In Check Issue 80 | September 2018

1 October, 2018
Download PDF

Conveyancing claims in 2017-18

Conveyancing claims accounted for over 30 per cent of the cost of claims in the last policy year costing an estimated $11.9m. They have consistently been in the top two areas of claims by both number and cost for many years. The mistakes often stem from practitioners not knowing or keeping up with the law, not supervising staff, not putting in place adequate processes and systems and not picking up unique issues for a particular property or transaction.

The most expensive mistakes in conveyancing claims in the 2017-18 year were duty issues followed by defective disclosure and not advising purchasers about the property. These were also the top three mistakes by number.

The common duty mistakes show a lack of knowledge about when a nomination or transfer to a superannuation fund will attract further duty, as well as not advising clients early enough about extra duty for foreign residents or the requirements for pensioner exemptions.

Whenever there is any mention of nomination by a purchaser client you should always give clients advice about the effect of section 32J of the Duties Act 2000 (Vic). Land development, including lodging a planning permit, before a nomination is made will result in double duty. For further information on nomination issues see our blog Nomination woes – GST, foreign investment and stamp duty.

For a checklist dealing with tax issues in conveyancing see our Key Risk Checklist: Tax issues. This checklist contains links to relevant tax information.

The most common defective disclosure mistakes were wrong disclosure about connection of services and not disclosing unregistered easements. These were often caused by not communicating with the clients well enough and not enough attention to detail when looking at the searches and certificates that were obtained.

The most common mistakes purchasers’ practitioners made related to not advising clients to check measure the property, not giving clients information found in searches or plans of subdivision or not obtaining the necessary certificates.

For more information on common conveyancing claims see our Claim free conveyancing practice risk guide.


New conveyancing initiatives

We are shining a spotlight on conveyancing this policy year. As part of that we have launched two new conveyancing initiatives to help address the persistent causes of claims in a practical way – frequently asked questions and a conveyancing seminar series.

Frequently asked questions

Many of the questions we receive on our general risk management enquires telephone service relate to conveyancing. We have taken the most common questions asked and launched a new FAQs section on our website. You can find them here or navigate to them from the home page on our website via RISK MANAGEMENT then PROPERTY | MORTGAGES as shown below. We will be regularly adding to the questions.




New Conveyancing Series seminars

This new series, presented by Phil Nolan, Building a better section 32 statement, on 26 October 2018 sold out very quickly. We will be running a further seminar on this topic in the next few months.


Electronic conveyancing deadline – 1 October 2018

From 1 October 2018 all instruments or combinations of instruments available in PEXA are to be lodged electronically in Victoria.

You should not try to lodge instruments in paper that need to be lodged electronically. Stamp duty paid for the paper instrument may not be recognised by Duties Online and you may have to pay the stamp duty twice. While a refund can be obtained it takes some time. There is also a risk that clients will lose the opportunity to claim a once only exemption, like the pensioners exemption, if it is sought on the paper transaction and then the practitioner applies again with Duties on Line.

Don’t leave yourself or your client in a position of having to find a second amount of duty or losing a right to an exemption. Practitioners have already been caught by this when trying to lodge stand along instruments that should have been lodged electronically.

For details of the timeline for electronic lodgement click here.


Sunset provisions in residential off the plan contracts

We recently published a bulletin about the retrospective effect of the Sale of Land Amendment Bill 2018 (the bill) currently before parliament that will affect residential off the plan (ROTP) sunset clauses. The bill passed the Legislative Assembly on 20 September and had its first reading in the Legislative Council.  Both houses of parliament currently stand adjourned to a date to be fixed.  If the Bill is not passed through the Legislative Council before parliament expires prior the November 24 election, as now seems likely, the Bill will lapse and the proposed changes to the operation of sunset clauses will not come into effect.  It would be up to the incoming government after the election to determine whether it wishes to reintroduce the Bill into the new parliament and have it reconsidered afresh.

Telephone LPLC’s new Sunset Clause Hotline 9672 3800 if you need advice to manage potential risk exposures arising from the proposed retrospective changes to sunset clauses. Heather Hibberd (, Phil Nolan ( and Jodie Potts ( can assist, or they can refer you through to one of LPLC’s external panel solicitors for up to 30 minutes of free legal advice should that be required.


GST Withholding provisions

The GST withholding provisions have been in operation since 1 July 2018. Many practitioners are grappling with the way the provisions work. Here are some resources to help.

  • Our first bulletin about the withholding provisions is available here to help refresh your memory on the basics of the requirements.
  • We recommend that you use the flow chart at the end of the bulletin when trying to decide if the notification or withholding provisions apply. It can also be found here.
  • The ATO Law Companion Ruling LCR 2018/4 is essential reading for conveyancing practitioners trying to understand the nuances of the withholding requirements.
  • Our new bulletin with practical examples is available here to help you work through some common scenarios.

To dispel some common misconceptions that we are hearing on the GST hotline please note that:

  • vendor notification is required for all residential property (both existing and new) except commercial residential property regardless of whether the vendor is registered for GST.
  • if a farmland exemption applies no withholding is required because no GST will be payable.
  • most property is likely to be land in a property subdivision plan unless it is a crown allotment
  • if GST withholding is required it is irrelevant whether the sale price is GST inclusive or exclusive, it is the purchaser who must withhold. How to calculate the amount to be withheld is set out in Division 15-A, sections 15-0 to 15-15 of Schedule 1 to the Taxation Administration Act 1953(Cwlth)

Small business definition now $450,000

Financial statement in accordance with section 52 of the Estate Agents Act 1980 (Vic) now need to be provided for small businesses worth $450,000, previously it was $350,000.

The definition of small business in the Estate Agents Act was changed on 20 May 2018 to be a ‘business the goodwill, plant equipment and fittings of which are sold or offered for sale or authorized to be sold at a total price not exceeding $450, 000’.

Failing to provide a section 52 statement or providing a defective one gives the purchaser the right to avoid the sale agreement:

  • three months after the purchaser first signs any contract, agreement or document in respect of the sale, and
  • before taking possession of the business.

Taking possession of a small business before settlement means that a purchaser relinquishes the right to avoid the contract later if the section 52 statement is defective.

If you practice in this area you should update your checklists to take the change in threshold amount into account.

Risk management seminars

LPLC’s 2018 Calendar of events is published on our website to help you plan your CPD year.

Metro Series

The Metro series are half day seminars on risk for metropolitan Victorian lawyers. This year they will be held in –

Oakleigh South, Wednesday 14 November 2018

Kew, Wednesday 21 November 2018

Ringwood, Friday 23 November 2018

Sunshine, Wednesday 28 November 2018

The same program is run over the four days and will include 4 CPD points for $176.00 including GST. The presentations are:

Cyber-security is everyone’s risk

Cyber fraud related notifications are a weekly occurrence at LPLC. This is not just an IT issue but a matter for everyone to understand and take steps to prevent. This session will look at the various ways cyber thieves are trying to steal money from you and the practical steps you can take to prevent it. It is important you learn about this before it happens to you.

Managing mortgage security risks

Acting for lenders in the suburbs can be a risky pursuit, especially if they are private lenders or the loans are within families or between associates. The security arrangements are often not taken seriously by the parties and then they sue their lawyers when the security turns out to be inadequate. This session looks at common mistakes and lessons for practitioners as property prices soften.

I fought the law – in conveyancing

Failure to manage legal issues is the underlying cause of about 40 per cent of conveyancing claims.

In this session we will consider the five most common legislative provisions where we see claims. We will also look at some recent legislative developments to help practitioners stay on top in conveyancing matters.

What’s new in regulation, and what does it mean for you?

A representative from the Victorian Legal Services Board and Commissioner will discuss recent regulatory developments and policies that affect lawyers in Victoria. You will hear how and why these policies came about (including some recent case studies) and you’ll learn how these policies can help you. You’ll receive some practical tips on how to minimise the risk of a complaint, and some advice on what to do if a complaint is made against you.

Click here to register


What’s new on LPLC’s website

Practice risk guides

Small business big risk

Pitfalls in personal injury litigation

Keep managing mortgage risk


PEXA, email, electronic funds transfer and cyber-crime

GST withholding practical examples

Retrospective changes proposed for residential ‘off the plan’ sunset clauses

Medical treatment planning and decisions Act 2016 (Vic)

Vendor/supplier GST withholding notice

Some purchasers required to withhold GST from 1 July 2018

Security warning for PEXA users

Law Institute Journal articles

Expect the unexpected (September 2018)

When to say goodbye (August 2018)

When parents lend to children (July 2018)

Risk video bites

Defective section 32 statements (September 2018)

Conflicts (July 2018)

New web pages

FAQs – Conveyancing

Wellbeing and mental health

Changing your email address?

If you change your email address don’t forget to tell us so you will continue to receive our newsletters, emergency bulletins, seminar launches and blogs.