WEBVTT - Things you've always wanted to ask a lawyer 0:00:14.840 --> 0:00:17.360 Hello and welcome to today's episode of The Money Puzzle. 0:00:17.400 --> 0:00:19.959 I'm your host James Gerard, standing in one more time 0:00:20.000 --> 0:00:23.320 for James Kirby in the last of our special focus series. 0:00:23.640 --> 0:00:25.680 This week, we're going to dive into the area where 0:00:25.760 --> 0:00:29.120 finance and the law meet head on. So get ready 0:00:29.160 --> 0:00:32.640 for that because legal things can impact your financial life. 0:00:32.800 --> 0:00:35.760 So from a state planning to superinnuation, to wills and 0:00:35.800 --> 0:00:38.760 a state asset protection, the decisions that you make today 0:00:38.760 --> 0:00:41.320 could have a big implication for your fair nature wellbeing 0:00:41.360 --> 0:00:43.879 into the future. So in summary, we're going to unpack 0:00:43.960 --> 0:00:47.000 how the law influences your finances and to do that, 0:00:47.200 --> 0:00:50.240 today's test has a wealth of legal experience, back dating 0:00:50.320 --> 0:00:53.559 two nineteen eighty four, which coincidentally is the year that 0:00:53.680 --> 0:00:56.880 this year's AFL Grand Final performer Katie Perry was born. 0:00:57.240 --> 0:00:59.880 Peter Kernan is a lawyer with Aubrey Brown Lawyers on 0:01:00.040 --> 0:01:02.240 Sydney's Central Coast, and he is well known and well 0:01:02.240 --> 0:01:05.120 regarded in the area. He acts as an honorary solicitor 0:01:05.200 --> 0:01:08.760 for local sporting and community organizations, including the local Life 0:01:08.800 --> 0:01:11.240 Saving Club, and is a board member of the Central 0:01:11.240 --> 0:01:14.600 Coast Disability Options and not for profit that provides support 0:01:14.640 --> 0:01:17.919 services for young people living with a disability. Peter Cernin 0:01:17.920 --> 0:01:20.400 from Aubrey Brown Lawyers, Welcome to the Money Puzzle. 0:01:20.920 --> 0:01:22.520 Thank you, James, pleasure to be here. 0:01:23.120 --> 0:01:25.640 As is the case with every episode, what we discuss 0:01:25.760 --> 0:01:28.319 is general advice and not to be taken as personal advice, 0:01:28.319 --> 0:01:31.400 and listeners should seek professional advice before acting on anything 0:01:31.440 --> 0:01:34.440 they hear. On today's episode, we're going to break up 0:01:34.480 --> 0:01:37.440 our discussion into different areas, so let's start by talking 0:01:37.440 --> 0:01:40.760 about property related legal matters. So the first thing I 0:01:40.760 --> 0:01:42.880 want to ask you, Peter, is that I've heard recently 0:01:42.880 --> 0:01:44.800 in the media about people being scammed out of their 0:01:44.840 --> 0:01:47.640 property deposits. How does this happen and how can people 0:01:47.640 --> 0:01:48.919 protect themselves from. 0:01:48.760 --> 0:01:53.720 This, James, have been an increased number of these settlements scams, 0:01:53.760 --> 0:01:58.560 as they're called. Hackers interposed themselves into usually some sort 0:01:58.600 --> 0:02:03.400 of email chain between people who are instructing solicitor or 0:02:03.440 --> 0:02:08.200 conveyancer to act on a property transaction. Often they just 0:02:08.520 --> 0:02:10.680 change one little bit of an email or one little 0:02:10.680 --> 0:02:13.160 bit of a number to enable them to then get 0:02:13.200 --> 0:02:17.320 into the financial aspects of the transaction, so posing as 0:02:17.840 --> 0:02:21.400 a party that's involved in that transaction and then being 0:02:21.400 --> 0:02:25.840 able to divert funds not just deposits, but often settlement 0:02:25.919 --> 0:02:30.280 funds too for the completion of that transaction. The reason 0:02:30.320 --> 0:02:32.600 that there's been an increase in these is, of course 0:02:32.600 --> 0:02:36.160 the increase in property prices, so the amount of money 0:02:36.200 --> 0:02:40.800 involved that makes an attractive target to hackers is more. 0:02:40.720 --> 0:02:43.120 Things done electronically these days. So we have that systems 0:02:43.160 --> 0:02:46.280 at PEXA where I thought maybe using that type of 0:02:46.320 --> 0:02:48.560 system to be less chance of this type of fraudulent 0:02:48.600 --> 0:02:50.640 activity happening, but still seems to occur. 0:02:51.120 --> 0:02:54.440 Yeah, the electronic workspace known as PEXA is where all 0:02:54.720 --> 0:02:58.280 conveyancing matters in New South Wales in particular, but many 0:02:58.280 --> 0:03:01.320 other states are carried out the days, and yes, there 0:03:01.320 --> 0:03:05.399 are lots of checks and balances in that system, and 0:03:05.520 --> 0:03:09.080 there has only been a very few number of PEXA 0:03:09.160 --> 0:03:14.040 related transactions where that's happened. The main main cause of these, 0:03:14.120 --> 0:03:16.600 or the main source of these appears to be from 0:03:17.000 --> 0:03:20.240 hacking by the real estate agents before it gets to 0:03:20.280 --> 0:03:22.320 the PEXA system. Got it. 0:03:22.360 --> 0:03:24.520 So what would you suggest for people, say they're a 0:03:24.520 --> 0:03:27.640 first home buyer, or maybe they're downsize in and haven't 0:03:27.680 --> 0:03:29.959 bought a sold a property for forty years are we 0:03:30.040 --> 0:03:32.880 talking about physically taking checks to real estate agents and 0:03:32.960 --> 0:03:37.080 conveyances big bags of cash? How do we sidestep the scam? 0:03:37.120 --> 0:03:41.320 Is here all potential options, James, for some of them 0:03:41.320 --> 0:03:44.000 are bit unlikely. I guess that the check thing might 0:03:44.040 --> 0:03:46.160 be possible, or a bag of cash maybe less. So 0:03:46.760 --> 0:03:50.280 it's again about being vigilant. Like all scams, it is 0:03:50.320 --> 0:03:53.080 making sure that you know who you're talking to, making 0:03:53.120 --> 0:03:56.000 sure that every single number that you've been provided for 0:03:56.160 --> 0:04:00.360 to transfer money to is correct, and that's verbally. In 0:04:00.480 --> 0:04:04.400 legal practice, we insist on when we receive account numbers, 0:04:04.440 --> 0:04:06.960 we make sure that there is a verbal discussion with 0:04:07.040 --> 0:04:10.600 that client and just to confirm that number and then 0:04:10.800 --> 0:04:14.560 we can carry out that transaction. The risks arise basically 0:04:14.640 --> 0:04:18.160 when people are put under pressure. For example, if things 0:04:18.200 --> 0:04:20.120 have been going along okay, and then all of a 0:04:20.160 --> 0:04:23.440 sudden there's this rush to get to an exchange of contracts, 0:04:23.480 --> 0:04:26.840 for example, and then you get flustered and people just 0:04:26.880 --> 0:04:30.480 don't pay enough attention. So it really is about paying 0:04:30.480 --> 0:04:34.039 attention and making sure that you know who you're talking to. 0:04:34.160 --> 0:04:36.120 And if you have to go to someone's office to 0:04:36.160 --> 0:04:38.520 make sure, then that's certainly an option. For you. 0:04:39.240 --> 0:04:41.920 Yeah, it rings a bell and resonates when you say 0:04:41.960 --> 0:04:46.120 that your team will call people when they've received instructions 0:04:46.320 --> 0:04:48.960 to confirm before payments we have made and receive. We do 0:04:49.040 --> 0:04:52.000 a similar thing in financial planning world, and that actually 0:04:52.560 --> 0:04:54.920 was important. It's happened a couple of years ago. One 0:04:54.920 --> 0:04:57.359 of our clients sent through an email or what we 0:04:57.400 --> 0:05:00.000 thought was their email, saying, Hey, I've just found a property. 0:05:00.000 --> 0:05:02.040 I need ninety thousand dollars out of my self managed 0:05:02.040 --> 0:05:06.240 super fund bank account transferred over to my conveyances trust account. 0:05:06.680 --> 0:05:08.840 And we have an internal control where we call our 0:05:08.880 --> 0:05:12.480 clients before we make withdrawals on their accounts or process 0:05:12.520 --> 0:05:16.679 it for them. And the difference was that the email 0:05:16.720 --> 0:05:19.760 address was one letter off or one extra letter. And 0:05:19.760 --> 0:05:21.960 when we rang the client, he said, what are you 0:05:22.000 --> 0:05:24.720 talking about. I'm in hospital my wife's son. Well, she's 0:05:24.760 --> 0:05:27.560 about to have surgery. And what happened was that that 0:05:27.600 --> 0:05:29.760 the hackers had got into his computer, and this happened 0:05:29.800 --> 0:05:32.000 about six months earlier, and they're just monitoring. They're just 0:05:32.000 --> 0:05:34.479 sitting there and looking at his schedule, understanding where his 0:05:34.520 --> 0:05:38.159 finances were, and saw that his wife had surgery planned 0:05:38.200 --> 0:05:39.839 at a certain date, he'd be out of the office 0:05:39.839 --> 0:05:41.600 for a week, and they thought he's probably not going 0:05:41.640 --> 0:05:43.760 to be checking his emails. That's the right time to strike. 0:05:43.839 --> 0:05:46.560 So they realized I was the advisor that made contact 0:05:46.880 --> 0:05:50.240 with the bogus email account and the bogus trust account 0:05:50.279 --> 0:05:52.280 details to send money to. But luckily we picked it up. 0:05:52.279 --> 0:05:54.640 When we called the client, he freaked out. We sort 0:05:54.680 --> 0:05:56.599 of put a freeze on his bank account for the 0:05:56.640 --> 0:05:59.200 super fund, and then he changed his email addressed and 0:05:59.240 --> 0:06:02.360 had his computer investigated and found that there was some 0:06:02.400 --> 0:06:04.200 sort of a hacker who's managed to have to find 0:06:04.240 --> 0:06:06.360 their way in there. So you can't be too careful. 0:06:06.600 --> 0:06:09.000 There is scary yeah, indeed, Well let's move on to 0:06:09.120 --> 0:06:11.520 buying property off the plan, Peter, what are the risks 0:06:11.520 --> 0:06:14.799 of legal risks if a developer doesn't deliver the property 0:06:15.160 --> 0:06:17.359 as promised. I've never bought a plan off the property 0:06:17.760 --> 0:06:19.960 off the plan, I should say myself, so I'm not 0:06:20.000 --> 0:06:22.599 too sure what happens if, say, the developer is late, 0:06:22.800 --> 0:06:26.440 if they promised you three bedrooms but there's only two bedrooms, 0:06:26.600 --> 0:06:29.480 can you cancel the contract you deposit back? And as 0:06:29.520 --> 0:06:31.440 a secondary question, I've heard about this inn called a 0:06:31.480 --> 0:06:33.359 sunset clause, but I'm not really sure what it is. 0:06:33.400 --> 0:06:34.680 Could you explain that one as well. 0:06:34.920 --> 0:06:38.000 Yes, I'll start with a second bit, James, because the 0:06:38.000 --> 0:06:42.039 sunset clause is very important in that whole discussion. A 0:06:42.080 --> 0:06:45.279 sunset clause or a sunset date is a period in 0:06:45.279 --> 0:06:48.080 a contract, usually a couple of years out from for 0:06:48.120 --> 0:06:52.000 a new build, and the obligation on the developer is 0:06:52.040 --> 0:06:55.480 to complete and hand over a for example, a completed 0:06:55.520 --> 0:06:59.440 apartment in accordance with the contract by that date. There 0:06:59.600 --> 0:07:02.960 is to be position where if that didn't happen, the 0:07:03.200 --> 0:07:06.440 developer could say, well, we've failed to meet the sunset date. 0:07:06.560 --> 0:07:08.520 We're going to terminate the contract. You can have your 0:07:08.520 --> 0:07:10.960 deposit back, but then you can go and sell it 0:07:10.960 --> 0:07:13.200 to someone else for a lot more. And so that 0:07:13.720 --> 0:07:17.920 was happening. So in December twenty nineteen some reforms came 0:07:17.960 --> 0:07:21.480 out from the New South Wales government, including the requirement 0:07:21.600 --> 0:07:26.120 to include firstly a disclosure statement in the contract setting 0:07:26.120 --> 0:07:28.960 out all the dates and all the ability of developers 0:07:29.000 --> 0:07:32.760 to terminate contracts and how the process worked in a 0:07:32.800 --> 0:07:37.520 single maybe two pages, with development consents and all the 0:07:37.600 --> 0:07:41.960 numbers that people can check easily, so that meant that 0:07:41.960 --> 0:07:45.040 the developers are under a little bit more obligation to 0:07:45.080 --> 0:07:48.600 give as much information to a purchaser as possible. So 0:07:48.720 --> 0:07:52.200 at that point you enter a contract and if the 0:07:52.320 --> 0:07:56.640 developer is unable to complete by the sunset date, the 0:07:56.720 --> 0:08:00.240 developer now has to approach the Supreme Court before he's 0:08:00.280 --> 0:08:03.000 able to terminate that contract. So in other words, the 0:08:03.040 --> 0:08:06.680 purchaser is protected because the Supreme Court will only give 0:08:06.720 --> 0:08:10.400 those sort of orders if there are exceptional circumstances so 0:08:10.440 --> 0:08:14.360 that the developer has been completely unable to complete that 0:08:14.440 --> 0:08:18.800 development due to things entirely outside of his control. So 0:08:18.840 --> 0:08:22.520 that can be various things that I think COVID might 0:08:22.560 --> 0:08:26.120 have worked for a while, but there are just generally 0:08:26.200 --> 0:08:28.760 there's not many cases that get there and that the 0:08:28.840 --> 0:08:30.480 developers are able to do that. 0:08:30.800 --> 0:08:33.760 Got it so that they can't intentionally delay the build 0:08:33.880 --> 0:08:35.839 because the property market's gone up by twenty percent and 0:08:35.880 --> 0:08:39.400 they want to effectively resell that property off the plan. 0:08:39.440 --> 0:08:41.280 And you mentioned New South Wales. Is it the sunset 0:08:41.280 --> 0:08:43.400 calls just the New South Wales thing or is it 0:08:43.559 --> 0:08:44.719 around the country. 0:08:44.480 --> 0:08:48.360 There are sunset dates in varying forms, but my understanding is, 0:08:48.360 --> 0:08:51.040 for example, in Queensland, they don't have this obligation for 0:08:51.080 --> 0:08:55.000 disclosure in these types of contracts. But I also understand 0:08:55.040 --> 0:08:57.280 that he is coming up there that I couldn't be 0:08:57.320 --> 0:09:00.160 sure about Victoria or elsewhere, but I think there are 0:09:00.240 --> 0:09:03.880 various pieces of legislation that are not dissimilar to them 0:09:03.880 --> 0:09:04.520 in South Wales. 0:09:04.559 --> 0:09:07.439 One got it, And then back to the first question 0:09:07.480 --> 0:09:10.120 around what happens if the developer doesn't deliver the property 0:09:10.120 --> 0:09:13.560 that they promised. One that I've seen commonly is where 0:09:14.000 --> 0:09:16.080 there was a say, a cast space or two cast 0:09:16.080 --> 0:09:18.240 spaces on tidle and now side by side, but due 0:09:18.280 --> 0:09:20.400 to reconfiguration of the basement, they've had to turn them 0:09:20.400 --> 0:09:23.320 into tandem so head to toe car spots, which are 0:09:23.440 --> 0:09:27.040 less desirable. So where there's things like that, some may 0:09:27.040 --> 0:09:29.480 be minor, there might be one or two square meters difference, 0:09:29.520 --> 0:09:32.640 maybe smaller, some of more major. What happens in these 0:09:32.640 --> 0:09:36.320 type of situations at that point when settlement's. 0:09:35.760 --> 0:09:40.120 Ready, there is in the vast majority of contracts a 0:09:40.320 --> 0:09:45.000 clause that says if the variation to the property, for 0:09:45.120 --> 0:09:49.520 example in floor space, is more than five percent, then 0:09:49.600 --> 0:09:53.480 they could resind. Now that's one issue, So if you 0:09:53.559 --> 0:09:56.080 again had a bedroom that was a certain size and 0:09:56.160 --> 0:09:59.520 it comes down by ten percent in size just that bedroom, 0:09:59.640 --> 0:10:02.719 then the overall place obviously comes down by that too. 0:10:02.800 --> 0:10:05.320 But the point is that you could resind that because 0:10:05.360 --> 0:10:07.559 it's not the size of the bedroom that you contracted 0:10:07.640 --> 0:10:11.640 by it, it does become more difficult when there the 0:10:11.720 --> 0:10:16.080 issues aren't just size wise, So the cases all revolve 0:10:16.120 --> 0:10:20.080 around whether you would have seated with that purchase. If that, 0:10:20.520 --> 0:10:22.719 for example, and you're using your example that it was 0:10:22.760 --> 0:10:26.480 a tandem instead of a side by side and you 0:10:26.520 --> 0:10:28.800 said we were there is if you can show the 0:10:28.840 --> 0:10:30.480 court that there is no way in the world that 0:10:30.559 --> 0:10:32.920 you would have purchased an apartment with a tandem car 0:10:33.000 --> 0:10:36.280 space and have reasons for that, whether it be mobility 0:10:36.360 --> 0:10:38.680 or the like, then the court will assist you in 0:10:38.960 --> 0:10:41.000 getting out of that contract or at the very least 0:10:41.040 --> 0:10:45.120 getting compensation. And it will all come down to what 0:10:45.920 --> 0:10:50.800 negotiations happen with the outset, would either developer or the agent. 0:10:51.400 --> 0:10:54.680 And again if there is a for example, you wanted 0:10:54.679 --> 0:10:57.199 the car space next to the lift and you were 0:10:57.240 --> 0:11:00.480 assured of that and it doesn't happen, then again another 0:11:00.559 --> 0:11:03.200 mobility question I guess is that would be a real 0:11:03.240 --> 0:11:05.760 issue for you, and therefore you don't want that apartment. 0:11:06.520 --> 0:11:10.040 So it's a matter of degree as to how much 0:11:10.600 --> 0:11:15.520 the contract contracted apartment, for example, differs from that which 0:11:15.559 --> 0:11:18.080 you thought you were going to get, and hues come 0:11:18.120 --> 0:11:21.320 into it that you the glossy brochures give a view 0:11:21.400 --> 0:11:25.040 that goes all a long way up over the other buildings, 0:11:25.040 --> 0:11:27.080 to the coast or whatever, and all of a sudden, 0:11:27.160 --> 0:11:29.400 the ultimate viewers of that you are at all. 0:11:29.480 --> 0:11:31.640 Right then when it gets to the point of choosing 0:11:31.720 --> 0:11:34.640 the ownership structure, so barely in mind, our listeners are 0:11:34.640 --> 0:11:36.560 all around the country, and some of them are all 0:11:36.600 --> 0:11:39.280 around the world. A lots of Aussie expats listen to this. 0:11:40.080 --> 0:11:42.040 There's options in your South Wales that I know of, 0:11:42.200 --> 0:11:44.240 But if they're different interstate, maybe you might want to 0:11:44.280 --> 0:11:48.320 just highlight that they may be different interstate around tenants 0:11:48.320 --> 0:11:52.520 in common versus joint tenancy ownership of property. So my 0:11:52.600 --> 0:11:57.400 understanding is that joint tenancy there's no identifiable percentage split. 0:11:57.440 --> 0:12:00.880 It's just joined wholly together. If one person dies, the 0:12:00.960 --> 0:12:04.800 surviving person takes that property one hundred percent. But tenants 0:12:04.800 --> 0:12:07.319 in common there's a percentage ownership, So it could be 0:12:07.360 --> 0:12:10.640 fifty to fifty could be thirty three, thirty three, thirty fourth, 0:12:10.679 --> 0:12:14.200 there's three people or whatever you determine that split to be. 0:12:14.440 --> 0:12:17.320 So I was curious around what's the default structure, is 0:12:17.360 --> 0:12:20.280 this a national thing? And any commentsal guidance you have 0:12:20.320 --> 0:12:20.960 around this. 0:12:21.400 --> 0:12:24.120 Well, I think you've almost answered your own question. Jatly, 0:12:24.559 --> 0:12:27.520 joint tenancy operates under the law of survivorship. Yes, the 0:12:27.600 --> 0:12:30.880 survivor will take and there will be a notice of death. 0:12:31.080 --> 0:12:34.360 For example, if a deceased joint tenant is there, then 0:12:34.559 --> 0:12:37.280 the surviving joint tenant will be able to transfer that 0:12:37.320 --> 0:12:40.959 property to themselves without stamp duty because that law of 0:12:41.000 --> 0:12:46.280 survivorship overrides any duty transaction. If, however, it's tenants in common, 0:12:46.320 --> 0:12:49.840 you're correct. They can be in any number of percentage shares. 0:12:50.360 --> 0:12:54.199 The front page of the new South Wales Standard Contract 0:12:54.240 --> 0:12:57.679 the Sale of Land has a capitalized box at the 0:12:57.679 --> 0:13:01.480 bottom which says joint tenancy. But you have a choice 0:13:01.559 --> 0:13:03.960 to tick a second box to have a tenants in 0:13:03.960 --> 0:13:07.920 common and then a further option to say what percentage shares. 0:13:08.000 --> 0:13:11.200 That that tendency in common is to be there quite 0:13:11.240 --> 0:13:14.240 often and you'd be well aware of this through the 0:13:14.280 --> 0:13:17.520 finance world is that there is often a requirement, often 0:13:17.559 --> 0:13:20.720 a request to have a one percent ownership of a 0:13:20.760 --> 0:13:23.680 party with a ninety nine percent to the other as 0:13:23.720 --> 0:13:27.880 tenants in common. And that's often just for asset protection purposes, 0:13:28.280 --> 0:13:30.480 so you can, but you can choose any number of 0:13:30.559 --> 0:13:35.120 percentages that you need to reflect the arrangement between the parties. 0:13:35.320 --> 0:13:35.600 Got it. 0:13:35.600 --> 0:13:38.920 So joint tendency is the default unless you elect otherwise 0:13:38.920 --> 0:13:41.800 for tenants in common. And is this to your knowledge? 0:13:41.800 --> 0:13:43.400 I know that you're more an expert in yourself Wales. 0:13:43.400 --> 0:13:46.760 But across the country, do they have a similar system. 0:13:46.920 --> 0:13:50.080 Yeah, they do because it's based on common law, that 0:13:50.160 --> 0:13:52.960 law of survivorship, so yes they do. The how it 0:13:53.000 --> 0:13:55.400 comes out in a contract might be slightly different, but 0:13:55.480 --> 0:13:58.720 the basic, the fundamental law behind it will be national. 0:13:59.240 --> 0:14:02.280 And I guess the tenants in common aspect is often 0:14:02.559 --> 0:14:05.960 for parties who are joining together to invest, for example, 0:14:06.280 --> 0:14:08.720 And there are other aspects of it in a state 0:14:08.760 --> 0:14:11.280 planning that can be useful. But but you're correct that 0:14:11.679 --> 0:14:14.520 New South Wales is a largely joint tendency to fault 0:14:14.559 --> 0:14:17.920 in contracts, but it's available in all other jurisdictions. 0:14:18.480 --> 0:14:21.160 Okay, Now, let's roll our sleeves up. We've got a 0:14:21.200 --> 0:14:26.560 theoretical property dispute around boundaries. So say we'll call him John. 0:14:26.640 --> 0:14:30.000 John wants to build a fence, but his neighbor Steve 0:14:30.160 --> 0:14:33.040 doesn't want to share in the cost so or doesn't 0:14:33.040 --> 0:14:35.640 want to help with the conveyance in. So how can 0:14:35.880 --> 0:14:38.440 John build this retaining wall that's in the risk of 0:14:38.480 --> 0:14:41.400 collapse in And what happens if there's one person on 0:14:41.400 --> 0:14:43.400 the higher side or the lower side. Does that make 0:14:43.520 --> 0:14:47.200 a difference, And just boundaries in general, because that can 0:14:47.320 --> 0:14:49.680 cause a lot of contention between neighbors. 0:14:50.200 --> 0:14:53.760 Yeah, the distinction you need to draw is between a 0:14:53.840 --> 0:14:57.760 boundary fense and a retaining wall. So in New South 0:14:57.800 --> 0:15:01.280 Wales again, and there are I'm aware of similar pieces 0:15:01.280 --> 0:15:04.200 of legislation in other states, so I'm sure that the 0:15:04.280 --> 0:15:07.960 law is basically the same with different legislation though. But 0:15:08.080 --> 0:15:11.560 in New South Wales the Dividing Fences Act deals with 0:15:12.160 --> 0:15:17.680 various definitions, and a dividing fence is basically a fence, 0:15:18.000 --> 0:15:21.960 whether it's made of color, bond, piling fence, whatever, just 0:15:22.000 --> 0:15:26.200 to divide two pieces of land. It can be exactly 0:15:26.240 --> 0:15:28.880 on the boundary or close enough, so it defines a 0:15:29.000 --> 0:15:33.440 distinction between the two different lots. A retaining wall is 0:15:33.520 --> 0:15:37.840 excluded from the definition of dividing fence unless it is 0:15:38.080 --> 0:15:42.680 supporting a fence. So in your example of higher and lower, 0:15:43.000 --> 0:15:46.080 if it's only supporting an embankment or a garden of 0:15:46.080 --> 0:15:49.560 a terrace or a pool or whatever, and it doesn't 0:15:50.240 --> 0:15:54.120 support an actual fence, so for example, it hasn't got 0:15:54.320 --> 0:15:58.280 fence posts secured into it, then it isn't covered under 0:15:58.320 --> 0:15:59.880 the Act and you'd have to deal with that. You're 0:16:00.960 --> 0:16:04.000 with the Dividing Fences Act. If you do have a 0:16:04.160 --> 0:16:07.120 need to make a dividing fence between you and your neighbor, 0:16:07.560 --> 0:16:10.040 then the idea is to go and get a quote 0:16:10.200 --> 0:16:13.080 and preferably too, and present those to your neighbor and 0:16:13.120 --> 0:16:15.360 have the discussion about what you want to put up. 0:16:15.840 --> 0:16:19.720 Then if that's agreed, then each party would contribute half 0:16:19.760 --> 0:16:22.280 the cost and off you go. The key to this 0:16:22.640 --> 0:16:24.960 type of discussion is not to just go out and 0:16:25.000 --> 0:16:27.320 do the fence and expect the neighbor to pay half 0:16:27.360 --> 0:16:29.760 when you've finished, because the Act won't give you any 0:16:29.800 --> 0:16:33.000 protection there. You'll be left with the whole cost. So 0:16:33.960 --> 0:16:36.960 if the neighbor, however, is difficult and just says I 0:16:36.960 --> 0:16:40.480 don't want a fence. Then the person who does want 0:16:40.520 --> 0:16:44.320 the fence needs to go to a local court local 0:16:44.400 --> 0:16:48.920 land board to get orders that the neighbor agreed to 0:16:49.080 --> 0:16:53.320 construct a dividing fence. Now a lot of disputes arise 0:16:53.360 --> 0:16:56.480 around what sort of dividing fence is going to be 0:16:56.520 --> 0:16:59.760 put there. So one party wants a five foot pailing, 0:17:00.120 --> 0:17:03.200 the otherland wants a fancy lapped and captain this, that 0:17:03.320 --> 0:17:06.679 and the other, or a color bond. Then there can 0:17:06.760 --> 0:17:09.399 be dispute about that. The Act says it's got to 0:17:09.400 --> 0:17:12.560 be a standard fence for the area, so that if 0:17:12.600 --> 0:17:17.200 you live in a subdivision that's got ninety percent paling fence, 0:17:17.720 --> 0:17:20.440 then you're not going to get much support from a court. 0:17:20.440 --> 0:17:22.920 If you want to put an eight foot color bond fence, 0:17:23.600 --> 0:17:28.240 it will be a general discussion about what is standard 0:17:28.240 --> 0:17:30.480 for the area, and you get to a point where 0:17:30.480 --> 0:17:32.720 you have to prove that by photos and the like 0:17:32.840 --> 0:17:35.119 to prove, and then a court has to decide whether 0:17:35.160 --> 0:17:37.840 they think that is or is a standard. Rural properties 0:17:37.880 --> 0:17:42.960 have another issue surrounding what is required on a dividing 0:17:42.960 --> 0:17:45.280 fence and what the use of the land is, so 0:17:45.520 --> 0:17:47.679 you know, do you need something that keeps cattle in 0:17:47.760 --> 0:17:51.119 do you not? Is it a full on post and 0:17:51.240 --> 0:17:53.760 rail which is very expensive, or is it just barb 0:17:53.800 --> 0:17:57.000 wire and a couple of star pickets. So there are 0:17:57.000 --> 0:17:59.040 all discussions that you need to have with your neighbor 0:17:59.080 --> 0:18:00.640 otherwise you can up in court. 0:18:01.600 --> 0:18:04.760 Lovely, very clear. I thank you, Peter. Now, before we 0:18:04.880 --> 0:18:07.120 move on and have a look at retirement and estate 0:18:07.160 --> 0:18:18.120 plan in, let's take a short break. Hello, and welcome 0:18:18.160 --> 0:18:20.280 back to the Money Puzzle. I'm James Gerard right, a 0:18:20.280 --> 0:18:22.520 contributor to the Wealth section of The Australian and also 0:18:22.600 --> 0:18:25.919 financial advisor with Financial Advisor dot com dot Au. And 0:18:26.080 --> 0:18:28.360 this week on the show I have Peter Kernan from 0:18:28.400 --> 0:18:31.800 Aubrey Brown Lawyers. Now, Peter, everyone tells us it's bad 0:18:31.840 --> 0:18:34.360 to die without a will, but is it really that bad? 0:18:34.400 --> 0:18:36.919 What happens if we do die without a will in Australia? 0:18:37.200 --> 0:18:39.320 How are your assets divided and who decides? 0:18:40.400 --> 0:18:43.000 Well, if you'll excuse the pun, James, it's not fatal 0:18:43.040 --> 0:18:46.000 to your estate planning, but it is certainly going to 0:18:46.000 --> 0:18:49.320 make life a lot more complicated in more cases than 0:18:49.359 --> 0:18:53.040 not to have a will will allow you to determine 0:18:53.080 --> 0:18:55.879 where your estate goes. If you don't have a will, 0:18:56.160 --> 0:18:58.000 there is a risk that it doesn't go to where 0:18:58.040 --> 0:19:02.160 you want, so the term is intestate. If you die 0:19:02.160 --> 0:19:05.159 without a will, you die and testate, then that brings 0:19:05.200 --> 0:19:08.760 in a pieces of legislation, being the Succession Act in 0:19:08.800 --> 0:19:12.880 New South Wales and they're very similar provisions in other jurisdictions, 0:19:13.400 --> 0:19:16.359 so that there is a statutory order. So if you 0:19:16.440 --> 0:19:20.439 pass away and your only living relatives are your parents, 0:19:20.800 --> 0:19:23.960 then they would share equally. Then it goes down to 0:19:24.240 --> 0:19:27.720 so it goes to spouse, children and then parents and 0:19:27.760 --> 0:19:30.119 then write down in New South Wales to a first cousin. 0:19:30.800 --> 0:19:35.680 But the issues arise it's largely surrounding spouses and children 0:19:35.760 --> 0:19:38.639 and determining who is a spouse and who is a child. 0:19:39.680 --> 0:19:44.200 So simple example of a bad result from not having 0:19:44.240 --> 0:19:48.320 a will is if, for example, a child died in 0:19:48.359 --> 0:19:53.920 a work accident and received a payout from an insurance 0:19:53.920 --> 0:19:58.000 company and didn't have a will and there were and 0:19:58.320 --> 0:20:01.040 didn't have any children, then it would go to the 0:20:01.080 --> 0:20:05.840 parents of that child. Now, if those parents are both 0:20:05.880 --> 0:20:08.520 living together and have been forever, then that's great, But 0:20:08.600 --> 0:20:11.120 if one parent hasn't been on the scene for ten 0:20:11.200 --> 0:20:14.199 years and hasn't spoken to that child, for example, for 0:20:14.280 --> 0:20:18.480 ten years, then it's certainly not ideal because that parent 0:20:18.520 --> 0:20:22.439 would share in half that insurance pay out without without 0:20:22.480 --> 0:20:25.199 any real knowledge of the child or any involvement in 0:20:25.240 --> 0:20:29.520 that child's life. That's just one pretty simple example. Then 0:20:29.640 --> 0:20:34.080 the other issues arise is, well, if you are a spouse, 0:20:34.280 --> 0:20:37.280 then you can still be a spouse even though you've separated. 0:20:37.760 --> 0:20:40.960 So you might have been separated from your partner for 0:20:41.160 --> 0:20:44.280 ten years just haven't got around to divorcing, then you're 0:20:44.320 --> 0:20:47.440 still a spouse. You can be in another relationship completely. 0:20:47.920 --> 0:20:50.840 If you pass away, then your ex spouse, for example, 0:20:51.119 --> 0:20:53.200 can share in your estate. If you don't have a will, 0:20:53.760 --> 0:20:56.639 then there's the other spouse related discussion is around to 0:20:56.720 --> 0:20:59.879 facto partners and proving that they are or are not 0:21:00.160 --> 0:21:04.960 a de facto partner. And once you've been together as 0:21:05.000 --> 0:21:08.000 a de facto partner for living together as man and 0:21:08.040 --> 0:21:11.080 wife for say two years, and or there's a child 0:21:11.160 --> 0:21:15.639 involved or child from that relationship, then it's likely that 0:21:15.720 --> 0:21:19.240 there is a de facto relationship. However, there are lots 0:21:19.320 --> 0:21:23.520 of cases where this hasn't been so clear where there's 0:21:23.560 --> 0:21:28.360 been periods of cohabitation, periods of breaks in cohabitation, and 0:21:28.480 --> 0:21:32.920 just generally more than one person potentially suggesting their de 0:21:33.000 --> 0:21:36.879 factos with the deceased. Then you have the children problem 0:21:37.080 --> 0:21:40.320 is determining who is a child, and there are often 0:21:40.480 --> 0:21:44.959 arguments about that and or children that may potentially come 0:21:44.960 --> 0:21:47.359 out of the woodwork where that to the other party 0:21:47.359 --> 0:21:50.320 doesn't know about this child, and so that's another risk 0:21:50.880 --> 0:21:56.280 and the having a valid will will do it's best 0:21:56.320 --> 0:21:58.480