BSBCNV502 Interpretation Of Legal Documents Assessment Answer Part 2

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Question :

BSBCNV502 Assessment – Read and interpret a legal documents and provide advice

Conveyancers Act 2006

This is the legislation under which you operate. You should download a copy of this to your computer and you will find that it has an inbuilt hyperlink index that takes you to the exact section your need to read. The start of the act looks like this:

Version No. 011

Conveyancers Act 2006

No. 75 of 2006

Version incorporating amendments as at 24 August 2011

  • Answer the following fully.

Minimum word length: 300 words each answer

Refer to the Transfer of Land Act ss.40-44 and solve the following problems:

  1. Melbourne Water forwards an overdue rate notice to the new owner of the property. The settlement of the transaction adjusted (balanced the books) for the current rate year, but failed to deal with the overdue rates and penalty interest from a previous year. Does Melbourne Water have to find the vendor to claim the balance owing?
  2. A tax department officer wishes to prove in a court case that a taxpayer owns certain land. How can this be done? (Suggested word length: 300 words)
  3. Need a business operator renting a shop premises be concerned when the owner of the shop notifies him / her that a sale of the property will occur? Why? Protected by S42of the Transfer of Land Act
  • A vendor of land sold the property twice to different purchasers. The first purchaser, therefore, has an equitable interest in the land. The second purchaser, however, quickly settles the transaction and registers their ‘net interest’, even though they had heard from another person of the possible first sale. Who has the greater right? Why?
  • Sebastian is employed in the loans department of the Eastpac Bank, which has loaned $380 000 to Isabelle Francis to purchase a Torrens title property in a Melbourne suburb. Unfortunately, Isabelle defaults in her payments and Sebastian is instructed to exercise the bank’s rights as mortgagee. Sebastian wanted to impress the boss and suggests that foreclosure might be a good idea. Is this the best option? What does the law require in these circumstances?
  • What is another name for equity law, and how does it differ from statutory law?
  • Patrick and Anna are cruising one fine Saturday when they spot their ideal mansion for sale. They place a deposit and sign a contract for $2 million. All the way home, they make plans about renovations and additions. Their biggest plan is to add a top storey to the existing two-storey dwelling, to take in spectacular views over the nearby mountains. Their conveyancer rings them urgently the next week to advise that there is a restriction on the building dating back one hundred years, limiting it to two storeys. The surrounding land has since been developed into one-acre lots with complete and well-spaced housing. What can they do? Are they bound to accept this restriction? Explain in full.
  • Is payment of a deposit a requirement for a valid contract of sale? Explain.
  • Sect. 126 of the Victorian Instruments Act 1958 is relevant because it establishes the rule that a contract of sale must be in writing to be enforceable. Record a copy of the relevant section and do all contracts have to be written?
  • List the other professionals involved in the sale of land industry and their roles. 14 In simple language, explain ‘consideration’ in regards to a contract?
  • What would you do if you found a conflict of interest with a client? What is the policy at your organization?
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Answer :


  • Transfer of Land Act ss.40-44
  1. The schedule 7 and section 42 of the Transfer of property Act, states that parties have to pay for the delay payments certain sum of penalty amount in case any delay occurs from any party side. The case studies have shown that postponement of settlement is one of the major reason for the penalty. The condition of penalty is incurred only at the time when the party refuses to pay the settlement amount or intentionally creates circumstances not to pay the balance or due amount. (Giancaspre, 2017)  The vendor in case finds that the purchase is not interested in payment of the settlement amount then have right to impose penalty on the purchaser. The vendor is the party likely to face loss. The vendor have right to charge interest on the penalty amount if the penalty is not paid on time. The penalty interest rate act is being followed to determine the penalty interest; this may be varied according to the situations. In case the delay is due to any dispute or due to any party being part of the contract then it is a complex situation. In case the bank is responsible for delay, then the bank will pay the requisite amount.  In accordance with the section 44, as vendor is the one who has suffered loss due to late payment, the defaulter have to approach the vendor for payment of such specified delay amount. The purchaser is solely responsible for payment of the requisite delayed amount. 
  2. The common law states that the possession of the property or land is an integral evident and with it the possession of the documents referring about the title of the property or land shows that the property is charged as security. A certificate guarantying the title of the land instead of written deeds is considered as evidence of registration of title of deeds under the earlier laws. The registry book showing registration through certifying the owner about the registration and its title in the property. This is an evident and primary document for ownership title of land. The tax department and its officers use the registry book to find out the true ownership and title of any property. The document is part of the Torrens system.  The documents are not too complicated; instead reflect just the ownership and title of the property and acts as a certificate for the same. The documents are considered as legal and illegal depending on its registration and non-registration. The validity accounts only when the document is registered.  The property title certificates consist of folio number, volume, description of property or land any caveats or mortgages or encumbrances included in it. In Australia, Victoria, the land registry is designed in such a manner that conveniently converts digital formats and accomplish the process of registration through digitalization. Henceforth, it becomes easy to handle the title ownership and easy to recover the authenticity of the vendor statements.  The taxes authorities adopt several methods to ensure and examine the information given by the tax payer are true to their words and are verified. Following details like land description, volume and folio number and registered proprietor details helps to recover the true information about the property or land.  The legally obtained ownership certificate of any property is the prove of the ownership of the property.
  3. The party operating business on any property being that property is not registered under such person operating business, and then this is considered as leased property. The parties operate the business under the leased property based on several pre-determined and general terms and conditions inclusive of – (Landau,  & Marshall, 2018)

Condition 1 – the schedule should show the encumbrances or mortgages on the property if any.

Condition 2 - the vendor is the owner and thus responsible authority until the contract settles.

Condition 3 – the loan or borrowing undertaken should be as per conditions and terms.

Condition 4 – the details of contract are part of schedule and deposits are thus paid directly in the trust accounts. 

Condition 5 – all the parties of the contract are responsible for compliance of the contractual liability and obligations.

Condition 6 – the payment structures are pre-defined.

Condition 7 - in case of breach of contract, the party innocent would pay as compensation for the loss.

Condition 8 – the national holiday and any weekend holiday would shift to the next working day for payment settlement. 

Condition 9 – the table a mentioned in the Act is considered part of the contract.

Condition 10 – in certain circumstances, the general condition is overridden by the special conditions.

Condition 11 - the contract can replace any previous contract only when required.

Condition 12 – the post office services are given extra 24hours as delivery date.

Condition 13 – the transfer settlement needs are fulfilled through it, prior to 10 days before settlement and 3 days after the cheque is deposited in the bank.

The property can be sold by the owner at any time when thinks fit, but when the property is given on lease, the owner is not allowed to sell the property until the lease time gets over. The Victorian Instrument Act, as specified under section 125 states, any person being ownership right planning to sell the property have to mention in the public newspaper about the sale. The property in such case of sale is given to any lease holder, and then details of such lease need to be mentioned with other material terms and signed by all the parties.  When in circumstances of lease no defined period is stated in lease agreement, then no such approval from lease holder is required.  In case the lease holder interest is registered then in accordance with section 42, the approval is required.

  • Case study 

The first purchaser has rights upon the property depending upon whether the interest was earlier registered or not. In the given case study, the second purchaser just after settlement of the requisite payments and ensures that the property registered in his name. These actions were not taken by the first mentioned purchaser. The vendor of the property has given his right to the other purchasers. In case where the first purchaser had secured his rights through registration then he would have greater interest in the property.  This is regarded as caveat.  The real estate property needs to be sequestered not compulsory but based on the requirement and the benefits derived out of it.

  • Case study

The lender is also recognized as mortgagee, who has full right to recover the property and the due claims not been paid or defaulted by the mortgagor. The actions taken by bank to sell the property to recover the loss incurred due to nonpayment of the property. The bank have right to file suit against the mortgagor to recover the dues and violation of nonpayment of interest and other dues. The option should not be exercised in scenario where the mortgagor has valid reason and there are chances that he would pay it in certain time period. The idea given by Sebastian could be fruitful. 

The bank need to make request to court for eviction order to save the property, this will restrict the mortgagor to make appeal for loan modification. The dual tracking being illegal in terms of transfer of land act, 1958 the bank can seek court for the order to reduce the period of redemption of the mortgagor as the property is vacant.  In order to receive the good and standard price from the property auction, the mortgagee needs to be faithful and genuine.

  • Equity law

The equity law is also recognized as non-statutory law.  In simple terms, the equity law is regarded as certain legal principles that help the courts to determine the conclusions on fair decisions in circumstances when due to common law the parties face unjust. The equity law benefits through open minded and fair decisions where the strict appliance of judiciary laws treats any individual party or parties unfairly.  The equity law gives equal opportunity to every individual to narrate their facet story with full liberty so that fair pronouncement is the outcome of every case. 

The legislative body including central and state government is responsible for the statutory law while the equity law not derived from any such administrative body. 

  • Case study 

The case study can be solved by keeping following legal provisions and facts. The Patrick and Anna have not exchanged their property related decisions or documents and ask for advice of conveyance adviser and deposited the payment to the vendors account. And hence, it is considered to be their default. The document needs to be examining with regard of planning and Environment act 1987, to find out its reliability and relevance. This act is considered specifically before utilizing the property. The conveyance has negligently ignored the duty to make purchaser aware of all the regulatory actions and regulations before utilizing the mansion. 

  • payment of a deposit

As the case states, that the settlement has not been completed fully, the purchaser may seek to their conveyance for certain adjustments. The documents need to be acquired by the Patrick as it mentioned crucial points regarding their non liability at the time when they are not the owner of the property.  They have two options either to pursue to register their title in the property or to redeem their deposited amount with the help of caveat. 

The law states, that payment of certain amount as deposit would not amount to contract legitimately. The contract can be valid even on circumstances when the amount is not so paid or deposited. The consideration is an imperative part of any contract, in circumstances all the criteria are met other than the deposit, the contract is considered to be valid. 

  • provision 126

The provision 126 of the mentioned act, Instrument Act, 1958 clarifies that some specified documents need to be in written format to ensure its validity. 

  • List of professionals 

The conveyance is not the only professionals involved in sale of land contracts, there are other professionals too. 

The register, solicitor, the mortgage brokers, conveyances and so.  The real estate agents are very crucial for the industry and its operation.  In order to approve the licensing, they stand on behalf of the purchaser and the seller in any state.  The lack of knowledge is devastating hence; these agents undergo several training in order to perform the technical task with ease.  

The register envisages performing the legal registration process in the property industry.  The solicitors are one who investigates and examine the legal files and papers available at the legal departments of land. The property title is examined and authenticated by them through availing the title certificate. The encumbrances and mortgages are certain requirements that are examined associated with property. They help their clients to make them aware about the cost of taxes and interest for their client’s benefit.  (Course)\

  • consideration

The consideration is one of the imperative part of any contract to make it legally enforceable. The consideration is in form of future as the facility is availed on promise.  All the parties to the contract receive the consideration and benefits derived from the contract.  For example, A promises to transfer the title of the property in settlement to receive $500 for the same. Both the parties have received their desired value. There are other important parts of contract that are required to meet with along with the consideration. Where all the other things are met except the consideration deposited amounted, the contract is considered legal and valid. 

  • conflict of interest with a client

The commercial operator should discuss all the relevant conditions of the contract before undergoing the contract as it reduces and avoid the complexity.  The clients should know about the details of the contract they are entering into and their obligation to perform with regard with the contract. In case, any dispute arises between the clients, the clients should be communicated about their role and obligations that helps to resolve the dispute. They should communicate with their clients to let them known, how to deal with such circumstances. The parties can take following actions in case of disputes – (Alden, 2018)

The solutions of all type favorable or unfavorable to be discussed with the clients to come on conclusions.

The communication should be in simple terms and clearly exchanged.

The risk involved in the case should be discussed before taking any other actions. 

The communication exchanged should be written down or noted to avoid future disputes.