The pitfalls of lending money to a friend or relative

Lending money to a friend or relative can be a risky proposition, and there are several potential pitfalls to consider before making such a loan. Some of the common pitfalls include:

1. Strained Relationships: If the borrower is unable to repay the loan, it can cause tension and strain in the relationship with the lender.
2. No Repayment: There is always the risk that the borrower will not repay the loan, leaving the lender without the funds they lent.
3. Lack of Documentation: Failure to document the loan with a formal agreement can lead to misunderstandings or disputes about the terms of the loan.
4. Legal Action: In the event of non-payment or breach of loan terms, legal action may be required to recover the funds. This can be costly, time-consuming, and may damage the relationship further.

If a friend or relative refuses to repay a loan, or if they encounter financial difficulties that make it difficult to repay the loan, the lender may have legal recourse available to them in South Australia. These may include:

• Negotiation: In many cases, it may be possible to negotiate a repayment plan or a settlement that is agreeable to both parties. This can help to avoid the matter ending up in Court and can preserve the relationship.
• Legal Action: If negotiation is unsuccessful, the lender may be able to pursue legal action to recover the funds. This may involve filing a claim in the Magistrates Court (debts of less than $100,000) or the District Court (debts greater than $100,000).
• Security: If the loan is secured by collateral, such as property or a vehicle, the lender may be able to take possession of the collateral in the event of default.
• Guarantor: If a third party has guaranteed the loan, the lender may be able to pursue legal action against the guarantor to recover the funds.

It is important to note that legal action can be expensive and time-consuming, with no certainty of a favourable outcome. A lawyer experienced in debt recovery matters can assess your options and determine the best course of action.

If you decide to enter into such an arrangement, it is also prudent to have a written loan agreement in place that sets out the loan terms, including a repayment schedule, the interest rate, and any security or guarantees. A lawyer can also draft this agreement.

For further information about dealing with civil disputes please follow the link HERE

*This information is current at the time of publication. For accurate legal advice, please contact Scammell & Co on 08 8440 270.

Generic legal documents are readily available online. So why engage the services of a lawyer?

Over the past few years there has been a boom in the online legal document business. You can now download a wide variety of legal documents off the internet including a will, a contract or lease - even a divorce form, for a fraction of the cost of engaging a lawyer to draft one.

At first glance these online documents seem to offer convenience and value for money, but it is a case of buyer beware! Downloading and using generic legal documents or forms gives the false impression that the document will be fit for purpose. However, their use could end up costing you more in the long run, be ineffective in accomplishing your aims, and be unenforceable in the event you end up in court over a dispute.

For example, generic online legal documents can be out of date or flawed, and the companies which sell them make no warranty that their products and services will be fit for purpose. Misguided or incorrect assumptions can be made by the purchaser as to the use of certain phrasing, or the necessity of certain clauses or policies in such documents, which can put them, their assets or their business interests at unnecessary risk or cause reputational damage. There is also a tendency when using off-the-shelf documents to simply adjust the circumstances to fit the document, however, legal issues are rarely straight-forward. Engaging the services of a lawyer provides clients with peace-of-mind knowing their unique circumstances have been considered, and the legal documents have been customized to meet their specific needs.

Many websites also offer access to a virtual lawyer however, this adds to the cost and can be problematic in that you may not be getting the best or most appropriate legal help. For example, the lawyer is not one of your choosing, they may not possess a suitable level of expertise in law relevant to your matter, nor be familiar with the laws of your jurisdiction.

Scammell & Co have experienced lawyers who can answer your questions, provide you with tailored advice and services on all aspects of contracts, leases, and other documents to ensure they meet your specific needs, mitigate risks and protect your assets.

For further information on how we can assist you with your contracts, leases and agreements click HERE

*This information is current at the time of publication. For accurate legal advice, please contact Scammell & Co on 08 8440 270.

Your options if you find yourself in a strata title development dispute

It is estimated that one in five Australians live in strata title properties.

Collectively, these properties comprise a strata scheme which refers to land and buildings divided into two or more units, apartments, or townhouses. Owners have title to a ‘lot’ (or a ‘unit’ as it is referred to in South Australia), with shared access to, and responsibility for, any common property.

Each development forms a strata corporation when a strata plan is lodged with the Land Titles Office. This entity operates in accordance with both the Strata Titles Act 1988 (SA) and the Community Titles Act 1996 (SA) (the Act), as well as the scheme’s by-laws (rules). It also acts on the will of the owners as articulated through voting at general meetings or, for day-to-day matters, through an elected executive committee.

The responsibilities of the strata corporation include:

Given the growth and popularity of strata schemes in Australia, and the differing interests of owner occupiers, investors, and tenants, conflicts are increasingly common. The type of disputes that arise between neighbours, or between an owner or tenant and the strata corporation include:

There are several ways of dealing with disputes in strata schemes.

In the first instance, the strata secretary or manager will attempt to address the problem. If it is claimed that a unit owner or tenant is in breach of the strata corporation’s articles, the corporation may request that the person either do what is required under the articles, or stop doing what is not allowed under the articles. If the person continues to breach the articles, mediation may be sought, or a penalty may be imposed by the corporation if there is provision for this in the articles, and/or the matter may be taken to court.

The Magistrates Court (for minor civil action), or the District Court (for more complex matters), will deal with disputes where:

The court may reach the following binding decisions:

Failure to comply with an order is an offence carrying a maximum penalty of $2,000.

Anyone considering legal action should be aware of potential limitations periods and is advised to seek independent, professional advice from a Scammell & Co lawyer as early as possible.

*This information is current at the time of publication. For accurate legal advice, please contact Scammell & Co on 08 8440 270.

Giving evidence in a court of law is a serious undertaking. Here are the key considerations.

If you have received a summons or subpoena to appear as a witness in a criminal or civil trial, then you are required to attend court. If you do not attend court at the listed date and time and without a reasonable excuse, then you may be charged with contempt of court or a warrant may be issued for your arrest. As the schedule for trials will often change, you should contact the party that has called you as a witness prior to the listed date and time, to confirm your attendance.

As a witness, it is likely that you have previously provided a written statement to the party that has called you as a witness in the case. Prior to giving your evidence in court, read over your written statement and refresh your memory in respect of the event that you will be questioned about. For example, when it occurred (the date and time), what you saw or heard and who was present. If any part of your statement is incorrect, then you should inform the prosecution or defence right away.

When you arrive on the day, you will need to wait outside of the courtroom until the court is ready to hear your evidence. As you cannot wait inside of the courtroom, you may bring a book, magazine or mobile phone to occupy yourself while you wait. If the court cannot hear your evidence on that day, then you may be required to return to court on another day.

When it is your turn to give evidence, you will swear an oath or make an affirmation to tell the truth.  First, you will be asked questions by the party that has called you. This is called examination in chief. Then, you may be asked questions by the other party in the case. This is called cross examination. You may then be re-questioned by the party that has called you before being released as a witness.

After your evidence is given, you can leave the court or remain in the public gallery of the courtroom to observe the remainder of the evidence being given.

You must tell the truth when giving evidence. So listen carefully to the questions, ask that the question be repeated if you did not hear it, do not feel pressured to answer quickly and do not guess the answer if you do not know. It will also assist the court if you answer the questions in a clear and loud voice.

A person who knowingly makes a false statement under oath or affirmation may be charged with an offence carrying a maximum penalty of 7 years imprisonment.

For information about Scammell & Co.'s Civil Litigation services and the dispute resolution process click here

*This information is current at the time of publication. For accurate legal advice, please contact Scammell & Co on 08 8440 270.