Professional negligence is the failure of a professional to act with reasonable care and skill in carrying out their services.
The purchase of a property is for most people the largest investment in their life. When an error is made or when the advice provided is wrong, the consequences can lead to losses caused by the need to pay interest, penalties, additional taxes and duties, and even fines.
In recent years conveyancers in New South Wales have emerged as the main application for claims in legal negligence matters. This has primarily been caused by conveyancers failure to understand changes in the legislation, particularly the laws that relate to people who may be classed as foreign investors and subject to the Surcharge Purchaser’s Duty.
Surcharge Purchaser Duty (SPD) is an additional duty payable by foreign purchasers of residential land in New South Wales. If you are classified as a “foreign person” for the purposes of the Duties Act 1997 (NSW), you must pay the SPD which is currently 8% on the taxable value of the residential land being purchased.
A permanent resident of Australia may be classed as a foreign person, but can avoid the SPD satisfy the residency requirement. A conveyancer’s failure to properly advise on the residency requirement has failed in their duty of care performing in the profession at a standard below that which is acceptable. The damages usually caused include an obligation to pay the SPD, a fine for incorrectly declaring residential status, and interest.
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