Property Law Act [Mar 2008]

On 1 January 2008 the Property Law Act 2007 came into force, replacing the 1952 Property Law Act and several other related Acts, including a number of old English ones going back as far as 1257.

It has been described as the largest single change to property law in the past 55 years and is the culmination of a 16 year project.

When the Act was passed last year, the Associate Justice Minister, Clayton Cosgrove, noted that the aim of the Act was to create modern, more user-friendly legislation for people buying or selling property, mortgaging their property to raise finance, or entering into commercial leases of land.

Not everything in the Act is new; some parts of it repeat or codify the existing law. Some of the changes that have been introducedare:

Landlord’s Consent

If a tenant asks a landlord for permission to transfer or sublease premises to a third party, or to change the permitted use of the premises,  the landlord must respond in writing within a reasonable time and cannot unreasonably withhold consent. If consent is given subject to conditions or is withheld, the landlord must provide written reasons for its decision..

Parties affected by the decision may claim damages from a landlord if they believe they have suffered loss which can be attributed to the landlord having unreasonably delayed or withheld its consent.

Insurance Protection for Tenants

If the premises are damaged by an insured risk (e.g. fire, flood, explosion) the landlord and its insurers cannot require the tenant to pay for the repairs.  This is so even if the damage was caused by the tenant’s negligence.

Distraint

The Distress and Replevin Act 1908 enabled a landlord to enter the premises and seize certain chattels of the tenant, if the rent was in arrears. This self-help remedy has been abolished because it reality it was a cumbersome exercise to do it correctly..

Sale and Purchase – Return of Deposit

A purchaser of land now has a statutory right to apply to a court for the return of the purchaser’s deposit.  The surrounding circumstances must be such that a court would not order the purchaser to perform a contract under which the purchaser has express  right of cancellation. 

An example could be where the purchaser discovers a significant defect in the property which it was not aware of until after having signed the contract and paid the deposit. 

The court is given the power to cancel the contract and also declare that the purchaser has a lien on the land to secure repayment of the deposit.

Conclusion

The new Act affects many aspects of the law relating to property. It includes leases, sales and purchases, mortgages, access to land and special powers of the court.

The chances are, if you are dealing with land in any way, the 2007 Act will have relevance to what you are doing.  With such a significant law change, it is more important than ever to obtain proper advice at the outset of any transaction. 

For more information contact Simon Kember at .(JavaScript must be enabled to view this email address)

The contents of this newsletter are of a general nature only. While the information is believed to be correct no responsibility is accepted for its accuracy. Readers are advised to establish the applicability of information in relation to specific circumstances and not to rely solely on the text of this newsletter.

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