will making these provisions for family members and then later get married, and their will has not been made in contemplation of marriage, then these special gifts to family members will be revoked.

If this blog has piqued your interest and you have any questions about relationship changes and the impact on an estate plan, please do not hesitate to contact Bianca Stafford.

“Never leave that till tomorrow which you can do today”

– Benjamin Franklin


*It is important to note that marriage will not revoke the following provisions in a will pre-dating marriage:

 a gift to the person to whom the willmaker is married to at the time of the willmaker’s death;

  1. an appointment as executor, trustee, advisory trustee or guardian of the person to whom the willmaker is married at the time of the willmaker’s death;
  2. a will, to the extent it exercises a power of appointment, if the property in relation to which the appointment is exercised would not pass to an executor under any other will of the willmaker or to an administrator of any estate of the willmaker if the power of appointment were not exercised.

Information contained in this article is of a general nature only and is applicable to the current law in Queensland.  It is not intended to address the circumstances of any particular individual or entity.  Please note that the law in each state and territory may differ.  We recommend that you contact one of our experienced wills and estates solicitors to obtain advice about your individual circumstances.

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