Bucknells' Guide To Commercial Property Investment

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

Nigel Bucknell was originally a scientist. His wife Janet was a mathematician. Both are now successful commercial property investors, and clients of mine.

Their first investment was a small shopping centre. They currently have industrial, shopping centre, motel, caravan park and sporting centre investments.

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Two Into One Doesn’t Go? Not According To Cayzer Real Estate!

The advertisement produced by Cayzer Real Estate of Albert Park clearly states “Two car spaces”, and yet there is only one car space.

How can this be? Mr. Cameron Deal of Cayzer Real Estate's Albert Park office explained it to us. It would appear that where there is a single car space, and that car space is a little larger than normal, it may be possible to fit two cars into it. That makes it a two-car space, which then translates to two car spaces.

We’ll have to see if Consumer Affairs Victoria follows this line of reasoning.

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Some Legal Aspects of Commercial Property Investments

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

It is really all about contracts – purchase and lease contracts. (Your financing will involve contracts too, but that's another article.) Commercial property investors have to be savvy about contracts - and wary of laws that regulate just about everything. Engage experienced lawyers early, and ask them all about the contracts you will encounter. Heed the advice you get.

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Hon. B. N. ATKINSON (Koonung) – Please Check The Facts!

by Peter Mericka B.A., LL.B Real Estate Lawyer and
Qualified Practising Conveyancer
Victoria
Lawyers Real Estate

For the 3rd time now, the Hon. B. N. ATKINSON (Koonung) appears to have ignored the law, and followed a line of questioning that one could be excused for thinking may have originated in the offices of the REIV.

On Thursday 24 November, 2005 the member again queried the Minister for Consumer Affairs about the licensing requirements for those who sell real estate in Victoria.

The member has been emailed copies of the previous blog postings on this matter, but appears to have chosen to ignore the facts, and to concentrate on the agenda. We now have a question for the member: “Who is setting the agenda, and on whose behalf does he pose his questions?

It certainly appears that the Hon. B. N. ATKINSON (Koonung) may be representing interests that have little in common with those who wish to protect the interests of consumers. Again, we invite the member to properly inform himself on the matter. We will do our part in protecting consumers by sending the member a 3rd email.

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Subject To Finance...Or Subject To Difficulties?

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

Three recent and sad stories illustrate how real estate consumers can find themselves in unfortunate and costly circumstances. In each case seemingly uncomplicated purchase contracts, subject to finance, soon became subject to unexpected difficulties...

...The moral of these stories is that buying or selling real estate is rarely simple. Every sale or purchase involves a legally binding contract with serious obligations and scary implications. There is always the potential for every straight-forward matter to become complicated, and cause buyers and sellers alike considerable difficulties – to put it mildly.

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Is The Honourable Member Listening?

by Peter Mericka B.A., LL.B Real Estate Lawyer and
Qualified Practising Conveyancer
Victoria
Lawyers Real Estate

On Wednesday 23 November,the Hon. B.N. Atkinson (Koonung) again suggested that I require an estate agent's licence in order to sell real estate. And it appears that the Honourable Member has once again failed to do his homework; this despite my having emailed him a copy of my response to his incorrect assertion in Parliament on 16 November, 2005.

This time I will reproduce the letter I sent to Consumer Affairs 3 years ago, explaining the fact that a lawyer does not require an estate agent’s licence in order to sell real estate.

I hope that the Honourable Member can take the time to inform himself before he again suggests that action should be taken to stop my firm, Lawyers Real Estate, from providing consumers with the safest and most cost-effective real estate service in Victoria.

The contents of my letter of 30 October, 2002 to Consumer Affairs can be read by clicking on the following link.

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Google Base & Real Estate Marketing

by Peter Mericka B.A., LL.B Real Estate Lawyer and
Qualified Practising Conveyancer
Victoria
Lawyers Real Estate

The following is an item from the Central Virginia Real Estate News. Perhaps Google will take over as THE real estate website:

Google has just launched (in beta) their newest method by which they are seeking to catalogue the world’s information - literally. This information aggregation by one party makes me nervous. That said, for my clients’ best interest, I feel I must embrace it.

From their FAQ page:

4. What kind of information can I submit?

Remember, our goal is to organize the world’s information and make it universally useful and accessible, (bolding mine) and “the world’s information” certainly includes almost anything you might wish to contribute. We encourage you to submit your item, whether it’s your store inventory, collection of original poetry, or research paper on cancer receptors.

I have started to publish the properties that I am marketing in Google Base because it represents another method by with to expand the possibility that my clients’ homes will be seen by more potential buyers. Not all properties are there yet, as the process for uploading still feels a bit buggy; uploading .jpgs frequently brings errors saying that it does not recognize the file format, that I “need to upload a .jpg”! This is time-consuming and frustrating.

Limitations:

- simply too much information

- mapping aspects of Google are limited; identifying specific property addresses is not accurate. I have had to identify the properties with the town or the zip code rather than the actual property address.

- the search aspect is not yet refined. How can someone search for a three bedroom, two bath home with at least 1800 square feet on at least .3 acres in the Henley Middle School district?

- there is not yet a consistent search criteria used by all posters

- The search results (at least for now) seem to be too easily manipulated by bulk submitters.

Inman says:

The Web is your oyster if you’re a real estate agent marketing homes for sale. … While many observers say Google’s new service that looks and functions like a classified ad service is too young to make a big splash, it looks pretty scary for traditional newspapers that depend on classifieds to hold them up.

I think that Google Base will be another form by which to search for information, be it homes, land, refrigerators or cars. The integration with Froogle takes this service a step further. It’s too early to tell, but I will say this - I can’t remember the last time I picked up the yellow pages rather than go to switchboard or one of the local search sites.

A reader noted that I was the first in the Charlottesville area to have a listing in Google Base for real estate. Being first is one thing. Innovating to stay ahead of those who follow is another.

Don't Mention The Floods!

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

Remember the scene in the Fawlty Towers television series where hotel proprietor Basil Fawlty warns about a party of German guests? Fawlty’s first rule is: “Don’t mention the war.” He then confesses, “I did once, but I think I got away with it.”

“Don’t mention the floods” is the first rule of real estate any place where rivers and creeks occasionally overflow people’s homes. That includes many parts of Australia where the rule is rarely infringed. And agents get away with it.

Recently Australian Property Investor Magazine and the Gold Coast Bulletin each ran a series of articles of mine about flooding and real estate. Here is the Reader’s Digest Condensed Version...

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They're Talking About Us In Parliament

by Peter Mericka B.A., LL.B Real Estate Lawyer and
Qualified Practising Conveyancer
Victoria
Lawyers Real Estate

Maybe the Hon. M.R. THOMSON (Minister for Consumer Affairs) and the Hon. B.N. ATKINSON (Koonung) should have done some serious homework before they grappled with the perplexing (for some) issue of real estate licensing.

Neither of them seem to realise that lawyers in Victoria are "estate agents" by definition, and that real estate clients are covered by professional indemnity insurance and fidelity insurance.

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REIV Information Outrage!

How low can the Real Estate Institute of Victoria sink? The Real Estate Institute of Victoria (REIV) is now attempting to use the Privacy Act 1988 to tighten its greedy and monopolistic fist around information that should be freely available to the media and to consumers.

It’s high time the regulating authorities took a close look at the anti-competitive behaviour of the REIV.

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Free Cheese In the Mouse-Trap – Part II

Remember how an offer of a "free" real estate valuation turned out to be little more than a lead-generation vehicle for estate agents? (See "Free Cheese In The Mousetrap".) Well now we have the same for mortgage brokers.

The website of "FreeMortgageInfo.com.au" tells consumers, "Ever wondered what you can borrow? Find out in just five minutes!" But it tells mortgage brokers, "Wouldn't you love to start work on a Monday morning and be welcomed by an inbox full of emails from prospective clients?"

Seems there’s a variety of free cheese in that mousetrap.

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Enzo’s Hypocrisy – Estate Agent Tax

by Peter Mericka B.A., LL.B Real Estate Lawyer and
Qualified Practising Conveyancer
Victoria
Lawyers Real Estate

CEO of the Real Estate Institute of Victoria (REIV), Mr. Enzo Raimondo comes out with some amazing statements, but few compare to today’s piece of hypocrisy.

In The Age newspaper (Saturday 19 November, 2005 at p.11) Mr. Raimondo is quoted as complaining that property was the most heavily taxed sector of the state’s economy and that the government had become overly dependent on it for revenue.

Perhaps Mr. Raimondo should consider another unfair tax – the one levied by estate agents on real estate vendors. This tax is known as real estate agent commission.

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Estate Agents As Conveyancers - Regulators Take Note

by Peter Mericka B.A., LL.B Real Estate Lawyer and
Qualified Practising Conveyancer
Victoria
Lawyers Real Estate

We have seen in a recent posting that the Australian Institute of Conveyancers is lobbying to prevent real estate agents from offering conveyancing services. Not only is such a suggestion self-serving and anti-competitive, it is contrary to the interests of consumers.

In fact, estate agents should be required to take more responsibility.

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Property Investor Report

The impact of changing property laws


An article from the Jenman website.

Each state in Australia has its own property culture. The way contracts are issued and settled differs. The level of disclosure required by sellers and agents varies. Lots of differences, lots of changes and lots of confusion.

The costs of buying property also change in each state. A $400,000 purchase will cost you $6,500 in stamp duty in Queensland, $13,500 in Tasmania, $16,000 in South Australia and a scary $20,000 in Victoria. The Northern Territory, the ACT and Victoria have no stamp duty on mortgages, but the other states have varying imposts.

To make things harder, state and federal governments keep changing laws. It’s hard to keep up.

Continue reading "Property Investor Report"

Need To Dispose Of A “Dud” Property? Auction It!

This warning is prompted by the number of “dud” properties being screened off through our pre-contract advice service.

One was a property with “subdivision issues”, and another was weighed down by a covenant that required the owner of the property to refrain from objecting or inviting or assisting or financing any other person to object to the use and development of the neighbouring land (rather scary when they won’t let on as to what the proposed development is). We have also seen an auction contract that required the purchaser to assume responsibility for a legal battle that had been raging for over two years.

For vendors the auction is a quick and simple way to get rid of a “dud” property. For purchasers it’s an expensive lucky dip.

Bait, Crunch & Flip

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

How to "Bait & Crunch" Your Seller Client Before Re-selling For Your Mate, The "Flipper"

Last weekend a major daily regional newspaper ran a three-page feature about an outrageous “bait-and-crunch” on a vulnerable seller whose estate agent collected two quick commissions by helping a buyer mate do a profitable “flip”. Needless to say, this sort of real estate racketeering happens right across the nation every day of the week. Here is more or less what happened as boldly reported in the Queensland Times:

A woman seller lowered the sale price of her house in the face of her estate agent's demands, only to find the same agent re-listed it for her buyer within a fortnight of settlement at $10,000 more than her original asking price.

Continue reading "Bait, Crunch & Flip"

Don't Be A Real Estate Agent

The following is an item appearing in The Arizona Daily Wildcat. Although it is an article about the real estate industry in America, its predictions are very relevant in Australia - Peter Mericka (Editor Australian Real Estate Blog).

Don't Be A Real Estate Agent
by Ryan Johnson Arizona Daily Wildcat

(Ryan Johnson is a senior majoring in economics and international studies. He can be reached at letters@wildcat.arizona.edu)

"How many of you want to go to into real estate?" the English-accented professor asked one regional development course on the first day of class this semester. About half the hands went up.

Warning, warning regional development majors: listen up. You're about to go into an overcrowded field that has over the last two years become much more so. You're going into a field with bleak future growth prospects, and you're going into a field that is gradually being replaced by technology."

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Buyer Beware - Building Inspections

In his article in Domain, The Sunday Age 13 November, 2005 at p.4, Gary Lapersonne warns buyers to beware, as 28% of homes have illegal work. Lapersonne goes on to say, “Naïve home buyers could be slugged for costly repairs to illegal buildings – and possible more so in rural Victoria than in the inner suburbs.”

But any warning about illegal building works should also include warnings about estate agents, lawyers, conveyancers, building inspectors, the auction system and the drafting of sale contracts.

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A Share Trading Strategy for Properties

An article from the website of Oceanic Services

When investing in companies, investors have at their disposal many strategies to minimize risk and maximize profits. Can such strategies be utilized when purchasing properties?

John Hallandale, 33, recently purchased a house for $15,000. He paid cash for a double block of land with a dilapidated, inhabitable two-bedroom house in Queenstown, a mining town in central Tasmania. Due to its current condition, the property cannot yet be rented, so effectively, John is losing money.

Unconcerned, John views this property as the 'wild card' in a property portfolio mix akin to that of a competent share investor.

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Why Real Estate Skulduggery Is Easier In Queensland

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

When you buy a residential property in Queensland, the real estate agent must by law give you a Warning Statement. This is to be signed before you sign the contract.

“Do not sign the attached contract without reading and understanding this warning,” the Fair Trading statement says. “Do not sign if you feel pressured,” it adds.

But sellers get no statutory warnings. Unlike your buyers, you can’t cool-off. You are not told to first obtain independent legal advice or to get an independent valuation.

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Agent Demands Deposit In Return For Vendor's Statement

From Glenys Dolphin
Melbourne Solicitor
dolphinlaw@bigpond.com.au

I recently received an enquiry from a prospective client. He apparently inspected a commercial property in Coburg Victoria listed with an estate agency we'll call "Tomato Paste Realty".

When the client asked the real estate agent for a copy of the Section 32 Vendor's Statement the agent demanded payment of deposit moneys before handing over the Statement. The client dutifully handed over a cheque for $30,000.00 and received the Section 32 in exchange.

The client then showed the Section 32 to a friend who had once worked as a secretary in a law firm. The friend advised the client or used words to the effect that 'the wording in the S.32 did not seem right to her'.

When the client returned to the real estate agent he was advised that 'given you have received legal advice there will be no cooling off period'.

Needless to say after a heated argument the client received his cheque back.

Is The AIC Seeking Its Own Conveyancing Monopoly?

The Australian Institute of Conveyancers (AIC) is very vocal about a fair competition policy, noting on its website that it is "in the interest of consumers that all States permit conveyancers to compete fairly with lawyers". However, it would appear that the AIC is more interested replacing the lawyers' monopoly with one of its own, when its wish list of restrictions on conveyancing practice is carefully examined.

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When Can Lawyers Or Conveyancers Act For Both Parties?

by Tim O’Dwyer M.A., LL.B
Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

Whether someone acts for a buyer, a seller or both at once, I told the conference, conveyancing isn’t newsworthy until mischief occurs. But there is a real risk of newsworthy mischief, I suggested, if you act for both parties in the same transaction. "Say no every time to ’both parties’ conveyancing," I said, "because mischievous conflicts of interest can arise."

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BEWARE - Incompetent Mortgage Brokers

In two days, and in two separate matters, we have had to deal with incompetent mortgage brokers who have offered what amounts to legal advice to our clients.

Consumers should take care when mortgage brokers try to involve themselves in legal matters, as the consequences can be horrendous.

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$675 An Hour - Nice Work If You Can Get It!

In his book "Real Estate Without Agents" real eastate author Terry Ryder calculates that an estate agent selling a property valued at $450,000 is likely to earn a notional hourly rate of $675 per hour.

Here's how that figure is calculated.

Estate Agent Protects Consumers From Lawyers

As regular readers of this blog are aware, I am a harsh critic of those in the real estate industry who exploit consumers. My main targets to date have been real estate agents, unlicensed conveyancers, and the lawyers who support those of them who rip off the clients who trust them.

But this time I am forced, by an estate agent, to scrutinise lawyers who appear to have joined the ranks of those who want to take advantage of the naiveté of real estate consumers.

A copy of this posting will be emailed to the Law Institute of Victoria and to as many lawyers and estate agents as possible. Let’s see how the industry responds.

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Real Estate V. Stock Market : the Heavyweights Champ!

By Luigi Frascati - Canadian Real Estate Agent, Vancouver British Columbia.

luigi@luigifrascati.com

There are out there essentially three places where you can stack up your hard-earned money: the stock market, real estate and under your mattress. If you decide to put the money under your mattress, beware: it will fruit no interest and, hence, it won't grow over time. In fact, it will devaluate.

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In NSW Dummy Bidders Now Face $55K Fine

From domain.com.au

"Tougher dummy bidding laws were introduced to the real-estate industry last weekend on one of the year's busiest auction days last Saturday."

But contrary to what Fair Trading Minister Diane Beamer suggests in the article, we do not believe that increased penalties enhance consumer confidence in auctions or the real estate industry. Should any consumer have faith in a system where higher penalties are needed?

(See the full story at domain.com.au)

The Do's & Don'ts of Home Buying

by Tim O’Dwyer M.A., LL.B Queensland Solicitor & Consumer Advocate
watchdog@argonautlegal.com.au

(A shorter version of this article appeared in the Courier Mail)

You change from a home-hunter into a home-buyer when you find a house you like and can afford. This very moment of transition, however, is when you are most vulnerable to the tricks and traps which abound in the world of real estate.

Most real estate salespeople get paid only when a sale is made, so they always want legally binding contracts signed as soon as possible.

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