HELD LAWYERS

Est.1991

Property & Commercial Law

Law Matters

December 2013 Newsletter

Welcome
With the year 2013 drawing rapidly to a close, we take the opportunity to send you seasons
greetings and wish you a safe and prosperous 2014.
Our Malvern and Carlton Offices will be closed from Christmas Eve until Tuesday 7 January 2014.
If you or your clients require legal assistance during that time, we will be regularly monitoring
telephone, SMS and e-mail and will respond as quickly as possible.
In this months bulletin, we look at some topics arising out of matters we have dealt with, including:
sale authorities; a discussion regarding key-money; and preparing for the end of the transition
period under the Personal Property Securities Act 2009 on 30 January 2014.
We are happy to visit you in 2014 and provide staff or client briefings about a range of topics or matters of interest to you.
Please feel free to contact us in that regard.
We hope to see you (again) soon in person.
See you next year!
Adam Held
Principal

A Priest, a Rabbi and a Minister walk into a

bar
So now that weve got your attention, we thought it is
worth taking a moment to remind you that as part of our
ongoing service to you, we are happy at no charge to:
briefly peruse contracts of sale of real estate /
vendors section 32 statements, commercial leases
or other commercial documentation for your clients
(on the general understanding that they will retain our
services should they proceed); and
assist you over the telephone from time to time in
trying to briefly answer general legal queries,
e.g. What does this power of attorney mean?, or
My client wants to buy a property through
his SMSF, but the car parking space title is not an
accessory title is this a problem?

Signing up a sale authority

An ever-present issue in the law is the need to give
parties sufficient time between being given a document
and signing that document. It is vital to allow a party
sufficient time to read, comprehend and if necessary,
take independent advice. Otherwise, the validity of such
documents is open to challenge on the basis that the
party entering into the agreement has, amongst other
things, been coerced.
e.g. banks often send potential borrowers off to obtain
financial and/or legal advice before signing; it is
understood that deposit releases signed by a purchaser
at the time contracts are signed are invalid.
On that basis, real estate agents would be prudent in not
having new clients sign a sale authority without being
given the opportunity to first read, comprehend and if
necessary, take independent advice.

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

Retail Leases Key money scope of coverage

Section 23 of the Retail Leases Act 2003 (Vic) prohibits
a landlord from seeking, or accepting, payment of
key-money. Penalty provisions also apply.
What is a key money?
The definition in Section 3 of the Retail Leases Act 2003
(Vic) provides that:

2014, the PPSA treats transitional security interests

differently, depending on whether they were migrated.
Pre-30 January 2012:

that such charges have been correctly migrated

and recorded.

key-money means money that a tenant is to pay, or a

benefit that a tenant is to give, that is
(a)

by way of a premium, or something similar

in nature to a premium, in that there is no real
consideration or no true consideration given for
the payment or benefit (e.g. it is so
disproportionate to the benefit that it cannot
be true consideration); and

(b) in consideration of (i)

a lease being granted or an agreement

being made to grant a lease; or

(ii)

the variation of a lease; or

(iii) the renewal of a lease or the granting of an

option for the renewal of a lease; or
(iv) consent being given to the assignment of a
lease or to the sub-leasing of the premises
to which a lease relates.
Commentary and case law are currently unclear regarding
the scope of key-money. It may well be that, for example,
increasing the commencing rental of a renewed lease
period might still be considered as covered by Sections 3
and 23 of the Retail Leases Act 2003 (Vic.). A Court
would examine the true nature and reason for the payment
so a landlord must ensure the payment is bona fide,
transparent and can be substantiated.

Personal Property Securities Act 2009 (PPSA)

end of the transition period
In our May, June and July 2012 Newsletters we reviewed
the PPSA and its myriad implications in some detail. As
you will recall, the PPSA commenced on 30 January 2012,
and regulates all security interests over personal property
granted by companies or individuals.
The PPSA transition period comes to an end on 30
January 2014. Transitional security interests are security
interests that existed before the commencement of the
PPSA on 30 January 2012, whether or not they were
registered on pre-PPSA registers. They have the benefit
of temporary perfection until 30 January 2014. The
purpose of temporary perfection as to give the holders of
non-migrated interests time to register. After 30 January

Migrated transitional security interests (e.g. pre-30

January 2012 ASIC charges) are considered to
be registered at the end of the temporary perfection
period. However, due to difficulties during migration,
parties should check:-

whether any satisfied security interests have been

incorrectly recorded.

Non-migrated transitional security interests (that did

not appear on / could not be registered on any
register) must be registered or otherwise perfected
before the end of the temporary perfection period or
the security holder will lose any priority and become
an unsecured creditor, even though their interest was
created first.

Perfection can occur in a number of ways: Valid registration on the PPS Register.
Possession of the collateral.
Control of the collateral.

Secured parties should also ensure that they include the

correct information in any financing statement that they
register to perfect a transitional security interest.
(source, in part: LIJ November 2013 Protecting Transitional
Interests, column by LPLC)

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, brokers, etc.

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 commentary and general information only. It should not be relied upon as legal advice. 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. Persons listed may not be admitted in all jurisdictions.
Liability limited by a scheme approved under Professional Standards Legislation

ABN: 55 568 546 729