On 1 July 2018, new provisions in the Corporations Act 2001 come into effect that will significantly limit the enforcement of contractual rights that apply on the occurrence of various insolvency related events (new regime). At this stage, the Commonwealth Government has introduced an exposure draft, with the final provisions of the New Regime yet to be finalised.

The ispso facto clause and the new regime

From 1 July 2018, amendments to the Corporations Act 2001 (Cth) in the form of a new ‘ipso facto’ regime come into effect. The new amendments are part of the Federal Government’s commitment to assisting builders in financial distress.

Background

When pursuing outstanding owners corporation fees, suing the right person or entity at the right time is critical. 

If you get this wrong, you will not recover any money.

So, who is the owner?

Section 3 of Owners Corporations Act 2006 and the Subdivision Act 1988 state:

“an owner is a person who has an estate in fee simple in the land (except a mortgagee), or is empowered by or under an Act to convey an estate in fee simple in the land in an identified folio under the Transfer of Land Act 1958.”

The High Court of Australia recently decided that when a landlord goes into liquidation, the liquidator may be able to disclaim a lease granted by the landlord.

For a tenant there can be very serious and very expensive consequences if a lease it has taken is disclaimed by its landlord’s liquidator.

A tenant may, however be able to take some steps to protect itself and avoid the expensive and significant consequences of a disclaimer of a lease by the landlord’s liquidator.

What does disclaim mean?