Compton’s Conundrum: What a Clever Girl!

Family lawyers deal with those who were once in love but now hate each other in the most powerful manner imaginable. Because those relationships usually start somewhere in the bedroom, we are often introduced to living arrangements that sometimes shock but most times confound.

Some years ago, I had a client seek an initial conference before taking legal action. He indicated that he’d been in a de facto relationship for four years and wondered if he’d had an action against his spouse because they were separating.

The client, who we will call Mr X, stated that he’d been in a relationship with Mrs X for a period of four years. It was Mrs X’s home prior to him arriving on the scene. Mr X had paid all the mortgage payments for those four years. In short, I indicated that he would have a claim in relation to the payments he’d paid into the property.

Mr X stopped me then by saying, “there is more I need to tell you. There are three other men contributing to the property.” Upon further exploration, Mr X advised that there were three ex-husbands who had agreed, as part of their settlements, to contribute to the mortgage.

This is one clever lady! She has three ex-partners and a current partner contributing to her property. The figures that he gave me indicated that she was now profiting permanently from these mortgage repayments. She was receiving a surplus in advance of the mortgage. She was soon to have four ex-partners and would probably be on the hunt for another as a means of enhancing this brilliant business concept. She would then have four ex-partners and a current partner contributing to the property which would further increase the surplus.

As the cat in the hat said, “that is not all. No, that is not all.” Mr X advised me that the previous husband still lived downstairs. I quickly noted, “this makes no difference to your claim.” I said this with some confidence until he filled me in that each Wednesday night, the entrepreneurial lover spent the night with the ex-husband. In my fact finding I was able to identify that six days were spent with Mr X and one with Mr W.

I made the error of assuming that this was purely for the purpose of dinner or a visit to watch television. I was a little confounded to find out that it was for conjugal purposes as well.

I’m not one to judge! If it works, and it doesn’t harm anyone, keep on going. I then tried to work out whether there was such a thing as tenants in common on a de facto relationship. In other words, was my client only in a de facto relationship for 6/7ths of the time. I decided this was far too difficult for my simple mind and determined that I should remove myself from the scene.

A couple of barristers I have spoken to about this case have indicated that it is the cleverest form of prostitution they’d ever heard of. The provision of short-term services for a long-term investment is the best return on a physical investment that they’d ever found.

If this were a business concept, I would have thought as the lady got older, her asset value would have depreciated. Obviously not! All that happens as you get older, is your eyes move north, to somebody who is older than you who can contribute to the business.

Love thy neighbour and love thy asset.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email

Love Thy Neighbour

I was recently invited to speak on the subject of Strata at the Rose Bay RSL Club. It was a free talk and therefore we amassed a crowd of 120. At the end of my one hour presentation, I took questions from the floor. This was one of the most illuminating experiences in relation to the industry I operate.

As a solicitor, I deal with the rights and obligations of parties to a dispute. These are legal rights set out either in legislation, under common law or within a contract. I am trapped within those legal principles and have been taught that complying with these principles will resolve all issues. This night proved to me that this teaching was erroneous.

I took numerous questions from the floor that the law was not able to answer. There were general questions relating to experiences and in some cases awful experiences, suffered by the participants in the room. It confirmed the opinion that strata management laws fail because they do consider human frailty.

Most, if not all the complaints related to discourtesy, unfairness, bullying, outright rudeness, and human indecency. For many of them, I didn’t have a legal answer, because none existed. It demonstrated, not only the frailty of human beings, but the frailty of the legal system we live in.

24% of Australians live in Strata or Community living. It is primarily popular because it is all that is available. Most don’t want to live in a strata complex. I know for our last property, we refused to look at anything that had a title with SP in it. The one year of living in a strata plan taught me that it wasn’t a place where I’d want to live.

Lawmakers believe that if you put laws in place, people will abide by them. Obviously not where I come from! Rules were meant to be broken and most people tried. Rules don’t make life better to live. In actual fact, rules give those who wish to abuse them, the power to be more abusive.

If strata living is to work in this country, we need to find a way to love thy neighbour. Maybe not love them but treat them with respect and decency that all of us wish to be treated with. We have done huge amounts of corporate and team training to allow inhomogeneous groups to get on in a workplace, why can’t we do it in our home?

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email

The Third Wheel

There are two parties to a transaction:

  • A buyer; and
  • A seller.

We spend most of our time training clients regarding the duties we owe to both buyer and seller. Often we forget the third wheel in this relationship. Us!

Every business owes a duty of care to those it deals with to take all reasonable steps to avoid harm that it could reasonably foresee. This duty is owed to both the seller and the buyer. In other words, as a professional, we must always act in a way that prevents either party from suffering damage.

Every business owes a fiduciary duty to the people who pay us. That fiduciary duty requires us to act in the best interest of our client. As a real estate agent, buyer’s agent, stock and station agent or business agent, we generally get paid by the seller and our fiduciary duty is owed to that person. As a strata manager, we must always act in our owner’s corporations best interest.

All of us do business to make a profit! If you are not doing it to make profit, ultimately, you will go broke. And therein lies our conundrum! When faced with the conflict between our own interest and our client’s interest, which one comes first?

This is not unique to the property industry. As a solicitor, I must always act in my client’s best interest. Sometimes, the client’s best interest might be to settle the matter quickly without indulging ourselves with the legal process. This, however, is not always in the best interest of the legal practice. The legal practice may benefit more from protracting the business to ensure that they squeeze as much juice out of the economic lemon as possible before finding a settlement. Yes, many solicitors do that! This is not the policy of Leverage Solicitors because we cannot contribute to success if we protract your legal battles. Nonetheless, this conundrum is often at the top of mind.

When a real estate agent or buyer’s agent negotiates, they have two completely different functions:

  • The real estate agent is interested in obtaining the best price for their vendor;
  • The buyer’s agent is interested in obtaining the lowest price for their purchaser.

If the parties are too far apart, neither will obtain their commission unless they condition their clients to compromise.

This is a pivotal emotional position. The real estate agent needs to convince their vendor that they need to go lower whilst the buyer’s agent has to convince the purchaser to go higher. In these circumstances, the interest of the deal becomes more important than that of the parties. When a deal gets close, the question is whether the agent will put their own self-interest in front of their client’s interest when gauging their behaviour.

This is by no means a criticism of the parties. It is merely a comment on the complexities of what we deal with on daily basis as members of the property industry. We work in an environment where there are so many hidden issues that we don’t face the complexities we are confronted with. The question is, when you are faced with a complex issue, and this complex issue means that advising your client to take a particular action will prevent you from earning a commission, are you brave enough to give that advice which is not in your favour?

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email

Reform Update 8/3/18

The Property, Stock and Business Agents Amendment (Property Industry Reform) Bill 2017 was passed by the Legislative Council yesterday afternoon without amendment. The next step in this process will be to draft the necessary revisions to regulations and revision of the CPD Guidelines.

We will continue to keep you updated.

Read more at:

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email

Economics is Bad Business

What a conundrum! Good budget restraint and good economic policy is often bad business for the state. This is not a social welfare bleat, but a whinge about the lack of vision by Government. Jim Collins in his book, Good to Great, indicated that, “the best economic decision may not be the right one.” All the good business coaches I have spoken to indicate that balance sheet management, although necessary, should only be used as a tool and not necessarily as a reason to determine. As a businessperson, balance sheet management is short sighted and does not lead to a sustainable growing business.

In the late 1920’s, as Wall Street was crashing, a man called Bradfield determined that New South Wales needed a bridge. The north and southern sides of Sydney needed to be joined. He didn’t just do a bridge of two lanes as they would do today. He built an eight-lane bridge spanning one mile. He also ensured that there were train tracks running across that bridge so that the north and south were connected by rail. What an act of vision.

The critics at the time criticised the then premier JT Lang for undertaking such a momentous project. In fact, it almost broke the state when the depression struck. It was the drive of Bradfield that ensured that the bridge was completed and opened on the 19th of March 1932.

At the time, Bradfield was castigated and criticised for his vision. Well, maybe today we should build a statue and deify him for his vision. It is unimaginable what Sydney would have been without the Harbour Bridge.

You might be surprised to learn that the last urban plan done for Sydney was done in 1930. 88 years have passed, and we are still planning to plan. As Benjamin Franklin once said, “fail to plan – plan to fail”.

Throughout the decades, the government has always looked for ways of cutting the budget. They removed the Bondi tram; took away the Castle Hill railway line; took away the railway line which went down the left side of Lake Macquarie; built two lane freeways which were too small; and removed the Sydney city trams. This was progress? The government is now rebuilding the Castle Hill line and wanting credit for it. Although they are not building the Bondi Tram, they have a light rail system being built in the centre of Sydney and branching out to Moore Park and Randwick.

These decisions may have been made in the past which reduced the budget and provided some form of economic surplus but it’s just bloody bad business. Removing infrastructure is just bad business!

Dear Gladys wants to pull down the Cahill Expressway to build some new buildings. Gladys, don’t think. Leave our infrastructure alone. Let’s make decisions with some foresight not decisions on balancing a budget.

I know this is a conundrum for all politicians! Do we balance the budget, or do we dare to make risky decisions? I’ll opt for risky decisions any day.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email

Democracy is stuffed in Strata Management

Once upon a time there was a requirement that at least a quarter of lots needed to attend an owner’s corporation meeting. If you could not attend because you were overseas, you could appoint anyone you trusted to have your vote at a strata scheme.

The amendments to the Strata Schemes Management Act 2015, introduced in December 2015, have made strata schemes totally undemocratic:

  • A person can only hold one proxy for up to 39 lots and 5% of lots thereafter. This means that, if a building is filled with investors, they have to find a number of people who hold proxies to vote on significant issues.
  • The quorum requirements are equally as concerning. Whilst the legislation does state that a quorum is still 25%, it does permit the chairman to hold the meeting once 30 minutes has passed.

I know the legislation was designed to stop proxy harvesting. That position by itself indicates that the government did not trust most lot owners. In other words, they did not trust an owner to determine who they wish to give their vote to when significant decisions were to be made.

These provisions favour residents over investors. No one should be surprised that Dear Gladys’ government puts in place laws which impact on investment, but it is always going to affect those who aren’t on site. Often a strata meeting is held on site or nearby. If you are a landlord, you are unlikely to be able to attend all of the meetings because you are out of area. You can’t give your proxies to the chairman anymore and you can’t find somebody within the strata scheme who will support your position. Considering the investor is not onsite, finding that person is often difficult. The Residential Tenancies Act 2010 already demonises landlords, this is just another dagger from Lady Macbeth.

The ability to call a meeting if a quorum is not available gives the bullies an advantage. For a government that constantly wishes to stop bullying on the playground, it makes laws which allow bullying in strata to occur. Aggressive people within a strata scheme can make meetings so uncomfortable that no one wishes to attend. They can also act in such an intimidating way that no one wishes to go to a meeting and show which way they are voting.

Let’s think through that; no one wants to attend and there is no one to give a proxy to. Under 25% will then be able to control the owner’s corporation. We are now seeing this in some of our consultancy work whereby some are too scared to attend owner’s corporation meetings and have no one at the owner’s corporation meeting who is game enough to attend and hold their view.

I can hear the supporters now saying, “well the owner’s corporation could go to secret ballot or postal voting.” First, secret ballot means you need to attend and face the intimidation; and secondly, postal voting only occurs if you’re able to attend the meeting to vote for it.

The new legislation has been drafted in such a way that two people can control an owner’s corporation. The legislation may have been well-meaning, but democracy is now stuffed.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email

Purple’s Parting with the Green

Purple is often made up of two colours, blue and red. In recent times, the purple has had to let go of the green.

Purplebricks has been made to pay a fine for their activities in Queensland. We have formerly written in relation to Purplebricks activities, in our article “Pinocchio comes in Purple” ( about concerns with the misleading and deceptive conduct of Purplebricks.

Recently, Purplebricks has been required to enter enforceable undertakings regarding their activities. (

Purplebricks breached Australian Consumer Law and the Property Occupations Act through its actions between 2016 and 2017 in relation to:

  • Not advising consumers that their fixed fee payable was not refundable regardless of their property selling or the agreement was cancelled; and
  • failing to fulfil some of its regulatory obligations about the use of appropriate accounts software.

They have been required to pay a $20,000 fine for these breaches. Our article dated November 2017 alerted our readers to this business model.

Leverage has a conveyancing arm which deals with a number of consumers. We have had a number of clients who have interviewed Purplebricks to list their property and ultimately not used them. Reason’s given was that they were not aware that the flat fee was paid upfront and not returned if the property didn’t sell. My client’s concern was, “where is their incentive to sell my property? I cannot see how they will work for my property if I pay them everything up front.”

We are in an innovative place in the real estate industry. The advent of places like Purplebricks and other strategies is good, provided that all consumers are aware of the real costs and most importantly the reality of the business model. It was because of this confusion about costs and the lack of knowledge about the program which caused Purplebricks in Queensland to suffer a fine and the indignity of published undertakings. This is not only protection for the consumer, but protection for other businesses.

The Queensland Government have rightly put in place laws which ensure that there is an equal playing ground between competitors. No one should be able to steal an advantage over a competitor by not complying with the law.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email

Compton’s Conundrum – The Credibility Noose

I want to understand why it is so important for our credibility that we tie some material around our neck and hang it from our throat to our belt. As a solicitor, I can’t appear in court without a jacket or a tie. If I fronted up to the Bar of any court in Australia, without a tie, the judge would refuse to hear me. So what is so powerful about this five foot piece of material? We know that Louis XV, 200 years ago, took a liking to material tied around the neck of some Czechoslovakian. We understand that over a period of time it became a fashion statement. Yes, I can understand the fashion statement but I don’t understand the credibility attached to it.

Throughout many businesses, if you do not go to a meeting with a tie, you are considered to be a plebe. You are not taken seriously and most of all, you are considered a yobbo. In recent times in Sydney and other cultural parts of the world, ties aren’t being used in business circles. Consider Filmmakers or IT professionals. Nevertheless, if you are a professional in the business world, the tie is absolutely paramount.

The tie, to me, looks like the reverse of a hangman’s noose. If you turn it around the other way and tie it to a railing, you could hang yourself. Maybe, it’s a reminder that we are not hanging ourselves when it’s hanging over our belly. Now that’s a problem in itself. If you have been in a good paddock like me, the tie exacerbates the belly. The tie runs along and hangs over the edge like a piece of rope from the hangman’s gallows. It’s distance from the rest of the belly indicates how wide my girth is. It is in itself a distraction.

So why the tie? It doesn’t make us any more intelligent and doesn’t really make us any better looking. And, in Australia we were last week reminded how bloody hot it can get in Sydney when doing business. We saw all these solicitors, supposedly intelligent, walking to the Supreme Court with their jackets and ties on. Are we mad? Do we need some sort of mental intervention to help us understand that we don’t live in Europe.

Don Dunstan in South Australia many years ago was seen as a rebel and eccentric. He changed the dress rules for parliament. Men were to wear dress shorts, short sleeve button up shirts with no ties, shoes and long socks. Don Dunstan indicated that we live in Australia, not in England, and therefore we need to dress cooler for the work day. How sensible! But Don was seen as an eccentric implementing sensible strategies. That in itself was strange.

Can some parliamentarian outlaw ties in the summer season in Australia? We should adopt the short sleeve shirt, no tie, with nice dress pants and comfortable shoes. Why should one piece of material give us credibility and power. Let’s get rid of it. Cast it aside like all the other useless traditions and no longer have the hangman’s noose around our neck.

And, consider, maybe if we get the politicians to loosen the nooses around their necks, the country might be in a better position.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email

Non-Strata Departments

Child lock laws in New South Wales are due to commence on 13 March 2018. This law requires that all owner’s corporations will need to have installed child safety locks on all upstairs apartments in strata complexes by that date.

This week we received an interesting question from one of our regulars. They have a landlord who has three buildings which he lets out to tenants. Although approved for strata, they have never been made strata because he does not intend to sell any of the units.  Therefore, he is not caught by the Strata Schemes Management Act 2015 or the provisions as they relate to strata. Additionally, his buildings were built before the Building Code of Australia was changed to require child safety locks.

We are back at the balustrade problem in the case of Amira vs the Dominican Fathers. We have a building that complies and is not violating any laws but is essentially unsafe for children in upstairs balconies.

It got me thinking; How does this apply to normal property management issues for townhouses, two story houses or those apartments which sit over the top of shops. Well, there may not be any specific laws, but if an accident occurs, the landlord will still be liable.

It is obviously a risk analysis for the landlord. The landlord will have to determine if the risk outweighs the cost of insuring that all the child locks are installed in windows on upper floor apartments. Obviously, we need to be sensible with this approach and make sure the child locks are on the windows where danger is realistic. It may mean that property managers also need to have a look at the balustrades and other safety items in a property.

Most owner’s corporations and community associations in NSW have a simple strategy of advising the owners corporations of their obligations. At most annual general meetings, a motion is placed to recommend that a Work Health and Safety report be gathered for the building. Owners then make a decision whether to take the advice and the information of the strata manager or accept the risk associated with unsafe balustrades etc.

We wonder if it is now a good idea for property managers to make certain that landlords are advised of their obligations in relation to balcony balustrades, staircase balustrades and child locks. Maybe suggesting that landlords obtain a safety report regarding their property to ensure their liability is a good idea. Knowing landlords, they will probably knock you back. If the property manager has taken the step to suggest a safety inspection and the landlord knocks it back, the landlord inherits all liability.

Complying with building standards doesn’t mean that your building is safe. If you don’t take care of safety, the laws won’t take care of you. Property is a great investment, don’t let it be your greatest depreciation.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email

Parent Bank

For us who are far too old, we’ve seen the cycle. The property market goes up; the kids can’t afford a deposit; the kind parents and grandparents lend the deposit and more to the kids.

It is so difficult in this market for young adults to save the deposit that allows them to purchase the property. It used to be 10% but the banks now want 20% to satisfy the loan mortgage insurance. If you’re in a market where the average price is $600k – $1 million, the kids must find a way to save somewhere between $120k and $200k just for the deposit. This doesn’t consider the massive wad of stamp duty that state government wants out of the purchaser. It is a large cost to be placed on any person.

There are many publications that have had articles regarding people in their twenties and early thirties who have given up on their dream of a property. They’ve invested in their lifestyle, rather than investing in property. This is an excellent pursuit until coupledom appears and a family becomes a realistic goal. Then, the necessities of a home become apparent.

This is not the first generation who have had to borrow from parents and grandparents to get into a property. There are a range of options:

  • The parents and grandparents pull out cash to help;
  • The banks ask for a personal guarantee from the established ones to assist in acquiring the loan.

If you are lending money to a couple, remember there is only one of those who is a member of the family. This means that, one of them may at some point, be no longer a member of the family.

Leverage has a case on our desk at the moment where the grandparents loaned a large sum of money to their grandson and his wife to purchase a property. There was a loan agreement drafted between friends and not in case of a dispute. No repayments were made under the loan, and no one had any evidence of whether money had ever changed hands in repayment of this loan. Now, they have separated.

If you are going to lend money to family members, please ensure the following is undertaken:

  1. There is a loan agreement in place which expires upon a separation;
  2. There is a power to become a first or second mortgagee over the property to protect your interest;
  3. There is a right in the contract, allowing you to take possession and sell the property in the case of a separation;
  4. A caveat should be lodged on title, so your interest is not affected;
  5. A record of every payment is kept by way of a ledger; and
  6. Dial someone else in, a family member or friend, to oversee the management of repayments.

In this case, one of the parties acquired Alzheimer’s. Just remember we all age, and sometimes these memories lapse. Having another person to assist you to oversee the loan is absolutely vital.

It’s okay to help out the kids, but make certain you’re protected when the kids no longer care about each other.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email