Bowen Buchbinder Vilensky

Archive for the ‘Mortgage’ Category

Landlords – Back to Basics
Tuesday, February 2nd, 2016


By Les Buchbinder, Director, with the assistance of Giuseppe Graneri, Associate at Bowen Buchbinder Vilensky Lawyers 

2 February 2016

The starting point for all Landlords should be ensuring that they have an appropriate and well drafted lease for their commercial premise. It is a crucial step for Landlords as a poor lease or a bad leasing decision can be a costly mistake. The lease is central to the goodwill, value and future sale of a business.  A well drafted lease can avoid or assist the Landlord in resolving disputes that they may have in the future with tenants.

In Western Australia, the Commercial Tenancy (Retail Shops) Agreements Act 1985 regulates many retail shop leases. Landlords should understand their rights and obligations in relation to the lease and what procedures to follow in the event of any disputes.

In October 2015, the commercial leasing vacancy rate in the Perth CBD was 19.6%. This figure was expected to grow in early 2016 as final completions of new developments came onto the market and leasing space that was taken up during the boom, was handed back as businesses have downsized.

At its meeting today, the Reserve Bank of Australia’s Board decided to leave the cash rate unchanged at 2.0 per cent. The reasoning behind the decision was that recent information suggested the global economy is continuing to grow, though at a slightly lower pace than expected. This is the ninth month in a row that Australia’s official interest rate has remained unchanged at a record low 2 per cent.

The ramifications for Landlord’s entering into a bad or hastily drawn lease in this current climate is that they may find that they have an invalid lease or they may experience significant disputes and as well as potential litigation in later years as a result. When interest rates do start to rise in the coming years, we are likely to see a large number of disputes concerning rent reviews.

Legal and commercial advice should therefore be obtained before:

  • making any commitments to lease, take on an assignment or incur any other obligations;
  • signing an offer to lease or any other lease related document;
  • payment/receipt of any deposit or other monies; or
  • occupying the leased premises.

If you are a Landlord looking to lease in this competitive market, you should begin by considering your leasing requirements with the main goal to develop a profitable business. Once you have identified your leasing requirements (i.e. the lease term, annual rent, rent reviews, etc) you must then seek to include as many of these requirements as possible when negotiating the terms of a new lease or the renewal of a lease with the tenant.

For more information or to discuss your commercial leasing objectives and needs, please feel free to contact Les Buchbinder at

Leave a comment

If you’d like to receive more blogs on this and related legal matters, please click the red ‘Subscribe’ button at the top, left hand of your page now.

What to Consider When Becoming a Mortgage Guarantor
Friday, June 13th, 2014

Craig pic

By Craig Hollett, Director at Bowen Buchbinder Vilensky Lawyers

13 June 2014

Rising house prices affect many of us directly and all of us indirectly.  In cases where the parents of grown-up children see their kids getting first jobs, starting out in life, and facing the seeming impossibility of buying even a modest unit, it’s only natural to want to help.

Those parents who can afford to, often help their kids with a loan, soft or otherwise.  A recent survey in the UK shows that 1 in every 4 first home buyers borrows money from family or friends to help secure a place on the property ladder.  Loans to your children should be properly documented to protect you if your child and their partner, current or future, later separate and a question arises about whether your loan was a loan or a gift in the division of their assets.

But many parents are not in a position to give their kids a major financial leg-up.  In cases like these, where Mum and Dad have little spare cash, but do have equity in the family home, they may think about standing as guarantor to help their kids get that vital first home loan.

While the motivation to help is well-understood, the consequences of being a guarantor are not always understood as well.  Here are a few suggestions of things to consider if you are thinking about becoming a guarantor:

  • Take independent legal advice first.  You need to know what exactly you’re getting into, your rights and the possible consequences for you if your child defaults on their loan.   You don’t want to be in the position of having paid your mortgage faithfully every month for decades, only to have the bailiffs coming round to seize goods, or your property, because your kids get into financial trouble.  You also need to know if and how you can be released from your guarantee in the future.
  • Be sure that you know whether the guarantee is for a capped amount or the full amount of the loan.  A partial guarantee reduces your risk, and may be all your kids need to get the loan.
  • Have an agreement with your kids that creates an escape clause for you so that if your kids start earning a lot more, and/or the value of the property rises, they agree to refinance, and remove you as guarantor.  Regularly review this situation with your kids, at least on an annual basis.
  • Promptly seek legal advice if your child and their partner separate and you are a guarantor on their loan. The last thing you want to do is find yourself still guarantor to a loan for a property inhabited by your child’s ex and their new partner!
  • If you do guarantee the loan, avoid putting a caveat on your  own property .  Even if your kids don’t get into trouble, a caveat could frustrate your own plans to downsize or sell later.
  • Make sure you accept the lender’s offer to receive copies of all correspondence and documentation to the borrower.  You don’t want to find out that your kids have fallen behind on their loan only months after the event when a process server knocks on your door and serves you with a writ of summons.

Remember, you are not the first parent to go down the path of being a guarantor for a child.  There are many factors to consider and a lawyer used to working with mortgages can help you reach a positive outcome – which includes your peace of mind!

Leave a comment