Real Estate. Property Law. What are your rights? And what does section 88k of the Conveyancing Act mean for you?

When you think about real estate you think of it as something that’s yours, or something you have the right to use.

Did you know that proprietorship law also covers what rights other people have over your real estate?

For example:

Easement to drain water means someone can drain water over your land. It also means they can enter your real estate any time to fix or upgrade the pipe they’ve installed on your land.

Right of carriageway means someone can drive on your private land. It also means they can build a road on your land and come onto your real estate to fix or upgrade the road.

Right of walkway means someone can walk over your land. It also means they can build a footpath on your land and come onto your property to fix or upgrade the footpath

Profit a prendre is a fancy French word but it basically means someone has a right to take whatever is produced on your land. So if you grow apples, you own the apple tree but they get to have the apples on it.

Easement for services means someone can run services, such as sewer, electricity, phone wires, etc through your land. It also means they can build those lines and enter your possessions at any time to fix or upgrade those lines.

Covenants are promises to do something or not do something on your land. For example, you might have a covenant on your property saying you won’t build a fence around it.

These are the most common ones.  However, at the time these are made you can impose restrictions, for example to their size, where they are on the land, when and how the land can be entered to build or maintain them, etc.  It pays to think this through when these are created because these rights over your land will stay with the land so when you sell it the new owner will have to honour these rights.  Depending on what the rights are it may affect the value of your real estate.

There is another aspect of property – can someone force you to sell your land or for you to grant them rights over your land?

Think the movie: The Castle

The more common one that we are coming across is forced easements through the application of section 88k of the Conveyancing Act. This is where a developer says that they need an easement or right over your property for their development.  In exchange they offer you ‘market value’ for the land, which is usually a fairly small amount.

If you refuse, they can go to Court and the Court can force you to give them the rights they want and for you to take the money offered on the basis that forcing you to do so is in the public interest and they tried to negotiate with you but the negotiations went nowhere.

If you are willing to grant the easement or right (or feel it is inevitable), then the trick is to maximise the compensation and also to have the terms of the easement defined as narrowly as possible so as to minimise disruption over your property.  This is where commercial negotiation comes in.  Our firm of commercial lawyers are experienced and ready to negotiate the right deal within the framework the law offers.  We have had our clients gain 10x what they were originally offered using this approach.

What’s more is in most cases you can get the developer to pay your legal fees and the costs of any other consultants you need for this whole process.

At Adam Ahmed & Co we treat your property the same way we would treat our own. We are able to advise you on:

• Property Law. Easements, covenants and other matters affecting or relating to your property’s title

• Buying and selling your home

• Buying and selling investment properties (including off the plan strata transactions)

• Buying and selling commercial real estate

• Leasing commercial property (whether as the landlord or the tenant)

• Loan and mortgage transactions (whether as the lender or the borrower)

• Joint ventures, including private trusts

• Property development. Property Law

Frequently Asked Questions

There is a lot of strategy around this so it is worth consulting a lawyer first.  This is because you can often get the developer to pay your legal fees.  However, it is not advisable to negotiate the details of this with them immediately as they may make a low ball offer or offer a restricted arrangement which is not suitable that you may then inadvertently agree to.  It is best to simply tell them you will consult a lawyer and come back to them.

It is a good idea to think about whether you want to grant them and easement, and if not, why not.  If so, what would you want in exchange?  Having a clear idea of the outcome you want will allow the appropriate strategy to be formulated.

In NSW if you waive the cooling off period and you don’t go ahead with the contract then you will usually need to pay 10% of the purchase price.  For a $1,000,000 purchase that means you lose $100,000.

In some cases it is not possible to buy with a cooling off period (for example auctions).  Care needs to be taken when you are applying for finance because if finance does not come through, you will lose your deposit if you cannot complete the purchase or if you pull out for any reason.

The agent is always keen to sell with a section 66W certificate – which is a certificate provided by a solicitor saying that you agree to waive the cooling off period.  It is best not to do this, unless the contract has been reviewed beforehand and you have arranged finance.

Agents are very skilled when it comes to sales.  They don’t appear always to be salespeople – sometimes it feels like this particular agent isn’t like the others and isn’t a salesperson but genuinely cares.  In years of experience all agents give this impression, which is what makes them very powerful salespeople.

Real estate agents are amongst the best salespeople around – and with commissions up to 3% of the property price (for a $1,000,000 property that’s $30,000), you can see why it is attractive and they would want to push as many sales as they can.  To make $100,000 per year they only need to do 3 or 4 sales each year!  Having said that, they are not bad people, they just want to earn a living.  If they make no sales they make no income.

When you feel your emotions are starting to come out, then you know you are being sold.  Be it the fear of missing out.  Be it falling in love with the property and imagining you and your family growing up there and making a life there.  When these emotions start to come out, you are being sold.

Stamp duty is a state tax on transfers of certain property – the most well-known being when land or property is sold.  The buyer has to pay the stamp duty and it can be quite high.  There is a calculator to work out what your stamp duty will be on the office of state revenue website.  Here is the link:

We have an article about this on our website. Please click here for details.

Stamp duty is calculated based on the purchase price and it is payable within 3 months of exchange of contracts but must be completed before settlement.  You can’t change the registration of the property into your name until the stamp duty has been paid.

This is when you sign the contract.  To have a binding contract both the buyer and seller need to sign it.  What happens is the buyer signs one copy and the seller signs a different copy and they swap with each other – so the buyer has one signed by the seller and the seller has one signed by the buyer.

You pay the deposit at ‘exchange’ and pay the rest at settlement, which is usually 42 days later.

The deposit is usually 5% or 10% of the price. You are required to pay the deposit on exchange of Contracts.

it’s the day the buyer pays the balance of the amount owing and now owns the property and can move in if they like.

Exchange is when you sign the contract and settlement is when the balance is paid and the sale is finished.

Get in touch with us for a free quote.

Our strength is our commercial acumen from a wide range of commercial transactions and negotiations, not just relating to property. We use best practice in other fields to our advantage when dealing with property transactions and bring our expertise of commercial skills to negotiations. Our goal is to get you the best outcome we can, going the extra mile like we would if we were dealing with our own property.