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 at Obiter - News & Updates, via the link above.
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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“ 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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“ Australian Securities and Investments Commission Australian Financial Security Authority ”
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“ 1001 Conveyancing Answers for Queensland Papers and Articles – Conveyancing and Property ”
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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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“ Mortgages, discharges of mortgage, caveats and withdrawals of caveat may all be lodged electronically. 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 ... ”
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“ Legal representatives are required to identify their clients in a number of circumstances. Although there are no formal requirements as a matter of good practice new clients should be identified, for example by sighting a driver licence or other common document. There are more formal requirements ... ”
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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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“ A mortgage is a totally fictional concept. It has no physical presence, and whilst it may be represented in a physical form by a document that is not necessary. It is a legal concept created to represent a form of proprietary interest recognised by the law. It arises when an owner of property ... ”
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“ The consequence of a mortgage of old system land is that ownership in law transferred to the mortgagee, subject to the right of the mortgagor to regain ownership upon repayment. This right was known as the equity of redemption. Whilst that is not the effect of a Torrens mortgage, where ownership ... ”
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“ An instrument of mortgage must be executed in the approved form: s 73 Land Title Act 1994. Assurances of land must be in writing: s 10 Property Law Act 1974. ”
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“ Whilst the common law insisted on the formality of a deed, equity was more prepared to examine the intention of the parties and enforce relationships as mortgages even if they did not achieve the formality requirements of the common law. Equity merely needed to be satisfied that the parties ... ”
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“ The simplest mortgage relationship involves two parties: the lender who provides the money and the borrower who receives it and gives a mortgage over their property. However a third party may become involved if the borrower, whilst receiving the money and promising to repay, has no property to ... ”
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“ As legal entities, corporations can enter into mortgages over property owned by the corporation. The risk for the mortgagee however relates to the execution of mortgage documents. A document that is fraudulently executed is a nullity at common law. A mortgagee who accepts a mortgage signed by ... ”
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“ Most documents establishing a trust will authorise the trustee to borrow for the purposes of the trust. It is beyond the trustee power and in breach of trust for the trustee to borrow for purposes other than the trust. A lender might not have notice of the existence of the trust and therefore not ... ”
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“ The National Credit Code (‘the 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 2009. The code has a broad effect on mortgages. Section 7 of the code stipulates the ... ”
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“ Even if one joint proprietor/borrower forges the signature of the other joint proprietor/borrower, the lender's mortgagee will become indefeasible upon registration. However the mortgage will only allow the lender to enforce against the 'innocent' joint proprietor to the extent of the mortgage ... ”
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“ As from 30 January 2012 the Personal Property Securities Act 2009 governs the priorities between competing interests whereby security interests, formerly known as charges, are registered on the Personal Property Securities Register (PPSR). Charges registered with ASIC prior to 30 January 2012 were ... ”
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“ A loan agreement does not of necessity require the payment of interest as it may simply require repayment of the principal sum. Generally interest is only payable if the agreement between the parties provides for the payment of interest. However s 78(1)(a) Property Law Act 1974 implies a covenant ... ”
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“ A mortgage is a contract. If the mortgage provides that repayment is to be on an ascertainable date, then that is the date for repayment whereby either early or late repayment will be a breach of the contract. Early repayment ”
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“ Legal costs In the absence of an agreement between the parties, the mortgagor is not liable to pay the mortgagee’s legal costs. However, most mortgage documents provide that the mortgagor will pay those costs. Costs will be on a party-party basis only, unless otherwise agreed, but may provide for ... ”
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“ There is absolutely no difference in the form of a second or subsequent mortgage. There may be any number of mortgages granted over a property. It is just a matter of whether the mortgagee is satisfied that the mortgagor still retains sufficient equity in the property to support another mortgage, ... ”
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“ Where there is more than one mortgage affecting a property, priority will be determined on the basis of time. In a Torrens environment it will be time of registration, with the first registered mortgage taking priority. If neither mortgage is registered, it will be time of creation, with the ... ”
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“ Mortgagees may agree amongst themselves as to the priority of their mortgages. If those mortgages are registered, they may lodge a variation of priority. A variation can only be registered in relation to registered mortgages. If one mortgage is not registered, a variation cannot be registered, even ... ”
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“ Section 82 of the Property Law Act 1974 effectively abolishes the general right to tack with the exception of the tacking of a further advance. A mortgagee may advance as much and as often as the mortgagee wishes to. The doctrine of tacking merely affects the priority that the mortgage will enjoy ... ”
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“ Marshalling equitable doctrine relates to realising of security when two mortgagees have security over assets of the mortgagor. If one mortgagee has security over two assets and a second mortgagee has security over only the first of those assets, marshalling allows the second mortgagee to rely on ... ”
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“ A mortgage creates a caveatable interest, so a caveat may be lodged. However, the power of sale can only be exercised pursuant to a registered mortgage, not a mortgage protected by caveat. ”
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“ Most discharge documents simply refer to the discharge of the land from the obligations under the mortgage. However, this does not necessarily constitute a discharge of the personal covenants that bind the mortgagor pursuant to the mortgage contract. See Industrial Acceptance Corporation Ltd v ... ”
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“ Like any other proprietary right, the mortgagee’s rights may be assigned to a third party. A transfer of mortgage is effected by the use of Titles Registry Form 1 Transfer. Notice to the mortgagor is not strictly necessary, but an assignee would presumably wish to advise of the assignment to ... ”
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“ The terms of a mortgage may be varied and the variation may be registered. Section 79 Property Law Act 1974 sets out what may be varied, including interest, amount, term or any covenant or provision of the mortgage. It is not possible to vary the parties or the property secured. ”
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“ A material alteration of a mortgage will invalidate the mortgage. If the alteration is authorised by some but not all of the mortgagors, it will be unenforceable against the mortgagor who did not authorise the alteration: Farrow Mortgage Services Pty Ltd (In Liquidation) and Anthony George Hodgson ... ”
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“ No action for recovery of money due under a mortgage may be commenced after 12 years from the date when the right to the money accrued: s 26 Limitation of Actions Act 1974. An acknowledgement of liability under the mortgage prior to expiration of the limitation period may extend that period: ... ”
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