by Katrina Brown | Feb 6, 2013 | Body Corporate Law, Strata/Community Living
We hear that on occasion – but all is not lost for the Body Corporate!
If an owner of a property fails to pay the loan repayments associated with their mortgage, the mortgagee (the bank that lent them money to buy the property and holds a mortgage over the property) may exercise its “right to take possession” of the property. In this case, there is a large likelihood that if the owner has defaulted on their mortgage, they have also stung the Body Corporate and have not paid their levies and penalties (also known as a “body corporate debt”).
Fortunately, hope is not lost. Section 143 (3) of The Body Corporate and Community Management (Standard Module) Regulation 2008 provides:
(3) A liability to pay a body corporate debt in relation to a lot is enforceable jointly and severally against each of the following persons—
(a) a person who was the owner of the lot when the debt became payable;
(b) a person (including a mortgagee in possession) who becomes an owner of the lot before the debt is paid.
The mortgagee is, therefore, jointly and severally liable for the body corporate debt – even though the debt arose before the mortgagee took possession. Phew…you might be saying.
The really great part for the Body Corporate is that if the mortgagee drags their feet in terms of paying out the debt, the Body Corporate has a continuing right to penalty interest at the rate resolved by the Body Corporate (but not more than the amount permitted by Queensland legislation, which is presently 2.5% per month – 30% per annum!).
How do you know when the mortgagee takes possession? They have to tell the Body Corporate, by Body Corporate and Community Management Form 8 (Information for body corporate roll), that they have done it. If they do not notify the Body Corporate, hard luck on them – the Body Corporate is still entitled to their interest, and recovery of reasonable legal fees for having to chase the mortgagees.
The Nautilus Team works closely with banks, non-traditional lenders and family financiers to maximise the rate of payment of the body corporate debts after possession. We also encourage mortgagees on title to consider paying out the debt before possession, and adding the amount to the mortgage balances, to maximise their chances of recovering equity in the property when they do take possession.
So, if you have not been advised a mortgagee has moved in on your non-financial owner’s property, and is preparing to sell – realise, all is not lost – but you do need to act. Remember, as a Committee, you have 2 years and 2 months to start legal proceedings for an outstanding body corporate debt. If there has been no contact from the mortgagee and a marketing campaign for the sale of the property begins, bear in mind the Mortgagee has an obligation to settle the total body corporate debt on settlement of the property.
We welcome you to contact our offices on (07) 5574 3560 or email info@nautiluslaw.com.au. We thank you for considering Nautilus Law Group.
by Katrina Brown | Feb 6, 2013 | Body Corporate Law, Commercial Law, Debt Recovery, Litigation Process
Prior to obtaining Default Judgment, a Claim and Statement of Claim must be filed with the Court on behalf of the Creditor outlining the relationship between the Creditor and the Debtor, the history of the supply of goods or services forming the basis of the Debt Claim, and the amounts outstanding and due (including interest and costs).
The Claim and Statement of Claim must be served on the Debtor (known in the legal documents as a Defendant”. Once the Claim has been served, the Defendant then has 28 days to file a defence or make payment. Quite often, a Debtor will contact our Team to ask for a payment plan. You are free to accept a payment in full (and you can require as a condition the payment of your legal fees), you can accept a payment plan (but are not required) or you are free to allow the matter to stand without prosecution (not recommended).
If there is, however, no contact from the Debtor and/or contact the Debtor provides no Defence, you are in a position to apply for a Default Judgment.
Obtaining a Default Judgment against a Debtor may be the only way to recover what is owed to you. A Default Judgment is an Order provided by the Court, and the Order sets out the amount outstanding owed to the Creditor. Your legal fees (as assessed at Court Scale) are usually granted in the Order.
To apply to the Court for Default Judgment, certain conditions must be present:
– The Defendant must have been served, with greater than 28 days lapsing between service and the date intended to lodge for Default Judgment; and
– No Defence (or Conditional Defence) has been lodged.
Once the Court has granted the Application for Default Judgment, a copy of the sealed Judgment is returned to our Team and we then consult with you to determine what enforcement procedures you wish to take.
We are instructed Credit Reference Agencies receive copies of all lodged Judgments, which gives added pressure to Debtors because their ability to continue credit facilities with their banks and lenders is often impacted, and most certainly they have difficulty in obtaining further credit with an unsatisfied Judgment on their Credit Report.
We welcome you to contact our team on (07) 5574 3560 or email us info@nautiluslaw.com.au. Thank you for considering Nautilus Law Group.
Submitted by: Nautilus Law Group
by Katrina Brown | Feb 3, 2013 | Wills
Nautilus Law Group stands beside families through life’s most difficult processes and challenges. The one consistent heartbreak most duly noted by our team is the anguish suffered as a result of ongoing family disputes.
Please, make amends. Life is finite. When you least expect it, your loved one may be gone.
It is never too late to open the line of communications. It is never too late to say, “I’m sorry.” It is never too late to just let the past be the past, and to create a new future. Sometimes, when we consider the position of others, we can begin to understand their position.
It is too late to make amends when your loved one is gone. So pick up the phone, write a letter, email or do whatever is necessary, to make amends. Don’t let the last words you share with someone be words of anger, for you may regret this when it is too late to take them back.
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by Katrina Brown | Feb 3, 2013 | Estate Administration and Litigation, Succession Law
Estate challenges are becoming more common than ever, with all members of the family seeking a share of a deceased family member’s estate. Wives, children, stepchildren, siblings, de facto partners, ex-wives are fighting viciously for what they feel they deserve. Nautilus Law Group strives to provide peace of mind to our clients to avoid the financial and emotional costs of extensive litigation.
It’s my money – I’ll do what I want with it!
When discussing the obligations of provision with clients, the most common question we are asked is ‘why can’t I give my money to whoever I want?’ Freedom to dispose of property as you wish in your estate seems to be a fundamental right, and clients are often shocked when they become aware of the fact that there are strict limitations on this right.
The law must draw a fine line between ensuring that these rights remain upheld, and introducing limitations to protect those that need protection. It is a balancing act – ensuring there is proper provision for the support of people that require such support, and the freedom to deal with your property as you see fit.
Succession Act
In Queensland, the relevant legislation relating to the governance of this balance is the Succession Act 1981 (Qld). Section 41 of this Act provides as follows:
“41 Estate of deceased person liable for maintenance
(1) If any person (the deceased person) dies whether testate or intestate and in terms of the will or as a result of the intestacy adequate provision is not made from the estate for the proper maintenance and support of the deceased person’s spouse, child or dependant, the court may, in its discretion, on application by or on behalf of the said spouse, child or dependant, order that such provision as the court thinks fit shall be made out of the estate of the deceased person for such spouse, child or dependant.”
In sum, this section provides that if a person dies and does not make adequate provision for the support and maintenance of one of the following classes of people:
· a spouse;
· a child; or
· a dependant;
then the court may order that further provision be made for the person who is a part of such class. This section applies regardless of whether you have drafted a Will and clearly outlined your intentions in relation to disposition of your assets.
What is a spouse?
A spouse is relatively easy to define, and encompasses someone who is a husband or wife, a de facto partner, or a ‘registered partner’.
A de facto relationship is established where two people are ‘living together as a couple on a genuine domestic basis’. The court takes into account a number of factors when determining whether a de facto relationship exists. These factors can include:
· the length of the relationship;
· whether there exists financial dependence or interdependence between the parties;
· whether the relationship is publicly known or is made public;
· how property is owned and used, and assets managed; and
· whether there is a mutual commitment to sharing a life together, including providing care and support to each other.
In order for a de facto partner to be considered the spouse of a deceased person at the time of the death, the person had to have been residing with the deceased on a ‘genuine domestic basis’ for at least 2 years continuously prior to the deceased’s death.
A registered partner is a member of a registered relationship, being a legally recognised relationship regardless of the sex of the parties.
What is a child?
For the purposes of the Succession Act, a child includes stepchildren and adopted children of the deceased.
What is a dependant?
Perhaps the most important to define is the concept of ‘dependant’. As per the Succession Act:
“dependant means, in relation to a deceased person, any person who was being wholly or substantially maintained or supported (otherwise than for full valuable consideration) by that deceased person at the time of the person’s death being—
(a) a parent of that deceased person; or
(b) the parent of a surviving child under the age of 18 years of that deceased person; or
(c) a person under the age of 18 years.”
This definition essentially means that any person who relied on the deceased person for support or maintenance, whether entirely or only partially, is entitled to make a claim for provision against the estate.
What does this mean?
The number of classes of people who may be eligible to make a claim against an estate makes it important to carefully consider who may be eligible to make such a claim, and whether they have been adequately provided for in the Will.
A common scenario
We have a number of clients who, for whatever reason, wish to leave a greater share of their estate to one of their children. In most cases, this is simply because one child has made sacrifices for the care of the Willmaker, while the other child has lead a relatively independent life. The greater share is not intended to demonstrate a greater love for one child, but simply to provide compensation for the sacrifices given by that child.
Simply dividing an estate this way is insufficient for the purposes of protection of assets within an estate. An unequal split between children will, in many circumstances, result in a challenge to the estate when it is being administered.
Whether a claim against an estate is valid or not, the estate is still required to respond to such challenge. Solicitors are retained in order to defend such action, and potentially take the matter to court if required. Such action incurs legal fees which can cause an estate to dwindle rapidly. Thousands of dollars can be spent responding to a claim against an estate, and this form of litigation can go on for years. In addition to the costs, estate litigation is emotionally draining on families and can often cause irreparable damage to relationships.
How can Nautilus help me?
Nautilus Law Group prefers to see your money go where you intend it to go. Nautilus would prefer to see your assets in your estate distributed to your family instead of lining the pockets of an estate lawyer.
Nautilus provides our clients with peace of mind – we work with our clients to establish strategies to avoid estate challenges. We aim to arrange disposition of your assets in a way that is in line with your wishes, while also mitigating the risks that may cause conflict between family members.
Nautilus strongly advocates the preventative approach to legal issues, doing our best where possible to prevent situations of conflict arising. If you have a complex family situation, we encourage you to speak to us to ensure that your assets within your estate are protected.
Please feel free to contact our office on (07) 5574 3560 for more information.
by Katrina Brown | Feb 3, 2013 | Commercial Law, Debt Recovery
Obtaining Judgment against a Defendant is a step in the process of recovering monies from a debtor – but not the end in many cases. A Judgment is valid for 12 years from the date on which the Judgment is granted. Judgment will adversely affect a debtor’s credit rating; however, that does not mean that your debtor will automatically pay.
Thankfully, there are further options available to the creditor to pursue the recovery of the debt monies.
Enforcement Warrants:
Under the Uniform Civil Proceeding Rules 1999, a Judgment Creditor can make an application to the Magistrates Court for an enforcement warrant to recover a Judgment, including interest at the statutory rate. Enforcement warrants can be issued by the Court for the seizure and sale of the debtor’s property, redirection of a debtor’s wages, and even the redirection of a debt owed to the debtor by a third party to be paid to the Judgment Creditor.
Winding Up:
If the debtor is a corporation and the debt amount is at least $2,000.00, “Winding Up” (otherwise known as involuntary liquidation) is an option. The Winding Up process involves having the corporation deemed insolvent and placed into liquidation. An Administrator is appointed and the company’s assets are assessed and distributed among the company’s creditors, including the Judgment Creditor.
As a last resort, we take more drastic measures…
Bankruptcy:
If the debtor is an individual and the debt amount is at least $5,000.00, Bankruptcy is an option. A Trustee is appointed to collect and distribute the Bankrupt’s Estate, and in the process the Judgment (in whole or part) is satisfied.
In the coming weeks we will address each of the above enforcement options in greater depth providing a review of the process and timelines involved.
Stay Tuned!
We welcome you to contact our offices on (07) 5574 3560. We thank you for considering Nautilus Law Group.
Submitted by: Nautilus Law Group
