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WMM Law News

Issue 35,  July 2021

A change is as good as a holiday... introducing WMM Law

We are excited to announce that we have changed our trading name to WMM Law, with effect from 12 July 2021.        

Our commitment to our clients, and to providing high quality service, remains our highest priority.  We have taken every step to ensure that this rebranding will not affect our clients.

Our phone number and address have not changed, but our website and email addresses have: 
and we have set up automatic-redirections from our previous website and emails to ensure you can still contact us.    

Please do not hesitate to contact us if you have any questions.          

Living forever online… Who manages your digital life after your death?

Before COVID-19, we were arguably on the brink of a ‘Fourth Industrial Revolution’, with the line between our physical and digital lives becoming increasingly blurred.   Whilst many industries were already operating at least partially online, it is now clear that no industry will be spared from undergoing a drastic technological change.   Even those previously opposed were forced to communicate, transact, learn and operate online.   The result of this is that almost everyone now has a digital life, a digital footprint and a digital estate.

What is a “Digital Estate”?   Your “digital estate” is an umbrella term for your digital devices (computers, phones and other devices), digital accounts (such as email, social media and online banking) and digital assets (electronic ‘items’ including photos and documents, but also extending to cryptocurrencies and other assets that only exist in electronic form).

Why is it so important?   Even though a digital estate is predominantly made up of electronic and intangible records, they are now the digital gateway to people’s entire lives, estates, and legacy.   Just a decade ago, the idea that your estate planning should – or even could – make provision for your digital estate would have seemed absurd.   But now, these considerations are a part of everyday estate planning (and estate administration).  

Although the importance, and value, of their digital estate will differ from person to person, including it in your estate planning should not be overlooked.   Leaving aside (for now) the potential financial value of some digital assets, there are many reasons to include the ongoing management of your digital accounts in your estate planning.   In addition to the sentimental or emotional value of the digital assets stored in your digital accounts, and the security and financial threats of identity theft, it may be important to you to be able to dictate what is to become of your online life after your death – to decide whether or not you want to be memorialised and ‘live’ online forever.

Are you talking about specific estate planning for my social media accounts?   Yes.

Doesn’t my Will/ Enduring Power of Attorney cover this?   In short, no.   Standard or general powers provided to your Executors or Attorneys are often insufficient to allow access to your digital accounts.

Although there has been much international discussion on this topic, there is no formal international legislation, policy, judicial recognition or even common practice as a guide for dealing with digital estates in estate planning or estate administration.   For digital accounts, this means that most – if not all – are separately regulated by their own “terms of service agreements”.   Although they all differ, a common thread is prohibiting one person from accessing another person’s account.

Both terms of service agreements, and privacy laws, can hinder or prohibit access to another person’s digital estate, even if the person has died or has lost capacity.  This means that your Executors or Attorneys may have difficulty gaining lawful access to your digital estate, unless adequate estate planning is undertaken.

How difficult?   If you throw a stone far enough on the internet, you will probably hit a shocking story about the consequences of a grieving family member being denied access to their loved one’s digital accounts.

Here are some examples:
  • the picture of a 20-year-old holding a gun to his mouth, prior to him taking his own life, remained his Facebook profile picture for days after his death, despite the efforts of his mother to remove it, because she was not authorised to access his account;
     
  • a ‘Facebook live’ video of a man attempting to take his own life (his gun misfired) was streaming for all to see.   Despite it being reported, Facebook responded that “the video did not violate its community guidelines”.   Whilst the Facebook live continued to stream, the man fired the gun again and died.   The video continued to circulate the internet (including being uploaded to Tik Tok) for months afterwards;
     
  • abusive and taunting messages were posted to a 15-year-old’s Facebook in the hours after she took her own life, and her parents were unable to access her account to delete them;
     
  • a mother was required to apply to the Mato Grosso do Sul State Courts in Brazil to have her daughter’s Facebook profile removed, because she was unable to obtain access to remove it herself;
     
  • Facebook refused a request by parents to access their son’s Facebook account in an effort to find clues about the suspicious circumstances surrounding his death;
  • a mother sought access to her daughter’s Facebook account in an effort to prove that she was murdered and did not take her own life (and after Facebook denied her access, a court refused to grant an order forcing Facebook to give her access);
     
  • the family of a doctor had to seek a court order to have Apple Inc. provide access to the deceased’s phone and iCloud account, in the hope of finding clues about the suspicious circumstances surrounding her death; and
     
  • Apple refused to give a 72-year-old widow her deceased husband’s Apple ID password, resulting in her not being able to access or update apps on her personal iPad (something her more capable husband had always attended to for her).
There are also two recent reported cases – both outside the USA – where families have obtained court orders requiring Facebook to give them access to their deceased loved one’s Facebook account.   In both instances, Facebook has refused to provide that access on the basis that it, as an entity based in the USA, does not recognise the jurisdiction or authority of foreign courts.

What do I do?   The web may be worldwide, but there is no internationally accepted policy dealing with third party access to your digital accounts.   Unless or until there is, our view is that nothing short of express and detailed powers in your Will (and Enduring Power of Attorney) is sufficient to ensure your loved ones can safely access your digital accounts, and carry out your wishes.

If you have expectations about the management of your digital estate after your death or incapacity, the first and most important step is to prepare a Will (and Enduring Power of Attorney) with comprehensive digital estate powers and instructions.

Other practical tips:   In addition to ensuring that your legal documents are up to date and comprehensive, consider putting the following strategies in place:
  • preparing a digital estate inventory or log to assist your Executors and Attorneys…  and make sure they know where they can find it.   As this inventory will contain passwords (or at least information on how to access them), then regardless of whether it is maintained by you as a physical list, an electronic list, an encrypted electronic list, or in some other form, it should be afforded the same security-related care and treatment as any other sensitive information.   These details should not be included in your Will or Enduring Power of Attorney, because those documents can be publicly accessible in some circumstances;
  • writing a separate note or memorandum about your wishes for your digital estate.    Do you want your digital devices cleared of content?   Which parts of your digital estate do you want preserved?   Do you want your online accounts memorialised, where possible, or simply closed?   Is there any confidential information (employment files, for example) that must be deleted?   This helps your Executor or Attorney know what is important to you;
     
  • reviewing your login and password details (and if applicable, your password manager details) regularly;
     
  • adjusting the privacy settings on your social media accounts;
     
  • nominating a “legacy contact”, “inactive account manager”, or similar (where permitted) to access your digital accounts after your death; and
     
  • regularly downloading/saving/backing up your digital files to save them to your digital devices or even (gasp!) printing a hard copy.
How Can We Help?   WMM Law has specialist skills and experience in Estate Planning, including planning specifically for digital estates.   Our lawyers can assist you to put in place a comprehensive digital estate plan to give effect to your specific wishes about your digital legacy.

Please contact Kimberley MartinCasey Goodman or Ashleigh Furminger if you, or your client, need expert advice and guidance about preparing a comprehensive estate plan that documents and details wishes about the administration of an estate, including preparing strategies for both meeting estate liabilities and preserving non-cash estate assets.

Alternatively, if you need specialised assistance in administering and managing an estate with digital components, please contact Kate MossRobert MeredithEve Hickey or Megan Bird.

 
Landlord and tenant negotiations… in battles between David and Goliath,
it helps if David has a good lawyer
At WMM Law, we frequently provide advice to “Davids” (tenants), in negotiating and preparing commercial lease agreements with their “Goliaths” (landlords).   David almost always starts at a disadvantage, given their relative market strength, and size, to the towering Goliath.

There are, however, strategies that David can adopt to ensure that their weaker negotiating position is not leveraged to further disadvantage.   In our view, no premises are so perfect that the lease terms are non-negotiable.

Tempting though it may be to accept Goliath’s word as gospel, it is fundamentally important, given the unequal bargaining positions, for David to obtain strong and independent legal advice.   Although some tenants’ instinct is to accept an adverse lease on the basis that the unfavourable terms are part of the cost of leasing the premises, they should be properly advised about the potential consequences before doing so.

David tends to be interested in understanding the “standard” provisions in a lease: the length of time and the costs that they will be liable for, but it is important for David to also understand other clauses within lease agreements, that they may want to negotiate.   These terms are not carved in stone, and can often be negotiated based on David’s needs.

We recommend that all Davids arm themselves with the following “smooth rocks” – an insight into a (non-exhaustive) list of clauses to look for in a commercial lease that can cause a plethora of issues if not properly negotiated for their circumstances.

Retail lease or standard commercial lease?   In an increasingly digital landscape, it is becoming more common for Goliath to purchase a standard precedent lease document online, for a small fee, instead of engaging a lawyer to prepare a lease to suit their specific premises.   These documents are automatically generated, usually without taking into account the exact circumstances of the parties.

The most common error we have encountered in online precedent leases – and there are many – is the classification of the type of lease.

There are two types of commercial leases – retail leases and non-retail leases.   Retail leases cover premises that are deemed under Tasmanian legislation to be “retail premises”, and it is critical that proper legal advice is obtained to determine which classification of the lease is required.

There are additional protections available to tenants under a retail lease, meaning that there are additional obligations that a landlord must comply with.   If a landlord incorrectly categorises their premises, the effect and the validity of the lease will be uncertain.

David must always undertake their own due diligence to ensure that the classification of the lease is correct.

“Term”:   Commercial leases are commonly set at between 3-5 years for an initial period (“term”), with one or two ‘options’ to extend the lease for further terms of the same length.   Tenants undertaking significant investment into the premises (including fit outs and signage), and those whose businesses are heavily reliant upon regular customers, may wish to negotiate a longer term.   Conversely, new and unestablished businesses may wish to negotiate a shorter initial term (to test the financial viability of their business) with longer option terms, to provide them with greater flexibility.

The rent:   As to rent (which may expressly include or exclude GST), David should always undertake their own market research, and seek accounting advice, about the financial projections of the business, and its ability to meet all operating expenses, including rent.   Rent must be fair and reasonable, and can be negotiated.   If the rent is higher than David can likely pay, and if Goliath does not budge, there could be serious financial consequences for both parties if the lease is signed.   In ascertaining the ability to meet rental expenses, David should be aware that most commercial leases include provision for rent to be increased annually, either at CPI or, more commonly, by a fixed percentage (usually between 2-4%).   Certain common forms of rental increase clauses are prohibited in a retail lease, meaning that it is important for David to have proper advice about the classification of the lease, especially if Goliath downloaded the lease agreement from the internet…

Outgoings:   David needs to be fully aware of the additional expenses they will be liable for under the lease, and should request indicative figures from Goliath.  It is normal for a tenant to be liable for rates, land tax, water and sewerage and electricity in addition to the rent.   A tenant should also be wary of ambiguous and broadly defined additional expenses like, for example, “operating expenses”, “shopping centre contributions”, “building contributions”, or “services fees”.   The lease should clearly articulate exactly what expenses the tenant will be liable for.

Legal costs:   Leases will often declare that David will be liable for some of Goliath’s legal costs, most commonly for future legal costs (where the lease is amended or assigned during its term).   However, some leases require David to pay some or all of Goliath’s legal costs in negotiating and entering into the initial lease before it is signed which, in our view, is an unreasonable imposition on a tenant, particularly if costs are not limited to “reasonable costs” only.

“Handshake” agreements:   It is very common for some of the initial verbal agreements (“handshake” agreements) between David and Goliath to be excluded from the written lease.   If the written lease has a “complete agreement” clause (which states that prior verbal agreements not contained in the lease itself are unenforceable), those handshake agreements have no effect.   David must ensure that they keep a record of those agreements, and seeks advice about whether they have been committed to the written lease.

Permitted use:   Most leases will define David’s “permitted use” of the premises.   If the definition is inadequate or incomplete (or wrong) in relation to the intended business, David will be in breach of the lease – and potentially liable for damages – for operating their business as planned.

Fit outs and advertising:   Where David intends to fit out and advertise the premises (for example by affixing eternal signage), it is important to make sure Goliath agrees to the exact designs in writing, and ideally includes broad terms in the lease itself.   If not, Goliath may have discretion to refuse David’s requests during the term of the lease.

“Absolute and unfettered” discretions:   Although the premises are owned by Goliath, and they are generally permitted to make certain “absolute and unfettered” decisions about the leasing arrangements, this does not mean that David should not carefully review these discretions to ensure that they are not “unreasonably” absolute and unfettered.   Both parties can be adequately protected by ensuring the landlord can only exercise their discretions within reason.

Landlord’s equipment, fixtures and fittings (“plant and equipment”):   Where David is also leasing Goliath’s plant and equipment, the lease will likely detail David’s responsibility to maintain it throughout the lease, and return it in good working order at the end of the lease.   Because of this, David should ensure it is all in good working order at the commencement of the lease, to avoid having to meet the cost of replacing (and continuing to lease!) an item that malfunctions soon after entry into the lease.

Prescribed “health and safety features”:   Most commercial premises must, by law, maintain certain health and safety features, and maintain a statement of compliance issued by a building surveyor.   Leases generally place the obligation on the tenant to maintain the health and safety features, however it is in David’s best interests that the lease requires Goliath to first ensure that the building itself is compliant before the lease begins.

“Essential” terms and breaches:   A lease will usually set out a number of terms that the parties agree are “essential”, and if David breaches any of them, Goliath can automatically terminate the lease.   Although some of these – like non-payment of rent – are understandable, the ‘fine print’ about how Goliath can exercise their termination rights needs to be carefully considered.   For example, if Goliath is not required to provide notice of non-payment of rent, the lease could be terminated simply because an automatic deposit system malfunctions.

Structural repairs:   David should carefully review the lease to ensure that there are no obligations which would result in them having to undertake significant structural repairs to the premises itself – this responsibility should be with Goliath.

Damage and destruction:   What terms does the lease contain about damage or destruction to the premises, outside the tenant’s control?   Is David allowed an appropriate rent reduction?   Can David terminate the lease?   Under what circumstances?

Release and Indemnity clauses:   Leases commonly include clauses in which the tenant agrees that the landlord is not liable for any damage caused by the tenant or the tenant’s actions (either to the premises, to the landlord, or to a third party in connection with the premises).   Whilst this is generally appropriate, David should be wary of overly broad clauses, which might allow Goliath to avoid liability or damage which David did not cause or contribute to.

How Can We Help?   WMM Law has specialist skills and experience to assist both Davids and Goliaths to negotiate a commercial lease on appropriate and reasonable terms, whilst advancing their specific interests and needs.   Our commercial and property lawyers David Bailey and Tiahna Tomac can provide you with comprehensive advice and assistance with your commercial leasing requirements.
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This newsletter contains material for general educational purposes and is not designed to be advice to any particular person about their own affairs as it does not take into account the circumstances of the reader as an individual.  It is recommended that appropriate professional advice be obtained by each reader so that reliance can be taken upon that advice.

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