Preparing to do something a little out of the ordinary with your funds? Or, maybe you just want legal assurance for a standard agreement.
At TMFG, we say, don’t risk it. Equip yourself with legal advice, it’s only going to strengthen your investment. When it comes time to cross the 'T's and dot the 'I's it pays to have a solicitor in your court. Pays, literally.
Speaking with Andre Ong at Sharrock Pitman Legal in Glen Waverley and discussed how a Solicitor can help avoid future (expensive) headaches, we've narrowed it down to a few rules of thumb for you…
1) Prevention is always a better tack
Long and expensive legal disputes can often be avoided if there is a good, solid agreement done initially (e.g. a Shareholders Agreement between shareholders of a company, a Binding Financial Agreement between spouses, an effective Employment Agreement between employer and employee).
Just like you’d get your car checked over by a mechanic before a long road trip, strong legal advice can insure you if a problem does arise. It’s often way more efficient and cost-effective to obtain legal advice at the beginning of the investment journey.
2) Beware of the unusual
Doing something that sounds a bit out of the ordinary? These quirky, albeit risky journeys can sometimes be the best investments, but that doesn’t mean you should push forward at any cost.
Slowing down and checking with a lawyer for any unusual legal issues or unintended consequences will add confidence and value to your next step(s). A simple chat early on helps safeguard you and make sure things are on the right track. It might not turn out to be so unusual but always better to not take the risk.
3) Don’t just get advice, get the right advice
Be cautious receiving advice from professional advisers who are not qualified lawyers. A person or company cannot lawfully engage in legal practice (including giving legal advice), unless they’re authorised as an Australian Legal Practitioner.
This may include drafting agreements and giving advice about legal matters and strategy.
If someone is giving you legal advice, check credentials and move on if it doesn’t feel right. It always pays in the long run to have the right information upfront.
Some examples of difficult situations Sharrock Pitman Legal have helped clients with, which have been made easier with legal advice:
Example A)
An unusual Property Sale
A property owner obtained planning permits for a large development site and was looking to on-sell the site and permits. A Contract of Sale was signed, without obtaining legal advice.
No deposit was obtained and the purchaser was a ‘$2.00’ company. There were no director guarantees and the contract did not contain appropriate special conditions to deal with the critical issue of contamination at the site, which left the contract uncertain and potentially unenforceable.
As a consequence, the purchaser was able to walk away from the deal leaving the property owner to start again, although, this time with the benefit of having legal advice prior to entering into a new deal.
With our input, a new Contract of Sale was uniquely drafted to properly address the complexities of the transaction, and fully protect the Vendor. This new contract put them in a much stronger position when the next purchaser encountered planning issues and was looking for a ‘loophole’ out of the sale.
Example B)
An SMSF Property Purchase
When purchasing a property through their Self-Managed Super Fund (SMSF), a purchaser narrowly avoided complications by seeking legal advice before proceeding.
The purchaser was ready to sign the contract for the property in their own name and pay the deposit from their own funds. As the deposit amount was above the relevant threshold for personal superannuation contributions, a significant tax bill would have resulted when they later nominated the SMSF trustee as the successor purchaser, prior to settlement.
Fortunately, having sought our advice prior to signing the contract, the purchaser was able to set up their new SMSF prior the deposit being paid, thereby avoiding unnecessary expenses down the track.
Are you entering a contract or investment you’re not quite sure about?
A no obligation, no fuss, a personal guarantee from our friends at Sharrock Pittman…
“All Sharrock Pitman Lawyers are available by phone and email to discuss any initial queries you may have at no charge. We will always scope any necessary legal work, giving you a fixed price before we start any chargeable work. “
Sharrock Pitman Legal
www.sharrockpitman.com.au
Telephone: (03) 9560 2922
Email: sp@sharrockpitman.com.au