Are you buying a new house or apartment?

The Home Warranty Insurance Scheme exists to protect purchasers (including subsequent purchasers) from incomplete or substandard building work, whether structural or non structural.

Some key items to be aware of with this scheme are:

Certificate of Insurance

A builder, developer or tradesperson must supply a Certificate of Insurance from an approved insurer. If you are an owner/builder and work was done within the previous 6 years, a Certificate of

Insurance is also required . However, the Certificate of Insurance is only required when the Contract price is $20,000.00 or if the labour and materials supplied is over the value of $20,000.00 (previously $12,000.00).

Policies before 1 July 2002

For policies issued before 1 July 2002 cover is provided for 7 years from the date of completion of the work or the end of the contract for the work, whichever is the later for loss arising from defective work.

Policies after 1 July 2002

In October 2011 the NSW Government passed a series of amendments to the scheme for policies issued after 1 July 2002. Previously the insurance cover for structural and non structural

defects was 7 years. Changes to this scheme now reduce the period for claims to 6 years for structural defects and only 2 years for non structural defects. The new statutory warranty periods came into effect on 1st February 2012.

Notifying Insurers

The October 2011 amendments also include a requirement to notify the insurer in writing for policies created after 30 June 2002 (even if you have verbally notified your insurer about making a claim). You will be allowed 6 months from 25th October 2011 to notify your insurer in writing.

There is a mechanism allowing a delayed claim may be made if you are able to demonstrate that you pursued the negligent party to rectify the problem and notified your insurer during the insurance period.

If your policy was issued before 1st July 2010 all claims must be lodged within 10 years of the work being completed.

If you're not sure were you stand in relation to an insurance issue, please do not hesitate to contact us at MBBF.

Who Will Decide For You If You Can Not Decide For Yourself?

Living busy lifestyles causes us to put “ think about planning ahead “on the back burner.

We take it for granted that we can make our own decisions about a range of issues, large and small that affect our lives. For more complex decisions we may seek advice from others but decide ourselves whether or not to follow that advice.

The important factors in this matter are:

CAPACITY

Capacity means that when making a decision you have the ability to: 

• Understand the facts involved
• Understand the main choices
• Weigh up the consequences of the choices
• Understand how the consequences affect you
• Communicate your decision

You must have capacity to make decisions about:

• Making a Will
• Buying or selling a property
• Taking out a loan
• Investing money
• Making a Power of Attorney
• Making an Enduring Power of Attorney
• Entering into a Contract

The law presumes adults have the capacity to make their own decisions until proven otherwise. However, if you do not have the capacity to make these decisions they will not be legally binding.

The capacity to make decisions can be affected by illness, injury or age. This loss of ability to make decisions may be total or partial. We may lose capacity to make any kind of decision or we may lose capacity to make more complex decisions. The loss of capacity may be temporary or permanent.

WHO WILL MAKE DECISIONS FOR YOU?

Have you thought of who will make your decisions for you if you do lose capacity? You can decide in advance who you would like to make decisions for you if you can no longer do so.

If you do not plan ahead and you lose capacity it will be too late to choose who you want to be the decision maker. Those who you love will need to approach the Guardianship Tribunal to be appointed your guardian.

THE TWO CATEGORIES OF DECISIONS

The law divides decisions into:

Financial decisions – which can cover dealing with bank accounts, transferring of money, paying bills, dealing with shares and buying and selling real estate.

Lifestyle decisions – these can be about where you live, what services you should receive, what medical and dental treatment you might need.

HOW CAN YOU PLAN AHEAD?

In NSW there are two special documents you can use:

• A General Power of Attorney
• An Enduring Power of Attorney

At MBBF we help people to understand the significance of these documents and assist them with their preparation. Making sure that your family members and yourself are prepared in the event of a loss of capacity.

Joint Ventures

I have been advising on business structures for 40 years.

I'm still dismayed how often when I am approached to advise on:

 -        Parties going into a joint venture, the party who is engaging me comes along with documents someone (including business, financial and legal advisers) have not covered the fundamentals resulting in little attention if things go wrong including one of the parties not fulfilling what was expected of them; and

-        One of the joint venturers finding himself in a structure and in effect powerless.

Very often the parties have resisted the advice too confident to be objective and circumspect to think about the fall back position.

I am quite happy to give pointers to anyone who's interested in advice on business structures .

Victor Berger

Early Intervention

Would it be better when you have a disagreement to be advised of all you should consider before you react.

In our experience the majority of disagreements are unresolved quickly and economically because of misunderstanding the background, motives and whatever else you may not have realised you need to take into account in how to deal with the subject. 


In our experience 80% of the time disagreements are resolved simply by how you discuss the subject with the other party/ies to the disagreement. As well the statistics show 95% of court cases are settled. While that is great  what a shame that all the expense, time and anxiety may have been able to be avoided.

Our practice has had a policy for decades of, what is now popularly called, early intervention. We have lots of experience.

The upside is considerable expense, time and anxiety has been avoided and what is more relationships less likely to be irreparably damaged.

Call us on (02) 9264 3877 for a free 30 minute consultation where we can set you on the right track.

Cooling-Off Traps

Last week we had some anxious moments for buyers for whom we were acting under a cooling off contract.

Our clients negotiated to buy a unit. They needed finance to be approved and even though they were borrowing very little their lender was being peculiarly careful and were quite slow in checking past tax records. It is unwise to exchange contracts without unconditional loan approval and at worst and, exchange under a cooling off is an alternative but recognising they had to pay the agent 0.25% of the purchase price and, if they did not proceed they would lose that. Our clients were persuaded by the seller’s agent and, in this case they had a buyer’s agent, that they should be confident all will be alright. They decided to proceed with a cooling off contract since we managed to arrange 10 business days cooling off so as to give them a better chance with more than usual time to get the approval.

As it turned out the 10 days passed and there was no approval. We were told that 1 more day would do it and we were able to get a 24 hour extension. Fortunately approval came through near the end of the extra day. We have prepared the relevant notice to terminate the contract in case of having little time to take action.

Cooling off has some traps:

•        Usually contracts allow 42 days to complete from the date of the contract and so often preparations to do the usual work on a purchase does not begin until the buyer decides to proceed. That often means 5 days later than normal. Sellers usually refuse to allow 5 extra days to complete.
•        In recent years lenders take the best part of 42 days to be ready to advance the money.
•        As contracts normally provide that the buyer must pay interest, usually 10% per annum, there is the risk that the time lost will end up causing extra expense as a result of this interest.

Planning ahead is important as well as having lawyers who have the foresight and experience to know the traps. For the little extra it costs to have an experienced lawyer, is it not good insurance against extra expense and anxiety that is usually associated with less trained and experienced practitioners to say nothing of the value of that lawyers reputation among his colleagues.

Call us on (02) 9264 3877 and let us tell you what we can do to provide you with worry free experience of one of the most important transactions in you life.

Protect Your Business

Your greatest competitors are often the vendor of your business or your former employees

We are often asked to give advice on both the sale of businesses and on contracts of employment. In our advice we draw our client’s attention to how the value of their business can be severely damaged by among other things:

• The person from whom they bought the business, who if there is no restraint, simply opens up nearby and competes directly for the customers of your business.
• Employees who can, if there is no restraint, simply stop working for you and commence business in competition. Even after you have spent considerable time and effort in training them. As well as, entrusting all of the information about your business to them.

It is important to protect your business against such competition by including suitable clauses in any applicable agreements?  Especially, as it is almost impossible to require such clauses to be included in agreements after they have been finalised. 

In the case of employees, if the employee has worked for you for some time before the subject is raised, it is unlikely you will then be able to implement the kind of terms that you need.

We typically advise that:

• There is no standard "one size fits all" clause;
• Every case is different and clauses must be modelled to suit each particular situation
• The shorter the clause, the greater the risk that the clause will not be of much help.

In our experience “Standard Documents” if they include anything on the subject include just a few short line provisions. We point that out to clients and even show them the type of clause that it refers to and at the same time show the client what is known as a “cascading clause” which is the recommended way to approach the matter. Unfortunately the vast majority choose nothing or at best a short form clause. They feel that a cascading clause will be found to be too challenging by the vendor or the employee. 

Unfortunately, we live in an age where both businesspeople and employees may look to make money out of the intellectual property or goodwill of others. Even where they have sold the business involved or are still employed by that business. 

The need to protect your goodwill and intellectual property, including customer details, is of great importance. Failure to protect these items can cause long lasting, if not permanent damage to one’s business. The High Court recently had the opportunity of considering this subject. The effect of its decision endorsed absolutely the approach we have taken with our clients for many decades.

Even if you have not included suitable terms in existing agreements, it will be worth discussing your position with ourselves. For two reasons:  

• It may well be possible to improve your current position to some extent. 
• You should be well prepared for the next time you need to implement protection for your business in the above circumstances.

 If the above has any relevance to your affairs, please do not hesitate to call us.

Mediation and Other Ways to Resolve Differences with Less Pain and More Gain

It has been the policy and practice of this firm to always consider ways of resolving differences between parties and continue to do so throughout the progress of cases we handle.

Life and its complexities have developed in every way and in every area of relationships and business. As a firm we have maintained our commitment to searching for ways to solve problems in the quickest and most economic way. We have continued developing and refining our skills.

Victor Berger has been accredited by mediation training and referral organisations ACDC and LEADR. He has been an executive member of the New South Wales Chapter of LEADR. As well as concluding a Masters in Law which included studies in International Commercial Dispute Resolution and Advanced Mediation.

Harry Freedman has been accredited by ACDC and as a Family Law Mediator.

Both continue ongoing education. They have also been instrumental in bringing judicial officers together to discuss expanding the role of mediation in the court system.

The result has been that:

Victor Berger has been able to use his skills in many areas including Commercial and Business disagreements;

Harry Freedman has also done the same in Family Law matters. Including many cases where colleagues have requested him to mediate between couples for whom they act.

The great benefit of mediation has been increasingly recognised across almost every industry and social group. State and Federal Attorney Generals now have this high on their agenda as a means of providing speedy and cost effective justice. The use of mediation is found in business, unions and the military services. As well as religious, community, social and indigenous organisations.

When compared to court proceedings, mediation can achieve significant goals without having conditions imposed by a third party. These achievements are also often made whilst preserving the relationships of the people involved. And all that on top of considerable savings in time and expense.

Mediation is available from a vast variety of people with an extraordinary range of skills. The majority, however, have no legal training. At MBBF, we have had the opportunity to exchange knowledge and experiences with a very wide range of mediators. 

This has led us to believe that legal training is, in fact, a very important ingredient in the majority of mediation cases. Trained lawyers are often better placed to:

• Quickly identify authentic obstacles to negotiations.
• Assess areas of genuine disagreement which are based upon misunderstood principles.
• Offer solutions which include services from non-legal entities, such as, medical and social  practitioners.

In our experience, for the majority of cases, the parties in disagreement are comparing their potential solution with that which a judicial body might deliver. They often need to be reminded of the pitfalls and uncertainties of legal proceedings, as well as the potential costs and delays involved.

At MBBF, we are glad to receive any enquiries, free of cost, regarding the potential for resolving disagreements of any kind. Even if you do not feel such disagreements involve legal questions.