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 News & Updates site.
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
Guides in this publication
MATTER PLAN
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“ Commentaries ”
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“ Contents ”
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“ In the legal profession the term ‘costs’ refers to the fees and other expenses a practitioner 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 ... ”
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“ Nature of disclosure6 Timing of disclosure7 ”
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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 New South Wales and Victoria 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 practitioner may, instead of making a ... ”
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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 practitioner will assume agreement. There will almost always be a later opportunity to have the agreement signed. Of course, many ... ”
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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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“ Practitioners 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 practitioner must take all reasonable steps to satisfy itself that the client has understood and consented to the ... ”
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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 practitioner may request money on account of fees be paid into a trust account before the work begins. This is particularly so in criminal and other court matters where the inclination to pay may wane with an unwanted outcome. Experience confirms that if a client is reluctant to pay such ... ”
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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, or when the WIP reaches a specified amount, whichever is the earlier. ”
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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 practitioner cannot charge for the time spent in preparing an invoice. A practitioner 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 New South Wales and Victoria each bill or covering letter must be signed by a ... ”
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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, registration is ... ”
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“ Reducing fees can create goodwill but needs to be handled with care as some clients may take offence to the implication that they cannot afford to pay for the work they have retained. Similarly, it may create an expectation that any future costs will be discounted. It is also a hard-won reality ... ”
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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, 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 a 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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“ NSW Land Registry Services NSW Participation Rules for Electronic Conveyancing ”
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“ Personal Property Securities 1001 Conveyancing Answers for NSW ”
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“ A mortgage is essentially a contract to secure the payment or performance of a monetary obligation on security of real property which gives the mortgagee a statutory ability to foreclose or sell on default. The mortgage is supported by a loan agreement between the parties. ”
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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. All mortgages and discharges of mortgage, regardless ... ”
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“ This publication does not intend 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. In particular, ... ”
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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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“ 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 mortgage must be supported by a loan agreement between the mortgagee and the mortgagor. The guide includes two loan agreements that may be used to record the creation of the loan relationship. The Mortgage Linked Loan Agreement is linked to the mortgage which incorporates the provisions found in ”
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“ Where a registered mortgage already exists, a subsequent mortgage will usually be referred to as a ‘second mortgage’. To register a second mortgage, the second mortgagee will need to obtain the consent of the first mortgagee, who will create and lodge a Third Party Consent via PEXA to allow the ... ”
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“ A collateral security is a security given in addition to the principal security, which is independent of, but subordinate to, the principal agreement. A collateral mortgage, therefore, is a mortgage relating to the same debt as the principal security, often referred to as a primary instrument, and ... ”
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“ Under the Torrens system there can be no legal mortgage without registration. However, once executed by the parties there is an equitable mortgage pending registration. There are variants of the equitable mortgage but in essence there are two types: ”
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“ A mortgage is ordinarily supported by a loan agreement which establishes how much money is owed by the borrower to the lender. However, some loan agreements are on an ‘all monies’ basis and seek to allow for further advances. These ‘all monies mortgages’ do not include a dollar amount of the debt ... ”
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“ The National Credit Code replaced the old state and territory based consumer credit codes back in July 2010. Today the code is found in Schedule 1 to the National Consumer Credit Protection Act. The Code has a broad effect on mortgages and s 7 stipulates the type of mortgages which are regulated ... ”
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“ Practitioners acting in mortgage matters must also ensure that they fully understand their obligations under the Legal Profession Uniform Law 2014. The regulatory framework applies to mortgage practices, rather than solicitor’s practices that occasionally receive instructions to act on a mortgage, ... ”
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“ The Farm Debt Mediation Act 1994 provides a compulsory mediation procedure before a farmer's creditors can take possession of property or exercise other enforcement acts under a farm mortgage. For a discussion of the legislation see: Craigie v Champion Mortgage Services Pty Ltd Craigie v Champion ... ”
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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. However, the mortgage will only be enforceable against the innocent party to the extent of the mortgage debt and so reference must be made to ... ”
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“ Personalty refers to personal property, as opposed to real property. The Personal Property Securities Register (PPSR) provides a national register for people wishing to register their security interests over personal property. The Personal Property Securities Act 2009 governs the priorities between ... ”
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“ The Torrens system of land ownership is based on registration of interests on a certificate of title that confers absolute proof of ownership. As some interests in land are not capable of being registered, the caveat system enables such interests to be endorsed on title so that, while caveat ... ”
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“ Part 7B of the Real Property Act 1900 allows a person who intends to lodge a dealing, to give effect to a legal or equitable interest in land, to lodge a priority notice. A priority notice is an optional notification lodged with the Registrar-General informing them of the intended registration of ... ”
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“ Once the principal or secured sum has been repaid, a discharge of mortgage can be obtained from the mortgagee. A discharge of mortgage operates to release the land from the mortgage security. The approved form must be used for this purpose and once it is registered the property ceases to be subject ... ”
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“ A registered proprietor may transfer an estate or interest in land by an instrument in an appropriate prescribed form. A mortgagee has an interest in land and therefore also has the right to transfer the interest under a mortgage. This is done by transferring the interest in the same way as when ... ”
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“ The terms of a mortgage may be varied and the variation may be registered. The amount and the term of a mortgage can be varied. ”
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“ Under the Torrens system, registration gives priority. Priority is established on the basis of the time of lodgement for registration. In relation to mortgages, the first mortgage to be registered will take priority over subsequent mortgages. However parties having an interest in property under ... ”
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“ A default usually, but not always, relates to a default in payment of the principal sum secured by the mortgage. A default can also relate to the performance or observance of the covenants contained in the mortgage and to be observed by the mortgagor. For example, the mortgagor may not keep the ... ”
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“ Unless the terms of the notice are complied with, the mortgagee’s power of sale is exercisable after the expiration of the notice period. In this regard, both the Real Property Act 1900 and the Conveyancing Act 1919 allow the mortgagor one month in which to remedy the breach. This period can be, ... ”
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“ Section 60 of the Real Property Act 1900 gives the mortgagee the power to take possession of the secured property. The mortgagor may vacate the property voluntarily however if they do not the mortgagee will have to commence proceedings for possession of land in the Supreme Court. The mortgagee will ... ”
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“ Section 61 of the Real Property Act 1900 sets out the procedure for foreclosure. This is a process by which the mortgagee becomes the absolute owner of the land free from any encumbrances and the rights of the mortgagor. This is not a simple procedure and is used as a last resort when all other ... ”
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“ Once a mortgagee exercises the power of sale and sells the secured property, the proceeds from the sale have to be accounted for. Section 58 of the Real Property Act 1900 sets out the order of priority for payment of the proceeds of a mortgagee’s sale: First, in payment of the costs charges and ... ”
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“ When finalising a matter, it is important to terminate the retainer. This informs the client in writing that all work on the matter is complete and that no further work will be undertaken unless the firm is otherwise instructed. If the matter is finalised in such a way that the client retains ... ”
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