Mortgages
Use this comprehensive and practical guide to prepare loan agreements, mortgages and guarantees for most of the transactions required in general practice.
The detailed commentary includes information on the formal requirements for identification of parties, execution, registration and enforcement.
Recent updates can be viewed on Obiter - our blog.
Some of the most popular precedents in this publication include:
- Notice to owners corporation section 22 notice
- Letter to discharging mortgagee requesting discharge
- Mortgage linked loan agreement
- Standard terms document - Registered memorandum AJ843928
- Acknowledgement of receipt of memorandum
- Authority to complete documents and satisfy requisitions
- Direction to pay
- No security loan agreement
- Letter to mortgagor's solicitor submitting documents
MATTER PLAN
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“ Commentaries ”
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“ In the legal profession the term ‘costs’ refers to the fees and other expenses a solicitor charges a client for their professional services and other payments that arise out of the provision of legal services, including disbursements such as court fees. Costs are one of the most heavily regulated ... ”
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“ Nature of disclosure1 Timing of disclosure2 ”
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“ Costs disclosure is not required in relation to certain clients, described in the legislation as ‘sophisticated clients’ or ‘government or commercial clients’ as defined by the relevant legislation to include clients such as lawyers, law firms, public companies, liquidators and government entities. ... ”
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“ Cost agreements are not always required although clearly as between the practitioner and their client there will be disclosure but without the need for formal compliance with the regulation. The limits are: ”
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“ In NSW & VIC there is a standard costs disclosure for fees under $3,000 which is included in the precedents. If the total legal costs in a matter (excluding GST and disbursements) are not likely to exceed $3,000 (the higher threshold), a law practice may, instead of making a disclosure under ... ”
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“ Knowing that clients are disinclined to read, sign and return cost agreements, the letter sending them usually provides that unless heard to the contrary the practice will assume agreement. There will almost always be a later opportunity to have the agreement signed. Of course, many practitioners ... ”
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“ Costs are remuneration for professional work when acting in the capacity of a barrister or solicitor. Payments to a practitioner for work which is not professional work, are not costs. Disbursements are payments made, or liabilities incurred in the course of practice and which the practitioner is ... ”
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“ Firms are required to provide an estimate of the total of costs, excluding GST and disbursements, and information on the impact of any significant change to these costs. A law practice must take all reasonable steps to satisfy itself that the client has understood and consented to the proposed ... ”
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“ What is a disbursement Disbursements are payments made, or liabilities incurred in the course of practice, and which the practitioner is bound to pay whether put in funds by the client or not; or payments which, by established custom and practice of the profession, the practitioner is bound to pay. ... ”
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“ A lawyer may request money on account of fees be paid into a trust account before the commencement of work. This is particularly so in criminal and other court matters where the inclination to pay may wane with an unwanted outcome. The funds may cover legal fees as well as disbursements and the ... ”
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“ The costs agreement will set out the billing cycle. Commonly a regular monthly billing cycle is adopted covering work undertaken during the previous month. ”
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“ A lump sum invoice is one which sets out a recital describing the legal service provided and a total amount. An itemised invoice is one which sets out in detail each of the legal services provided, the date they were provided, and the cost for each service. An itemised invoice allows for an invoice ... ”
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“ A law practice cannot charge for the time spent in preparing an invoice. A law practice cannot charge for the time spent in preparing an itemised invoice for a client who has already received a lump sum invoice. ”
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“ All bills should be accompanied by a written statement setting out the avenues that are open to the client in the event of a dispute and any time limits that apply to the taking of such action. Under the uniform law in NSW and VIC each bill or covering letter must be signed by a principal of the ... ”
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“ In 1991 the Australian Competition and Consumer Commission released guidelines to assist businesses in the withdrawal on one and two cent pieces. In the purchase of goods or services for cash, businesses were advised to round the final payment: ”
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“ – When to charge and how to charge Goods and Services Tax (GST) is a broad-based tax of 10% applied to most goods and services, including legal services. Businesses are required to register for GST if their turnover exceeds the $75,000 threshold. If turnover is less than $75,000 than registration ... ”
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“ Reducing fees can create good will but needs to be handled with care as some take offence to the implication that they cannot afford to pay for the work they have retained. It is also a hard won reality that comes from experience that people are inclined not to value any advice given for free. ”
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“ Credit terms are quite common and need to be clearly documented and administered. ”
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“ Notification of rights is a requirement in all states and is found in all example invoice precedents. If the client has not been advised of their rights in a costs agreement, then practitioners must advise the client of their rights at the time of issuing the invoice. ”
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“ Monthly accounting for work in progress is recommended in order to achieve target lockup days. If debtors are not followed up promptly cash flow reduces making it imperative to adopt a debtor’s policy for effective debtor control. All overdue accounts must be followed up promptly and repeatedly. ”
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“ When a retainer is terminated before completion, a practitioner may claim costs for the work done to the date of termination on a quantum meruit basis if: The client terminates the entire retainer; ”
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“ When there are costs owing to the practitioner from the client, the lawyer may retain possession of the client’s documents which are legitimately in the practitioner’s possession. However, the Australian Solicitors’ Rules specify that when a practitioner claims to exercise a lien for unpaid legal ... ”
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“ If a practitioner has an equitable charge over the client’s property incorporated into the costs agreement, ordinarily the practitioner could exercise that power in seeking payment of costs. However, general charges such as a charge over ‘all my estate, rights, title and interest in and to any real ... ”
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“ Sound financial management is absolutely critical to the success of the law practice. There is a high correlation between practices with poor financial management and increased probability of experiencing professional negligence claims. The link is clear. Principals, who do not manage their ... ”
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“ Methods of payment include: Credit card; ”
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“ All By Lawyers cost agreements include the following authority to transfer money to pay their invoices: Trust money ”
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“ Lawcover recommends that practitioners use the costs assessment scheme to recover costs. Instituting proceedings against a disgruntled client who refuses to pay an outstanding bill exposes practitioners to the risk of a cross-claim in negligence being filed. The advantage of the cost assessment ... ”
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“ The following outline of costs assessment was written for NSW but the procedure is similar in the other states. This publication will be expanded to cover cost assessment in the other states in due course. In the interim refer to the relevant State Supreme Court. NSW Procedure ”
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“ A client may be entitled to complain to the Legal Services Commissioner about a costs dispute. If the complaint is made after the law practice or client has already applied for assessment of such costs, the assessment will ordinarily be stayed until the complaint has been determined. Similarly, if ... ”
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“ Landgate Australian Financial Security Authority ”
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“ Conveyancing (WA) Business and Franchise (WA) ”
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“ Mortgages are a means whereby repayment for a loan can be secured over a real estate asset. Under old system title a mortgage is a conveyance of a property to a mortgagee with a covenant by the mortgagee to reconvey the property to the mortgagor upon repayment of the loan. Title is transferred to ... ”
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“ See the detailed commentary A brief explanation of the transition to E-conveyancing for information on transactions that must be completed electronically, transactions that can be completed electronically and the full timeline for implementation. See the PEXA Help Centre for detailed guidance on ... ”
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“ Taking good instructions The use of precedent Retainer Instructions ensures that all important issues are considered, instructions which cannot be contradicted later are recorded, costs discussed and the scope of the retainer clearly defined. ”
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“ As the Torrens system of registration guarantees title, Landgate must ensure that those selling, mortgaging or otherwise dealing with the land are in fact those shown on the Register as the registered proprietors. Witnessing ”
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“ VOI ”
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“ The National Mortgage Form is a national initiative that standardises the content and presentation of mortgages lodged for registration through all lodgement channels with land registries in participating Australian states and territories. Mortgagees and practitioners across all jurisdictions must ... ”
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“ The Registrar will not register a memorandum of common provisions which conflicts with the Transfer of Land Act or other relevant legislation, particularly in relation to default or the giving of notices. If drafting such a memorandum, it is prudent to include where necessary a qualifying phrase, ... ”
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“ Duty on mortgages and charges executed on and after 1 July 2008 has been abolished. Up to 30 June 2008, stamp duty was payable on a mortgage before the transaction instrument could be registered. ”
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“ Some 93% of the state of Western Australia is Crown land. A mortgage over a registered interest, such as a lease or sublease, in Crown land may be registered under the Transfer of Land Act. The mortgage is prepared as for a freehold mortgage on form M1 Mortgage. As with Torrens title land, the ... ”
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“ A second or subsequent mortgage has the same form as a first mortgage. Any number of mortgages may be granted over a property if the mortgagee is either satisfied that the mortgagor still retains sufficient equity in the property to support another mortgage, or is prepared to take another mortgage ... ”
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“ Under the Torrens system there can be no legal mortgage without its registration. However, once executed by the parties, an equitable mortgage comes into existence pending registration. There are variants of the equitable mortgage but in essence there are two types: ”
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“ A collateral security is one given in addition to the principal security and is independent of, but subordinate to, the principal security. A collateral mortgage, therefore, is a mortgage relating to the same debt as the principal security, often referred to as a primary instrument. The mortgage ... ”
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“ The National Credit Code replaced the existing state and territory based consumer credit codes with effect from 1 July 2010. It is found in Schedule 1 to the National Consumer Credit Protection Act. The National Credit Code has a broad effect on mortgages. Section 7 of the National Credit Code ... ”
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“ If one joint proprietor forges the signature of another joint proprietor, the lender's interest will gain the benefit of indefeasibility upon registration. The question that arises is indefeasible against what? If the documentation establishing the debt was also forged, the innocent party might not ... ”
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“ As from 30 January 2012 the PPSA legislation governs the priorities between competing interests. Security interests, formerly known as charges, are registered with the Personal Property Securities Register under the Personal Property Securities Act. Charges registered at ASIC before 30 January 2012 ... ”
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“ Under the Torrens system, registration gives priority. Priority is established on the basis of the time of lodging for registration. In relation to mortgages, the first mortgage registered takes priority over subsequent mortgages: s 53 Transfer of Land Act. However parties with an interest in ... ”
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“ A caveat is a warning on the original certificate of title that there is a claim lodged against the land. Its function is to preserve and protect the caveator’s rights. It does not itself confer a proprietary interest in the land, but prohibits the registration of a subsequent dealing which might ... ”
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“ Once the principal or secured sum has been repaid, and any other obligations fulfilled, the mortgagor has the right to have the mortgagee’s interest in the secured property discharged. The approved form, Discharge of Mortgage (D1), must be used for this purpose. It is then lodged, accompanied by ... ”
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“ Section 82 Transfer of Land Act contemplates that a mortgage or other encumbrances may be transferred if in the approved form. Timely notice of the transfer should be given to the mortgagor so that payments due under the mortgage are made to the correct person. ”
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“ Once a mortgage has been registered it can be varied but only in relation to particular aspects if the mortgage is extended at the same time. Section 105A of the Transfer of Land Act allows for an extension and the term must be extended by at least one day. If the extension is of a mortgage payable ... ”
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“ Every mortgage contains a power for the mortgagee on the mortgagor's default to sell the mortgaged premises or appoint a receiver. Sale is the usual remedy employed to recover the money owing. The default usually, but not always, relates to a default in payment of the principal sum secured by the ... ”
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“ In the case of a default under an old system mortgage or a mortgage registered under the Transfer of Land Act, the mortgagee is entitled, without going to court, to exercise the power of sale. This power arises in relation to: a mortgage, effected by deed, under s 57(1)(a) Property Law Act 1969; or ”
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“ Section 111 of the Transfer of Land Act gives the mortgagee the power to take possession of the secured property. The mortgagor may vacate the property voluntarily. If not, the mortgagee who wants possession will have to commence action to lawfully obtain it. Whilst it is not necessary to take ... ”
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“ Foreclosure is the process by which the mortgagee seeks to extinguish the equity of redemption and vest the mortgaged property absolutely in the mortgagee. The right to foreclose is a remedy which is a natural incident of both legal and equitable mortgages, including an equitable mortgage created ... ”
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“ The mortgagee’s duty to the mortgagor is to act in good faith in respect of the mortgagor’s interests. The mortgagee must act without fraud and without wilfully or recklessly sacrificing the mortgagor’s interests. This principle is set out in the High Court’s decision in Pendlebury v Colonial ... ”
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“ Once a mortgagee exercises the power of sale and sells the secured property, the proceeds from that sale have to be accounted for. Section 109 Transfer of Land Act sets out the following order of priority for payment of the proceeds of a mortgagee’s sale: First, in payment of the expenses ... ”
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“ A farm debt mediation scheme has been agreed between the Western Australian Farmers Federation and the Australian Banking Association, supported by the WA Department of Agriculture and Food. A committee has been established to assist with a voluntary mediation process to resolve farm mortgage ... ”
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“ It is not intended here to provide precedents for use in institutional lending or lending by organisations in the business of lending but rather to provide straightforward documentation for those many one-off occasions that money is either borrowed from or lent to clients. Various statutory and ... ”
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