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Law Assessment Answer
TASK:
Question 1
The country is facing a crisis. The values of properties in most urban areas, and at least in all capital cities except Hobart have fallen 20% in one weekend. Auction clearance rates are at their lowest ever on record. The falling value of properties has triggered many mortgage defaults on account of the loan to value ratio clauses that are now common in loan
contracts. It is feared that the rate of defaults, and the consequent number of homes for sale, will lead the value of residential properties to fall by 60% be the end of the month.
Commentators suggest that this will be catastrophic for the economy. The NSW state government, concerned about its falling revenue from stamp duties (on which it depends) convenes an emergency session of the state parliament to debate, and eventually pass the Housing Crisis Reaction Act 2019. This Act provides at relevant passages:
Also concerned about the national housing price fall, but not concerned with stamp duty revenue is the Commonwealth government. The Commonwealth Parliament convenes to hear debate on the Australian Housing Bill, designed to take certain steps in aid and answer to the upcoming housing market crash. The bill is debated and eventually passed into law
as the Australian Housing Act 2019.
Tristan has just entered into a contract for the sale of a home from a corporate developer in Auburn, New South Wales. Tristan is concerned that others who have entered into similar transactions in the same development in which he has purchased have been hit with stays under the Housing Crisis Reaction Act 2019. Other purchasers in the development have also received notices under the Commonwealth Australian Housing Act 2019: section 5.
Advise Tristans solicitor, by whom you are instructed:
(a) on whether the state legislation is valid and operative?
(b) on whether the Commonwealth legislation is valid and operative?
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