PPSR – Time may be running out to extend your registration.

PPSR – Time may be running out to extend your registration.

The Personal Property Securities Register (PPSR) commenced operation on 31 January 2012.

The default registration period starts at 7 years or less, and is the cheapest option when registering a security interest on the PPSR.   What this means is that 7-year registrations will begin to expire from January 2019.  If you were one of the early birds and ensured you had registrations from the commencement of the PPSR, then your PPSR registrations could be due to expire from January 2019.

What happens if I don’t extend my registration

Failure to extend a registration (that is still required to secure personal property) could result in a loss of priority to later security interests.  This is because expired or lapsed PPSR registrations cannot be renewed.  If a registration lapses then a new registration will be required in order to protect the interest in the personal property.  However:

  • the new registration may not have the same priority as the previous registration; and
  • if the grantor of the security interest is a company, then in the event that the grantor company becomes insolvent within 6 months of the new registration, this new registration may vest in the company and the security holder will lose their security interest.

How can I make sure my PPSR registration continues to protect my security

A PPSR registration may be extended, provided that the extension occurs prior to expiry or lapsing of the PPSR registration.  You can undertake a free search using the PPSR search tool to determine if your PPSR registrations are due to expire in 2019 and need to be extended.  This search tool is available from https://www.ppsr.gov.au/registrations-due-expire-report.  This will identify those security interests due to expire from January 2019.  You can then decide whether those registrations require extension or may be due to be discharged.

What can JHK Legal do to help

At JHK Legal we can:

  • assist you in undertaking the necessary searches to determine whether you have any registrations which are due to expire in 2019; and
  • assist you in amending your PPSR registrations as necessary, including extending any registrations which are due to expire.

JHK Legal can also assist you with:

  • registering new security interests
  • providing you with advice in respect of your existing securities, to determine if they are adequate
  • reviewing your terms of trade or other documents relating to the goods and services you provide in your business, to work out if you are able to register security interests (you may not realise you have invalid registrations).

Please contact one of our friendly commercial lawyers to discuss how we may help you.

Senior Associate, Alison De Marco LLM, Acc. Spec. (Bus.) – Qld

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1 January 2019 is coming – Employers Casual Conversion Obligations

What is casual conversion

Casual conversion occurs when a casual employee, who meets certain criteria, may request a permanent position (either full time or part time) after a certain period of being employed in their casual position.

Who does it affect?

Casual employees employed under a Modern Award and their employers.  This includes casual employees employed by labour hire employers.  From 1 October 2018 a model “conversion term” has been included in Modern Awards.  If your casual employee is covered by one of the Modern Awards then the casual conversion clause will apply to that employee.  Most employees are likely to be covered by a Modern Award.

The clause does not mean that employers must offer permanent employment to eligible casual employees; rather it has the result of giving eligible employees the right to request conversion to permanent employment.

Not all employees entitled to request casual conversion will do so however if they do then employers must comply with their obligations in respect of casual conversion.

How does it work?

The casual conversion clause sets out the steps which must be taken by both employer and employee in respect of casual conversion however in summary:

  • To request casual conversion:
  • the employee must have worked for the employer for a period of 12 months or more (in most cases); and
  • the employee must, over the preceding 12 month period, have worked a pattern of hours on an ongoing basis, which they could continue to perform as a full time or part time employee, without significant adjustment.
  • Employees engaged for short periods and/or who work irregular shifts or hours will not meet the criteria to convert.
  • The right to request conversion is a continually exercisable right while an employee has worked the relevant pattern of hours “in the preceding 12 month period”, which means if a casual employee’s hours become regular for the required period before the request then they have acquired the right to request conversion.
  • A request for casual conversion by the employee to the employer must be in writing.
  • Employers can reject a request, provided that there has been consultation with the employee and there are reasonable grounds to do so based on facts which are known or reasonably foreseeable (for example, where the casual employee’s position could cease or the hours could significantly change).
  • An employer’s refusal must be put in writing with the reasons set out clearly.
  • If the employee seeks to challenge the employer’s refusal, then this will be resolved through the dispute resolution provision of the Award.
  • If a request is granted, it:
  • must be discussed and recorded in writing; and
  • will begin at the commencement of the next pay cycle.

What Do I have to do?

If you are an employer and have casual employees covered by a Modern Award then:

  • you must give all casual employees (not just regular casual employees) a copy of the conversion clause (which applies to their particular Award as there are some differences) within the first 12 months of their first engagement; and
  • for casual employees already employed as at 1 October 2018, employers must provide them with a copy of the conversion clause by 1 January 2019.

Failure of an employer to comply with the obligation to provide the conversion clause to their casual employees is a breach of the Fair Work Act.

Some of the Modern Awards with casual conversion clauses which have widespread coverage include:

  • Banking, Finance and Insurance Award 2010
  • Cleaning Services Award 2010
  • Clerks – Private Sector Award 2010
  • Fast Food Industry Award 2010
  • General Retail Industry Award 2010
  • Professional Employees Award 2010
  • Restaurant Industry Award 2010
  • Security Services Industry Award 2010
  • Storage Services and Wholesale Award 2010

How can JHK Legal help?

JHK Legal can help by:

  • advising you on the requisite conversion clause applicable to your casual employees
  • reviewing your employment agreements to ensure they are compliant – and for new casual employees include the required casual conversion clause
  • assisting you in reviewing any requests for casual conversion from employees and advising you on your obligations and rights as an employer
  • preparing compliant documentation to record any causal conversion matters in accordance with the requirements of the Awards (there are slight differences in the obligations in some of the Awards) including preparing responses and conversion documentation
  • assisting you generally with your employment matters.

Senior Associate, Alison De Marco LLM, Acc. Spec. (Bus.) – Qld

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STOP! Don’t sign your Contract for Sale of Real Estate before having it Reviewed by a Properly Qualified Lawyer

It is common practice for real estate agents to negotiate between parties looking to buy and sell property.

As a result, most people are unaware of the importance of having a properly qualified lawyer review a draft contract of sale and provide advice in relation to the terms of the contract before it is signed by the parties.

Commonly, a real estate agent will obtain a buyer’s signature on a contract and submit it to the seller. By doing so the buyer makes an “offer” to the seller. The seller accepts the “offer” by countersigning the document and a legally binding contract is formed. Often, it is only at this point that the parties obtain independent legal advice in respect to the transaction.

Contract terms

Real estate contracts establish the property to be transferred, the financial obligations of the parties and outline the timing and key terms of the transaction.

Great care must be taken in the drafting of contract terms to ensure the terms have the intended effect.

Special conditions

It is not uncommon for parties to have specific and individual requirements when buying or selling property. A standard contract of sale is not tailored to reflect the specific requirements or circumstances of the parties (or the property) and special conditions are often required to reflect this.

It is extremely important to ensure all special conditions are properly drafted. It is quite common for ambiguous and poorly drafted special conditions to make their way into contract documents. An inadequate special condition may lead to confusion, disputes between the parties and possibly even litigation.

Examples of special conditions often included in contracts are:

  • purchase of property subject to the buyer’s sale of existing home
  • seller renting back the property from the buyer for a period of time
  • seller being required to undertake repairs or remove items from the property before completion.

Failure to adequately draft special conditions could result in disappointment for the parties to the contract.  Unless properly drafted, an incomplete special condition will not delay settlement – and the disappointed party may be put to unnecessary or fruitless expense in trying to pursue the other party after the main transaction (the purchase or sale of the house) is finalised.

Don’t Forget:  After the parties become legally bound to the contract, any changes to the contract’s terms need to be agreed by BOTH parties.  It’s not easy to fix a deficient contract after the fact, therefore obtaining advice before you sign is extremely important.

Deposits and Instalment contracts

In Queensland, it is standard practice for a deposit to be paid in two instalments. However, the total deposit paid must not exceed 10 percent of the purchase price for an existing lot (or 20 percent for an off the plan lot).

If the total monies paid to the seller before settlement exceeds the prescribed amount an instalment contract may automatically arise (even if the parties did not intend to create one).

Instalment contracts are governed by different laws and significantly change the relationship between the buyer and seller. They can severely impact a seller’s right to terminate a contract (even if the buyer defaults), restrict the seller’s right to deal with the property and effect the timing of payment of transfer duty (and have many other consequences).

Instalment contracts may also arise with respect to clauses providing for non-refundable deposits or the early release of deposits to the seller before settlement. Accordingly, legal advice should always be obtained before including these clauses in a contract.

Examples of situations where MKP Property Lawyers has been able to assist sellers and buyers

  • MKP drafted special conditions on behalf of a buyer to ensure that large items of rubbish on the property were removed prior to completion.  If the seller failed to comply by settlement, the buyer was able to delay settlement or have a reduction in the purchase price to allow for the removal of the rubbish.

It may come as a surprise that, without the special condition, in most cases a buyer would not be able to require the seller to remove the rubbish prior to settlement or delay settlement until this was done – unfortunately, the standard form contract of sale in Queensland does not allow for this.

  • MKP prepared a special condition for a seller who only wanted to sell their property if their purchase contract settled at the same time.  MKP was able to draft suitable conditions that made the sale of the seller’s property subject to the simultaneous settlement of their new property purchase.
  • The standard REIQ contract places the responsibility of risk on the buyer.  For example, if a storm damages the property prior to settlement the buyer is responsible for the repairs.  This is why the buyer must take out insurance over the property by the first business day after the contract date. However, in some circumstances this may not be suitable (for example if there is an unusually long settlement period and the buyer would incur significant costs insuring a property that the seller was still living in). MKP has assisted many buyers in preparing special conditions to address this issue.

How we can help

Many people find the process of buying and selling property one of the most stressful experiences in their lives.

To ensure the process is as straightforward (and stress free) as possible, MKP highly recommend you engage an experienced property lawyer at the outset of the transaction.  The experienced people at MKP can advise you of your rights and obligations under the proposed contract, assist you to negotiate and achieve your desired results and help you to eliminate any foreseeable and unnecessary issues. After all, it is best to avoid problems altogether rather than attempt to “fix” them later.

Zoe Marsh – Senior Lawyer

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