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Bendigo lawyer Sarah Gee from Curium Legal said it’s been a busy start to the year with some clear trends emerging in the legal landscape.
Sarah says there is an increasing trend of inter-family loans, highlighting how families are assisting each other in navigating the housing market and managing rising living costs.
"We are doing tons of inter-family loans at the moment. And what that means is we might have parents coming to us and wanting to help their kids to get into the housing market or help them out because they're struggling a little bit with their mortgage with the rising cost of living," says Sarah.
"But also there's a lot of people investing in businesses at the moment. They might be loaning money into businesses or taking on ownership of a business.
"We sit with people and talk about what happens if the lender or the borrower was to pass away? What happens if they separate from their spouse?
"We look at their estate planning; if they're lending to one child, are they balancing that out by lending to other children or balancing that out via their will?
"We run through lots of uncomfortable questions and come up with a document at the end of it that reflects that loan."
Businesses are still recovering from the effects of the pandemic with many owners burnt out. This is resulting in a record number of businesses changing hands.
"We're not just talking about sales either. There's a large component that is sales from an owner to a complete third party, but also things like senior employees taking on part ownership and starting to share that burden."
With increasing costs and pressures on budgets, Sarah says businesses are focusing on profit centres and streamlining operations to ensure survival.
"The economy has tightened and businesses who might have been carrying some extra staff or nice to have staff or underperforming staff, they just can't afford to do that anymore. So things like increases in wages, increasing costs of supplies, increasing costs of services, they're hurting budgets. We're finding a lot of businesses are really stripping back and focusing on those profit centres just to make sure they get through."
There is a rise in insolvencies across various sectors, prompting Sarah to advise businesses on tightening payment terms and monitoring credit accounts to mitigate risks associated with customer arrears.
"I see in the news every day - construction companies are failing, hospitality and retail aren't doing so well, but they're actually up even in professional services and areas that you wouldn't even think about. It's hurting everybody.
"What I'm recommending to people at the moment is check your payment terms with your customers. You might need to tighten them up a little bit. Check your credit accounts. How far are you willing to let people go into areas with you? Because it may not be your customers that have a corporate failure, so like an administration, but it could be one of their customers that puts them under pressure so then they can't pay you.
"Just being a little bit more careful about how far you're willing to let things go."
Sarah notes that there have been 12 sets of changes to the Fair Work Act between December 2023 and August 2024, indicating the rapid pace of regulatory updates.
"I was talking to a HR professional a week ago and she was saying that [Fair Work Act] hadn't changed at all for her entire career, and that it's changed 12 times in less than a year.
"We're seeing changes to what is an employee versus a contractor, what do you have to do around casual employees, paying super to contractors, sexual harassment training, because of course we've got a proactive duty to eliminate sexual harassment in workplaces now. Also flexible work because we've got new rules around that. And the right to disconnect coming as well.
"We are working with so many businesses just trying to figure out what this means for their workplace and then planning around that."
Sarah emphasises the importance of proactive legal and HR consultations to adapt to these changes.
If you can see any of these on the horizon for your business and it's feeling a bit too much, get in touch with Curium Legal.
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Photography by Gingerhouse Photography