Commercial AdvicesSilvia Pace Group
Commercial advices

Silvia Pace Group provides commercial advices on a wide range of property and business related issues/aspects. We can offer commercial advice where necessary to our clients on individual issues, or consult on projects as a whole.

Silvia Pace Group runs a pro-active campaign to keep its clients and prospective clients informed about issues pertinent to their businesses and their property ventures. Several of these publications are detailed below.

 

IMPORTANT NEW LEGISLATION EFFECTING BUYING, SELLING & RENTING LAND
THIS LEGISLATION ALMOST CERTAINLY WILL EFFECT YOU.

Important legislation has been introduced which will effect most people buying, selling, renting, or retaining property. This legislation is in respect to installation of Residual Current Devices and Hard-Wired Smoke Alarms.  

Fines for non-compliance range up to $100,000.00.

Please click the below links to the relevant government websites with further information:

If you are Buying:

RCD Information: http://www.commerce.wa.gov.au/EnergySafety/RCD/homeowners.htm
Smoke Alarm Information: http://www.fesa.wa.gov.au/internet/upload/917983962/docs/Buying_Properties.pdf

If you are Selling:

RCD Information: http://www.commerce.wa.gov.au/EnergySafety/RCD/homeowners.htm
Smoke Alarm Information: http://www.fesa.wa.gov.au/internet/upload/917983962/docs/Buying_Properties.pdf

If you are Renting an investment property:

RCD Information: http://www.commerce.wa.gov.au/EnergySafety/RCD/agents.htm
Smoke Alarm Information: http://www.fesa.wa.gov.au/internet/upload/917983962/docs/Rental_Properties.pdf

 

CASE IN POINT

Published article from Australian Hotels Association (WA) magazine.

Valuable advice for leasehold businesses – beware the devil in the detail!

Some clauses in leases over business premises can cost purchasers and vendors thousands of dollars more than contemplated where the leases are not fully understood and interpreted.

Purchase and sale contracts already in effect presume that the lease agreements have been checked and the financials assessed, pre-contract, by assorted professionals, and the purchaser and vendor believe they are in a firm position to proceed. However, as business and property conveyancing specialist Silvia Pace from the Silvia Pace Group explains, where expert advice was obtained pre-contract, it is often their strict interpretation of a clause in isolation of the specific circumstances and context that is problematic. And the assumption that these clauses are standard can be very costly.

“For example, the parties are aware that there is a clause in a lease agreement that allows the landlord to review the rent periodically as stated (to market, CPI or other method). The business viability for the purposes of calculating the sale price by the vendor and the purchase price by the purchaser includes the assessment of this important clause. However, at the time of signing the contract, the purchaser is often unaware that the landlord has not opted to review the rent in accordance with this clause for many years and under many leases, can exercise this right retrospectively at any time. The Vendor conversely, is aware the landlord has not elected to review the rent for some years, wrongly believing the issue unimportant and that the landlord has waived its rights to do so,” Silvia said.

“We have seen landlords exercise this right retrospectively and in an untimely manner, being a significant blow to a business’s feasibility both immediately and into the future. Complex and costly disputes can arise between the landlord and vendor, and the vendor and purchaser regarding the rental arrears, the new rental increase, the ongoing impact on the financial viability of the business, and the vendor’s representations in relation to the contract.”

Silvia warns, “The most important step you will take in purchasing a business is getting the right advice and asking the right questions at the right time – and that is before you have signed your contract.”

Meeting with a consultant like Silvia can remove the risk of falling victim to a rental review clause. “It is through our due-diligence and pre-contractual advice that we provide our clients with the means to avoid such eventualities and potential costly legal scenarios.”

 

Published article from Australian Hotels Association (WA) magazine.

Advice on changes to code of practice from the Silvia Pace Group.

If you own a resort, hotel, motel, club or strata unit that has pool facilities, then you may be affected by the new Health Department regulations. The consequences of not adhering to this change in legislation include the closure of swimming pools. In the interests of public safety, the Health (Aquatic Facilities) Regulations 2007 and the Code of Practice for the Design, Construction, Operation, Management and Maintenance of Aquatic Facilities require that qualified personnel operate, manage and maintain pool facilities.

As business and property conveyancing specialist Silvia Pace from the Silvia Pace Group explains, for some facility owners
this will mean obtaining qualifications through approved training programs.

“The Royal Life Saving Society Australia offers the full range of courses required in accordance with the new legislation. This includes first aid and emergency care, swimming pool operations, and lifesaving. With a minimum cost of $310 – which is GST-free – participants will, upon completion of their course or courses, receive a compliance ticket that is valid
for three years,” Silvia said.

“To find out which training courses facility owners are required to attend, they must first contact the Health Department to determine the classification of their facility. Once this has been established, the next step is contacting an approved training institution to enrol in the relevant course. Existing owners need to have completed their compliance training by October 2009.”

Silvia advised that in line with the new legislation, an owner/manager operating a Group 3 classification facility (this is generally the classification for hotels, motels and resorts) is required to have a qualified person either employed at the premises, or contracted on a regular basis for the purpose of pool maintenance. In addition, they must have on-site a qualified person with a first aid certificate, who has also completed an approved patron rescue course.

For additional information, please visit www.public.health.wa.gov.au

To find out when and where upcoming courses are taking place, contact The Royal Life Saving Society Australia on 9383 8200 or visit www.rise.com.au Alternatively, for advice on this or other matters relating to your commercial enterprise, please contact the Silvia Pace Group on 9381 1633.

 

Published article from Australian Hotels Association (WA) magazine.

Painting obligations on operators of leasehold premises.

Most leases contain a “painting clause” requiring the existing tenant to paint the premises (internally and externally) periodically and at their own cost. For existing tenants or purchasers looking to acquire a hotel or tavern, this clause should be thoroughly reviewed and understood, as the responsibility and cost of compliance can have a significant impact on the financial viability of the business.

Hotel and taverns are sizeable structures and so the painting works (and maintenance) on these buildings can be costly. Here at Silvia Pace Group, we have seen an example where the tenant decided to undertake a progressive painting programme over the five-year term of the lease, to spread out the work and costs. Whilst this approach appeared prudent, it was adopted without consideration to provisions of the paint clause in the lease, which required the premises to be painted internally and externally “in the last six months of the term”. The landlord insisted the premises be painted in the last six months, as the clause specified and so, painting had to be done twice in a period of five years – at a significant cost to the tenant.

Our recommendation is this: be clear on the specific terms of the “paint clause” in the lease and obtain good accounting, legal and commercial advices. As an existing tenant, adhere strictly to the terms of the clause. As a prospective purchaser, ensure that you have the landlord confirm that the existing tenant has complied with the painting clause before an agreement is signed or the settlement proceeds so you do not inherit the works. Lastly, make sure the financials of the business have been scrutinised to disclose that the painting works have been completed and allowance has been made for the painting of the premises in terms of the financial viability of the business.