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Australian Property Law Bulletin - May 2008 (Vol 22 No 9)

Australian Property Law Bulletin - May 2008 (Vol 22 No 9)

In the May issue: Can the breach of a non-essential term of a contract give rise to a right to terminate at common law?By Robert Savage and Garrett FlanaganThe breach of a non-essential term of…

In the May issue:

Can the breach of a non-essential term of a contract give rise to a right to terminate at common law?

By Robert Savage and Garrett Flanagan

The breach of a non-essential term of an agreement may now give rise to an entitlement to terminate an agreement at common law following the recent High Court decision in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd. The High Court held that if the breach of a non-essential term of an agreement is ‘sufficiently serious' or ‘goes to the root of the contract' or causes ‘substantial loss of benefit to the ‘innocent party, then the breach of that term will give the innocent party a right to terminate the agreement and may expose the defaulting party to a claim for damages.

Lessee's last-ditch stand fails to move High Court

By Prof W D Duncan and Prof Sharon Christensen, QUEENSLAND UNIVERSITY OF TECHNOLOGY

The High Court decision in Gumland Property Holdings Pty Ltd v Duffy Bros Fruit Market (Campbelltown) Pty Ltd [2008] HCA 10; BC200801842 considers a variety of important issues relating to commercial leasing for the first time at our highest appellate level. In particular, it reviews the law relating to the effect of making certain conditions essential, the rights of a transferee of the freehold subject to a lease to seek bargain damaged for breach of essential terms and the position of the guarantor of such obligations after that transfer.

Property and the GST: an update

By Allan Blaikie, Andrew Sommer and Kavita Benedict, CLAYTON UTZ

The application of the A New Tax System (Goods and Services Tax) Act 1999 (Cth) to real property transactions is complex and ever-changing. In recent months, there has been a proposed change to the margin scheme as well as significant decision in the Federal and High Courts which affect the way property developers should be structuring their affairs. This article provides a summary of the key decisions.

An agent's duties in taking a deposit

Prof W D Duncan, QUEENSLAND UNIVERSITY OF TECHNOLOGY

There have been many changes to real estate contracting since Jacobs J in Mehmet v Benson [1964-5] NSWR 766 said that a ‘normal deposit' was 10 percent of the purchase price. Due to the astronomical rises in residential house prices over the ensuing years, the ‘invariable' rule in many transactions is now that the deposit is limited to five percent of the purchase price, or paid by deposit bond or guarantee. The issue of the agreed amount of a deposit has arisen again in Markson v Cutler [2007] NSWSC 1515; BC200711919.

The role of real estate agents in the preparation of contracts

By Matthew Raven, GADENS

The role of a Queensland real estate agent in property transactions has turned full circle with the passing of amendments to the Legal Profession Act 2007 (Qld). Section 24(1) of the Legal Profession Act makes it an offence for a person other than an Australian legal practitioner to ‘engage in legal practice' in Queensland. The question arises as to what extent the real estate agents are able to participate in the preparation and exchange of sale contracts and other documents without stepping over the mark.

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