Legal principles governing Torrens title and leases
Your Manager has been very impressed with your written material prepared to date for the purposes of staff training. He has asked you to put together further written legal educational material for staff training on additional legal topics.
Your manager has provided the following three (3) fictional scenarios. For Scenarios 1 and 2, your task is to provide an analysis of the legal issue/s in each scenario and apply the relevant legal principles to provide the ‘advice’ requested by the fictional parties. Your analysis and application of relevant legal principles will form part of the legal training material.
Each year Ethical Trading Group enters into a number of lease contracts, involving serious financial commitments. In particular, Ethical Trading Group rents retail premises in each Australian state. The main system of land title, under which leases are granted, is the Torrens system.
Your task: Research and briefly outline the legal principles governing Torrens title and leases. Please make sure that you have dealt with the following points:
- Four essential features of the Torrens system of land title
- The distinction between a lease and a licence of premises
- Five statutory requirements for retail leases
When Sheldon and Penny were unsuccessful in obtaining business finance from several of their local banks they approached a city finance company. Although initially only seeking to borrow $50,000 the lending officer at the finance company produced projected figures’ and talked Sheldon and Penny into borrowing $150,000 secured over their Strata title home unit. This being their first business venture, Sheldon and Penny simply relied upon the figures prepared by the lending officer. Without receiving any further advice, they signed the loan contract and mortgage, and the mortgage was registered on the title to their home unit.
It soon became clear that the ‘projected figures’ were unrealistic and Sheldon and Penny are now struggling financially. Their new business is not making sufficient profit to cover even the interest on the loan and they are worried that the finance company will enforce the mortgage and take their home unit. Advise Sheldon and Penny.
A key part of the work of the Legal compliance team involves reviewing relevant legal sources and keeping up-to-date and current on changes to existing laws applying to the organization, or proposals for new laws.
Your task: Research and briefly outline four methods for updating legal knowledge and remaining current on Contract and Consumer Law, Corporations and Trust Law and Property Law.
When you are preparing your outline, please make sure that you have included at least one on-line method of keeping up to date and current, and one more personal method.
In any legal system, contract and consumer law are the two elements which are considered to be integral in the arena of civil. It is also the case of Australian legal system. Apart from that, property law is another element, which is also emphasized to a great extent under every legal system.
Considering this fact, focus of the present assignment would be on discussing provided cases on torrents system of land title, Australian consumer law and Trust law.
i] Analysis of the legal principles that governs Torrens title and lease system, it is noticeable that there are primarily four principles that are associated with it. These 4 principles form the basis of Torrents system of land title and associated features, which are as follows:
- Conclusive evidence of ownership- This is the main principle of indefeasibility. It is due to the fact that, government has required data and information of land titles and owes the responsibility protecting it. It contributes in ascertaining that when buyers make a purchase, the description of the title is aligned to the actual land .
- Transfer facility- With the help of this feature the owner can have the transfer authority of the ownership to another individual. This makes the process simple in nature in spite of different categories of ownership.
- Assurance fund-Incidents of owner suffering from financial crisis due to system error, is rare. In spite of rarity of such occurrences, when such incidents occur, under this feature the owner is provided with assurance fund for compensating their loss.
- Compulsory registration of title- This feature makes registration of every title under land registry system that is governed by the government, to be obligatory .
ii] Analysis of the two concepts i.e. , certain differences between both the concepts can be noticed. Considering licence of premises, it can be observed that the licensor has the ownership and possession of the property. On the contrary in lease of premises the tenant possesses exclusive possession of the property .
Licensee does not possess the authority of giving the property to third party in case of licence of premises. On the other hand, while conducting leasing of premises, the tenant is entitled to the authority of sub-letting the land or the property.
Another mentionable difference is lease agreements cannot be usually terminated, while agreements of licensing lands or property are terminable.
iii] While entering a retail lease, there are some statutory requirements which are required to be followed. Five of these requirements are as follows:
- Under Retail Lease Regulations 2013 it is specified that amount of occupancy cost is needed to be specified for excluding some retail premises.
- Information associated with outgoings payable by tenant are also needed to be specified.
- Outlining the form of Disclosure Statement opted by the landlord is also required.
- Under Retail lease Act 1994 it has been specified that agents or landlords are needed to have retail lease’s copy that has been proposed to the other party.
- When specifications of the acts are not followed, such actions would be considered to be offence under the act and lease would be considered to be void.
i] In the provided scenario, Sheldon and Penny may avail remedy under Right to equality of redemption. Power of sale entitles the lender with the authority of gaining possession order and allowing the lender to take possession of the property. The court usually determines the time of enforcement of the order.Borrower usually vacant the property, prior the possession date. However, in case of Sheldon and Penny, who were the borrower, followed by the possession, has certain rights under equity of redemption. Equity of redemption provides them with the right of transferring their mortgage at any time till point to sale i.e. exchange of contracts. Under this remedy they would be able to prevent sale of the property.
ii] Certain remedies can be availed for incidents associated with unconscionable conduct in an agreement or contract, under Australian Consumer law. One of the remedy in such cases, under the law is declaring part or the contract in totality to be void. Thus, loan contract and mortgage are voidable under common law wherein unconscionable conduct can be considered as a ground for it .
Analysis of legal issues involving consumer law and trust law
iii] In regards to the case of Sheldon and Penny, Australian Consumer law may provide with required relief in the case. Statics and figure provided by lending officer were unrealistic and inaccurate. Due to relying on these figures, Sheldon and Penny signed the loan contract that caused them financial loss. Such behavior can be termed as unconscionable because the stronger party in this case was the lending officer who was having more information and knowledge. He had misused his information and used unfair tactics. Thus, with the help of Australian Consumer law, Sheldon and Penny can seek relief. It is by establishing the occurrence of unconscionable conduct, remedies like financial penalty imposed on lending officer, compensation of the loss, varying the contract or agreement, declaring the contract void in whole or part, refunding or performing certain services may be claimed by Sheldon and Penny under Australian Consumer law in this case.
Lawyers are required to remain up-to-dated on any kind of amendments on the present set of laws for performing their duties in an effective manner. Such mentionable four ways with the help of which lawyers can remain updated on consumer law, contract law, property law and trust law are as follows:
Government websites- This is a personal preference. It is with the help of this source, lawyers can gather updates and latest information regarding amendments on the existing laws in a precise and prompt manner. It also provides them with the scope of knowing developments associated with it.
Events on industry networking- It is beneficial on gathering information and updates on industry information and enhancing professional profile, share experiences with clients and colleagues and be informed about competitors.
Online technology- This is one of the most effective sources for legal updates on different areas of law which can be customized in accordance to the needs of an individual. This provides with the scope of accessing information from podcast and practice notes of experts.
Industry newsletters- Subscribing to industry newsletter is beneficial in gaining in-depth information and knowledge about policy developments, legal development which may have significant impact on a client.
On the basis of the above made discussion it may be noticed that Torrens leases and title plays a significant role in the legal system of Australia. Addressing the needs of the consumers in Australia are dealt under Australian Consumer law. In addition to the report also reflected the importance for lawyers to be updated about changes in the legal system.
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Wensing, Ed and Jonathan Taylor, Secure Tenure For Home Ownership And Economic Development On Land Subject To Native Title (Native Title Research Unit, AIATSIS, 2012).
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