Solicitors’ certificates – risky business in COVID-19

According to the LPLC, in the current financial environment requests for lawyers to advise on loans and guarantees, particularly from second and third tier lenders, appear to be increasing.

Providing solicitors’ certificates in these matters is risky at the best of times, but where there is uncertainty about future financial and property market stability and clients under severe financial stress, extreme care needs to be taken.

Face to face verification of identity

Past experience has shown that when people are financially desperate, some use deception to borrow money. In this current economic environment more people will be financially distressed and this heightens the risk of borrowers presenting to practitioners who are not who they claim to be.

Verification of client identity in all cases is paramount to safeguard against identity fraud. 

Verifying identity when giving a solicitor’s certificate needs to be done face to face in person and the recent ARNECC notice does not change that because:

  • rule 11 of the Legal Profession Legal Practice (Solicitors) Rules 2015 (Rules) governs how evidence is to be given of any advice you gave a borrower or guarantor.
  • rule 11.2 of the Rules says you need to verify your client’s identity by using the VOI Standard in schedule 8 of Model Participation Rules, which requires you to do face to face VOI.
  • rule 11.3 says you must use the LIV form of solicitor’s certificate and that certificate says the identity of the borrower or guarantor was verified in accordance with rule 11.2.

If the verification of identity can’t be done face to face lawyers should not sign the solicitor’s certificate. However, there is nothing stopping lawyers from giving advice to a guarantor or borrower via video conferencing about their obligations as a borrower or guarantor. 

An acknowledgement signed by the client that they received the advice from a lawyer may satisfy the lender in lieu of a solicitor’s certificate. If the lender insists on a solicitor’s certificate we could refer them to rule 11.8 which prohibits a solicitor, such as a solicitor acting for the lender, from aiding, abetting, counselling or procuring another solicitor to breach rule 11. Section 39 of the Uniform Law also makes it an offence for anyone, and this would include a lender, to induce a law practice or practitioner to breach the Uniform Law or any rules.

More than just witnessing

We all know that signing a solicitor’s certificate involves more than merely witnessing documents. We are certifying that we have advised our client on the general nature and effect of the loan or guarantee documents. Many of the claims received by the LPLC centre around allegations that the client was not given the appropriate advice.

When people are stressed, they do not always think clearly or remember what they have been told. In this context it is vital that we are very clear in our explanations to clients and that we confirm our advice in writing. It may take both oral and written explanations before the client understands the risks.

Where possible we give the client time to think about the decision before they sign. 

Critical issues for advice

The critical issues to consider and actions to take when advising a borrower or guarantor and providing a solicitor’s certificate are set out below.

  • Who is the client? Where there is a conflict we shouldn’t act for more than one party in the transaction, particularly husband and wife guarantors, as their interests are often not completely aligned. The same may be said for business-partner directors of a borrower company if the two directors have different assets at risk.
  • You need time to read and digest the documentation before giving advice. We ask for the documentation ahead of time and carefully read and advise the client of the relevant and unusual provisions, particularly the default provisions and interest rates.
  • Consequences for guarantor if borrower defaults. We need to warn our client of the risks of default by the borrower, and the financial and other consequences for them if that occurs, including losing their home or going bankrupt.
  • Be vigilant for improvident transactions. Most solicitor’s certificates involve the client giving a mortgage over property as security for monies advanced. Who is getting the benefit of the borrowing? If not the client, why are they choosing to mortgage their property and put it at risk for another’s benefit? If the answer does not withstand objective scrutiny, warn the client against entering into the transaction in strong terms and document that advice. This is particularly important where the client:
    • is elderly
    • is inexperienced in business or financial matters
    • has English language difficulties
    • appears under pressure from adult children or from their spouse.
  • If the client does not heed our advice, consider whether we should cease acting in the matter.
  • Keep very good written records of what was said to and by the client. See our File note – meeting to advise about a guarantee as a starting point for preparing a note before your meeting with the client.
  • Confirm our advice in writing to the client.
  • Charge a fee that properly reflects the work required.

Proactive practice management

In order to ensure all of these steps are taken and done well, now is a good opportunity to:

  • review or write a firm policy about how this work will be handled. Our recently revised Key Risk Checklist: Solicitor’s certificates for borrowers or surety providers will help you fill out your policy
  • prepare a proforma file note to use when you see clients. You can use our File note – meeting to advise about a guarantee as a good starting place and adapt it to suit your needs
  • prepare a precedent letter to send to clients confirming the advice you gave in conference or in preparation for a conference with the client. This letter can be based on our File note – meeting to advise about a guarantee.

Our firm adopts best practice process and procedures that heed this guidance by the LPLC for Solicitors Certificates on a fixed fee basis.

 

188 Visa – Business Innovation and Investment (Provisional) visa

This category is for visa holders to own and manage one or more businesses in Australia. To be eligible for this visa the applicant is required to apply through an expression of interest, be nominated by a state or territory government and be invited to apply. The streams under this subclass include the Business Innovation stream, the Business Innovation Extension stream, the Investor stream, the Significant Investor stream, the Significant Investor Extension stream, the Premium Investor stream and the Entrepreneur stream.

In each of the streams, the applicant’s assets must be lawfully acquired and the applicant must satisfy relevant health and character requirements.

Business Innovation stream

Along with being invited, the applicant will need to meet a minimum score of 65 on a points test: Schedule 7A of the Migration Regulations 1994.

The points test awards points for age, English skill, business experience, qualifications, financial assets and business turnover.

The applicant must be younger than 55 at the time of application, unless they are proposing to establish or participate in a business or investment that the nominating state or territory government has determined is of exceptional economic benefit.

The applicant must demonstrate an overall successful business career and, for at least two of the four fiscal years prior to applying, the applicant must have had an ownership interest in at least one business with an annual turnover of at least AUD$500,000 each year.

The applicant must demonstrate that they and/or their spouse have at least AUD$800,000 in business or personal assets available to invest in Australia within two years from date of grant of visa, as well as sufficient funds to settle in Australia.

Business Innovation Extension stream

This visa is for applicants who have held a subclass 188 Business Innovation stream visa for at least three years. Applicants must not have held more than one subclass 188 visa. This the extension allows for a total period of stay in Australia of six years from the date of the original subclass 188 visa grant.

The applicant needs to demonstrate a continued need to reside in Australia for the operation of the qualifying business. At least two years before applying the applicant must have had an ownership interest in one or more businesses actively operating in Australia.

Investor stream

Like the Business Innovation stream, the applicant will need to meet a minimum score of 65 on a points test. Points are awarded for age, English skill, business experience, qualifications, financial assets and business turnover.

The applicant will also need to demonstrate an overall successful business or investment record. In one out of the five fiscal years immediately before being invited to apply, the applicant must have had at least 10% ownership of a business and direct involvement in its management or direct involvement of management of assets of at least AUD$1.5 million. During the two fiscal years immediately before being invited to apply, the applicant must have acquired net business, investment and personal assets of at least AU$2.25 million which are available for legal transfer to Australia within the first two years of the visa being granted.

Significant Investor stream

The applicant must have net assets of at least AUD$5 million that are available to be used to make the complying investment in Australia and must demonstrate a genuine intention to reside in the nominating state or territory. The applicant must also complete a Form 1412 – Deed of Acknowledgement, Undertaking and Release signed by each additional applicant over the age of 18.

Significant Investor Extension stream

This visa is for subclass 188 Significant Investor stream visa holders, allowing for up to six years on a subclass 188 visa from date of original visa grant.

The applicant must continue to demonstrate they have a qualifying business, unless the Minister is satisfied that the applicant has made an attempt to operate a qualifying business in Australia.

Premium Investor stream

The applicant must demonstrate a genuine intention to have a complying investment of AUD$15 million for the whole of the visa period. A completed Form 1412 – Deed of Acknowledgement, Undertaking and Release signed by each additional applicant over the age of 18 is also required.

Entrepreneur stream

This visa is for applicants who have proposed a complying entrepreneur activity and have a genuine intention to operate and continue the complying business in Australia. The applicant must also be under 55 unless the nominated state or territory government determines the complying entrepreneur activity is of exceptional economic benefit. At time of application the applicant must also demonstrate competent English and sufficient funds to settle in Australia.

Why Choose Impex Law?

The whole ‘lawful visa acquisition’ process can be one lengthy and paperwork intensive task. Our Immigration Lawyers have helped over a thousand people with their immigration cases and know exactly what is required to get the immigration process done smoothly. Impex Law will make the whole process easy and comfortable for you. You would only have to answer a few simple questions on our Immigration page, and we will get back to you.

Subclass 482 – TSS Visa

The Temporary Skill Shortage visa (TSS visa) subclass 482 replaced the Temporary Work (Skilled) Visa subclass 457 in March 2018. The Department of Home Affairs has published a newsletter covering the changes made to the skilled visa program and transitional arrangements for pipeline applications processed after the implementation of the TSS visa program.

TSS Visa Program

There are three options available under the TSS visa program: 

Short-term stream 

This is for employers to source genuine temporary overseas skilled workers in occupations included on the Short-term Skilled Occupation List (STSOL) for a maximum of two years, or up to four years if an international trade obligation applies. Capacity for visa renewal onshore is allowed once only. A requirement of an International English Language Testing System (or equivalent test) score of 5, with a minimum of 4.5 in each test component applies. Genuine temporary entrant (GTE) requirements also apply to this stream.

Medium-term stream 

This is for employers to source highly skilled overseas workers to fill medium-term critical skills in occupations included on the Medium and Long-term Strategic Skills List (MLTSSL) for up to four years, with eligibility to apply for onshore visa renewal or permanent residence after three years. A requirement of an International English Language Testing System (or equivalent test) score of 5, with a minimum of 5 in each test component applies. 

Labour Agreement stream 

This is for employers to source overseas skilled workers in accordance with a labour agreement with the Commonwealth on the basis of a demonstrated need that cannot be met in the Australian labour market and standard visa programs are not available, with the capacity to negotiate a permanent residence option. 

Eligibility for all TSS visa applicants 

Work experience 

At least two years’ work experience relevant to the particular occupation is required. Policy settings are outlined in the TSS visa Procedural Instructions. In broad terms as per the interim guidance for agents: 

  • Work experience will be considered flexibly in the context of the nominated occupation and industry practices. 
  • The work experience should have been undertaken in the last five years and would need to be calculated in terms of full-time work. Part-time work experience may be considered. − Experience gained as part of the research components of a Masters and/or PhD may be considered as work experience for relevant occupations, such as medical and research occupations. 
  • Experience gained through clinical placements and internships may be considered as work experience for medical practitioners, including Resident Medical Officers. − The internship component of the Professional Year Program may be considered as work experience for relevant occupations. 
  • Performance experience gained while studying may be considered for applicants with a performing arts occupation.

Labour market testing (LMT) 

LMT is mandatory unless an international trade agreement applies

For nominations lodged on or after 12 August 2018 unless alternative requirements apply:

  • LMT must have occurred within four months before lodging the nomination.

 Note: multiple positions in one advertisement are acceptable.

  • At least two advertisements of the nominated position will need to be published in Australia, in English, and should include the following information: − 
  • the title, or a description, of the position; − 
  • the skills or experience required for the position; −
  •  the name of the approved sponsor or the recruitment agency being used by the sponsor; and
  • the annual earnings for the position unless the annual earnings will be lower than AUD96,400. It is acceptable to publish a salary range, for example, AUD80,000 to AUD90,000.
  • Multiple methods are recognised and include:
  • prominent or professional national recruitment websites; − 
  • national print media including national newspapers or magazines that are published at least monthly and marketed throughout Australia; 
  • national radio;
  • on the business’ website, if the sponsor is accredited. 

Advertised positions must remain available for application for at least four weeks from first publication regardless of the medium used.

LMT via general classified websites or social media platforms, such as Twitter, Facebook or Instagram is not recognised. LinkedIn’s online recruitment platform is acceptable. Job vacancies restricted to LinkedIn profile members only are NOT acceptable

Choice of acceptable media used for the advertisements is not limited, that is two advertisements may appear in newspapers on separate occasions or simultaneously in two different media. An authorised party may undertake the advertising as there is no requirement for the actual sponsor to place the advertisements.

Alternative requirements apply for ‘select occupations’ and ‘select positions’ such as for outstanding and internationally recognised talent in sport, academia or as a top chef. Also included are changes due to business restructures or where the annual earnings are not less than AUD250,000 or for particular medical personnel.

It is mandatory under the Act to provide evidence with the nomination application of the sponsor’s efforts to find suitably qualified and experienced Australian citizens or permanent residents to fill the position/similar positions, that is, a copy of advertisement(s) and a receipt for any fees.

To avoid an unnecessary unfavourable outcome the Department of Home Affairs has noted that where fees were paid for advertising the receipt must be attached to the nomination application, as well as a copy of the relevant advertisement. 

Where the nominated position is an intra-company transfer, alternative evidence may also include evidence of such a transfer in lieu of advertising.

Minimum market salary rate 

Employers must pay the Australian market salary rate and meet the Temporary Skilled Migration Income Threshold requirements. See Migration (IMMI 18/033: Specification of Income Threshold and Annual Earnings and Methodology of Annual Market Salary Rate) Instrument 2018.

Character 

Mandatory penal clearance certificates to be provided. Where an applicant, and any family member included on the application, is sponsored by an accredited sponsor, references from the accredited sponsor can be attached confirming that the applicant and any family members are of good character and have not been convicted of any criminal offences, as an alternative to providing police certificates from countries other than Australia where required. All applicants and any family members included on the application must still provide any required Australian Federal Police clearances.

Workforce 

A non-discriminatory workforce test to ensure employers are not actively discriminating against Australian workers.

Training requirement 

Employers nominating a worker for a TSS visa will be required to pay a contribution to the Skilling Australians Fund

Stages For Subclass 482 Visa

There are three stages:

1. Standard Business Sponsorship 

To sponsor an employee a company needs to become a standard business sponsor. While a company’s standard business sponsorship is valid several applicants can be nominated, as long as the company continues to demonstrate the capacity and need for the nominated position. In order to become a standard business sponsor a company needs to provide certain documents to prove that it is operating in Australia as well as meeting Training Benchmark A or B. For more information on this see Migration (IMMI 17/045: Specification of Training Benchmarks and Training Requirements) Instrument 2017 and the Sponsorship obligations for Standard business page.

2. Nomination 

To meet the criteria the applicant must be nominated for a position. A standard business sponsor may nominate an applicant for an eligible position by demonstrating the capacity to nominate the applicant and the need to have the position filled. The sponsor also needs to complete Labour Market Testing, unless an international obligation applies, to demonstrate that there is no qualified Australian citizen or resident available for the position.

3. Application 

The application can be assessed when the associated nomination has been approved. At this stage the applicant must demonstrate English language proficiency requirements applicable to the relevant stream, as set out at English proficiency above. The applicant must also demonstrate they have the appropriate skills and qualifications to fill the position.

Global Talent Scheme Pilot 

The Global Talent Scheme is a new visa scheme aimed at attracting highly skilled global talent within technology related industries. This is part of the ongoing reforms to skilled visa programs to ensure that Australians have priority for Australian jobs but acknowledging that there are times when these skills are not available domestically.

The scheme consists of two streams: the established business stream and the start-up stream. The established business stream is aimed at publicly listed companies or those with an annual turnover of at least $4 million for each of the past two years. The nominated position must also have minimum annual earnings of $180,000.

The start-up stream is aimed at newly-established businesses with STEM-related fields, being science, technology, engineering, and math, including but not limited to agriculture and medical technology. The minimum annual earnings of the nominated position cannot be less than the Temporary Skilled Migration Income requirements as set out in legislative instrument IMMI 18/033. 

For technology related businesses who have had highly valued staff paid more than $180,000 annually or highly skilled employees affected by the 457 visa changes, relief may be found through this scheme.

Unlike the 457 or TSS visa schemes, the Global Talent Scheme will not have a set list of occupations or restrictions on permanent residency or age. Successful applicants will be issued with a four year TSS visa, with permanent residency available as an option after three years.

The scheme will commence in July 2018 and will run for 12 months.

Why Choose Impex Law?

The whole ‘lawful visa acquisition’ process can be one lengthy and paperwork intensive task. Our Immigration Lawyers have helped over a thousand people with their immigration cases and know exactly what is required to get the immigration process done smoothly. Impex Law will make the whole process easy and comfortable for you. You would only have to answer a few simple questions on our Immigration page, and we will get back to you.

What Does Discharge Of Mortgage Mean?

Once the principal or secured sum has been repaid, a discharge of mortgage can be obtained from the mortgagee. The procedure involved is set out in s 84 of the Transfer of Land Act 1958. The approved form must be used and lodged along with the certificate of title for registration. Once the discharge has been registered, the property ceases to be subject to the mortgage. A discharge of mortgage operates to release the land from the mortgage security.

No stamp duty is payable on a discharge of mortgage.

A mortgage can be registered over one or more folios of the register. There are situations where the mortgage is registered over a number of parcels of land, often but not always, in a number of different titles. A mortgagor may seek to discharge the mortgage only insofar as it relates to one of these parcels. This is known as a partial discharge of mortgage.

A mortgage may be partially discharged by using the approved form and lodging it along with the certificate of title for registration: s 84 of the Transfer of Land Act 1958.

If the whole of the land in a folio of the register is being discharged it is only necessary to insert the relevant volume and folio number in the land description panel. However, if only part of the land in a folio of the register is being discharged it is necessary to competently describe the land to be discharged. Usually, but not always, this is done by lot and plan number.

Section 8A of the Sale of Land Act 1962 prohibits the sale of land that is part of a title unless it is a specific lot on a certified or registered plan of subdivision. A mortgagee, therefore, will not give a partial discharge of mortgage that would effectively leave the mortgagee with an unsaleable security such as part of a lot and/or part of the land in a certificate of title. The reason for this is that if a mortgagor were to default, the mortgagee would not be in a position to exercise its power of sale (s 77 of the Transfer of Land Act 1958) as it would have a parcel of land which was unable to be transferred.

Often during the subdivisional process the whole of the land to be subdivided is mortgaged to finance the development. A plan of subdivision is drawn up, certified by council and registered at Land Use Victoria. The mortgagee must consent to the registration of the plan of subdivision and the new titles for the various lots will issue showing the mortgage as an encumbrance.

It is possible to sell a lot on an unregistered and/or uncertified plan of subdivision provided the relevant provisions of the Sale of Land Act 1962 are complied with. This practice is known as ‘pre-selling’ and the type of contract used for ‘pre-selling’ is known as a ‘prescribed contract of sale’ as defined in s 9AA(7) of the Sale of Land Act 1962. Where a plan of subdivision has not yet been registered, the land can still be identified and sold by using the lot and plan number. This gives the land a unique identifier. The purchaser will also have mortgage documents drawn up using this unique identifier to describe the proposed security property.

Once the plan of subdivision has been registered details of the new volume and folio are communicated to the purchaser and ultimately the incoming mortgagee. Sometimes, but not always, these new details are inserted and/or added into the transfer and any incoming mortgage.

At settlement of an off the plan sale, it is not unusual to give a partial discharge of the mortgage insofar as it relates to a particular lot on the registered plan of subdivision. This is handed over at settlement together with the certificate of title. If the certificate of title has not yet issued, the partial discharge of mortgage will be endorsed with an order to register for lodging by the incoming mortgagee. The partial discharge will then be registered with the transfer and incoming mortgage as follower dealings. It is not unusual for all these documents to describe the land only by its lot and plan number.

The first step to discharge your mortgage would be to fill a discharge form. The process can be complicated and our lawyers would help make the procedure easier for you. If you need any help, you can contact us by clicking on the button below.