HELD LAWYERS

Est.1991

Property & Commercial Law

Law Matters

June 2012 Newsletter

This months bulletin focuses on acronyms PPSA and SMSF.

In last months bulletin, we briefly discussed the Personal Property Securities Act 2009.
A complicated piece of legislation, it is similar to the GST in that it has the potential to give
rise to some sort of issue or question for consideration in virtually every transaction. In this
bulletin we look at how the PPSA affects real estate transactions.
The spectacular growth of self-managed superannuation funds has seen some unfortunate
consequences, leading to the federal governments recent inquiry into the collapse of Trio
Capital. We will look at some of those recommendations and their implications.
If there are topics you would like us to look into, please let us know. Until next time happy
30 June!
Adam Held
Principal

SMSFs big changes afoot

As the name implies, self-managed superannuation funds
are set up by trustees choosing to manage their own
funds. Getting it right is important there are many rules
and regulations to comply with. Trustees are ultimately
responsible for running the fund. They cannot delegate
that responsibility to tax, financial and super professionals
who help manage it. Indeed, the ATO requires a trustee
declaration to indicate that the trustee understands and
accepts those responsibilities for compliance.
In the case of the Astarra-Trio Capital collapse:
super funds regulated by the Australian Prudential
Regulation Authority (APRA) received compensation
for their investment losses; SMSFs did not
it is clear that the role of financial advisers is critical
in any decision to set up a SMSF and developing the
resulting investment strategy, especially where there
are incentive payments to those advisers
Legislation has just passed the Senate, taking effect from
1 July 2012 (compulsory from 1 July 2013):

requiring financial advisers to act in their clients

best interests
banning financial advisers of new clients receiving
commissions from firms selling financial products
adviser agreements must be renewed every 2 years

First (new home) home bonus tick, tock

With 30 June just around the corner, there is little time
left to make a purchase that qualifies for the Victorian first
(new home) home bonus. Sales contracts must be signed
by 30 June to be eligible.

Business Names new national register

A new national business names register run by ASIC
commenced on 28 May 2012, replacing the current 8
state and territory systems. Businesses can now register
a business name nationally for 3 years for only $70.
The register will also link to the Australian Business
Number website - all business name owners will need
to have an ABN.

Malvern Office

Carlton Office

Postal Address

Contact Details

Level 1, 180-182
Glenferrie Rd
MalvernVIC3144
(corner Winter St)
Melway59C8

113 Cardigan St
CarltonVIC3053
Melway2BF10

P.O. Box 467

Malvern VIC 3144
W: www.heldlawyers.com

T: 03 9509 0710
M: 0407 548 632
F: 03 9500 0805
E: info@heldlawyers.com

Existing business name owners:

do not need to do anything to facilitate a transfer
their state/territory registrations are automatically
transferred to the new national register. In case
of the same business name being registered in
different states/territories to different entities, ASIC
will probably allocate a qualifier to allow people to
distinguish between them
should check to ensure valid transfer and registration
of their current business name(s)
should ensure their current business name(s) do not
lapse, as they may prove difficult to re-register

PPSA fixtures or goods?

The PPSA applies to almost all personal property,
including goods. It does not apply to land or fixtures.
However, whether an item is a good (unfixed item) or a
fixture remains unclear. If a fixture is the same under the
PPSA as at common law, then the Act will have limited
application. If it has a narrower meaning, then the PPSA
may apply to items that have traditionally been considered
to be a fixture.

PPSA impact on real estate transactions

General Condition 7 of the Contract of Sale of Real
Estate deals with the release of registered PPS Registry
security interests only. Where all or part of a property is
subject to a security interest to which the PPSA applies
and the security interest is registered on the PPSR, at
settlement a vendor is to provide a purchaser with a:
release from the secured party, releasing the security
interest in respect of the property; or
statement setting out that the amount or obligation
that is secured is nil at the date of settlement; or
written approval or correction indicating that the
personal property included in the contract is not, or
will not be, property in which the security interest is
granted
If the purchaser requires a release of a PPSR security
interest, the purchaser:
under GC 7.8 must notify the vendor 21 days before
the due date for settlement. Purchasers should
therefore carry out a PPSR search
where possible should require the vendor to ensure
that the secured party undertakes to register an
updated financial change statement
where possible should also require the contract
to provide for the transfer to the purchaser of any
security interests in favour of the vendor relating to
the property being sold

Note: General Condition 2.3 contains a vendor warranty

that at settlement, a vendor will be the unencumbered
holder/owner of the land and any improvements, fixtures,
fittings and goods sold with that land. A purchaser should
therefore require a release of any security interest from
any secured party in respect of the goods sold.

Trusts bare or bear?

One frequently asked question by those setting up an
SMSF: what is a bare trust? It is a simple trust - where
property is held on trust by a (bare) trustee with no
interest in, or duty as to the trust property, other than to
transfer the trust property when required (no discretion).
The best, most recent example involved Gina Rinehart,
her children and the multi-billion dollar trust fund of which
she is trustee. The court determined that in bringing
forward the vesting date of the trust to 30 April 2012,
the trust vested (i.e. expired). Ms Rinehart gave up her
discretion as to the sharing of the trust property, and
created a bare trust.
Referrals
Should you require non-legal assistance with various
matters, we are happy to provide you with contact details
for a range of service providers, including financial
institutions, accountants, real estate agents, etc.
Topics next issue include
PPSA leases
Business selling a privately owned business
Laws of succession, wills & probate review
Landlord insurance who is covered?
Owners Corporations - certificates
Held Lawyers - Areas of practice
Property Law including conveyancing and leasing
Commercial and Business Law
Banking and Finance Law including mortgages
and guarantees
Wills and Estates Law
Intellectual and Industrial Property Law
Litigation
If you would like further details or assistance or to discuss
information contained in this publication or generally,
please do not hesitate to contact us.
For copies of this and other publications, visit our website
at www.heldlawyers.com.

Disclaimer
This publication is intended to provide a general outline. It is not intended to be a complete or definitive statement of the law on the subject matter covered.
Further professional advice should be sought before any action is taken in relation to the matters described in this publication.
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