Loose Fill Asbestos are you meeting your Obligations?

In the Loose-fill asbestos insulation guide published by NSW Fair Trading a number of obligations are imposed on the industry in relation to the potential existence of asbestos in the properties that you are engaged to sell or manage.

These obligations include:

  • a duty of care to the client and workers engaged to carry out work on the property;
  • a commitment to act honestly, fairly and professionally;
  • a responsibility to disclose certain matters to prospective buyers and tenants.

You have an obligation under the Work Health and Safety Act 2011 to,” so far as is reasonably practicable, identify and manage the risks from loose-fill asbestos” from both a sale and property management perspective.

Don’t you just love that phrase ‘reasonably practicable’? Every time NSW Fair Trading uses it we ask for an example, they are not always forthcoming. EAC has put forward to NSW Fair Trading on many occasions that as agents we are not building inspectors and we believe that in some cases too much onus is being put on agents. Putting that aside, to assist you in meeting your obligations in regards to Loose Fill Asbestos we have created a Loose Fill Asbestos Questionnaire.

Firstly, you should be advising your principals that properties built before 1980 may contain loose-fill asbestos insulation. Secondly, you should have them complete the questionnaire at the time of your initial inspection. If you have not done this then we suggest that you send out the form to all your clients and have them complete it so you have it on file, and especially if the property was built before 1980.

If as a result of the completion of the questionnaire you become aware of the presence of loose-fill asbestos or suspect that loose-fill asbestos may be present then we suggest you follow the steps outlined on the Loose-fill asbestos insulation guide.

Our forms solutions provide you with the flexibility to work the way you prefer and we have made the questionnaire available both as online and printable form. The online version is now available in our Online forms solution and print version can be downloaded from our Supplementary Forms and Resources page on eac.com.au.

As a reminder for Members, as part of your membership you are able to obtain free legal advice from Jemmeson & Fisher Solicitors on our agency agreements and other practice related issues. When the need arises just give us a call on 1300 137 161 and we will put you through.

Welcome to your modern real estate co-operative

If you visit the EAC website, or come to an Insight event in the coming weeks, you’ll see that a lot has been happening at the Estate Agents Co-operative and we are excited to finally share with you what we have been working on in the last few months.

As many of you know, we are Australia’s most established community of real estate agents, and we have been serving this dynamic industry for over 50 years. In this time a lot has changed. With shifting markets and new technologies, the landscape is unrecognizable from when we first set out to bring like-minded agents together, in 1960.

This mission still sits at the very heart of what we do, but, in speaking to our members, we realized that it was time to re-invigorate our offer, and our brand, to become a truly modern co-operative.

So what does this mean for you?

The EAC that now stands in front of you has a refreshed brand, one that more accurately reflects the passion, warmth and energy of our team.

We also have an updated, easy to navigate website that includes information about our services, our team and our upcoming events.

But this refresh is about more than appearance. As part of the new EAC we are pleased to introduce a suite of innovative products to support you in future-proofing your business.

These products include powerful video marketing tools, fully responsive and customisable web packages and advanced data services and dashboards that enable you to be the expert in your market.

We are proud to offer you advanced technology that supports you in growing your business, whilst maintaining a focus on our community on the ground, through the strong relationships we have with our partners and our members.

As part of this community focus, we’ll be keeping you abreast of the latest changes in the industry and we’ll be helping you grow your professional network through events in your area. And if there’s ever anything you need, we’ll still be on the other end of the phone, to offer advice and guidance.

We, as an industry, have a bright future ahead of us and, with our re-energised outlook, we are excited to be a part of it.

NSW Fair Trading, what are they focusing on at the moment?

NSW Fair Trading are out in the field conducting inspections of real estate agents and local businesses. In EAC’s meetings with the government body, as part of the Real Estate Reference group, they share with us what they are finding ‘out there’ and what they’re focusing on.

In a recent visit to Parkes and Forbes in March 2017, all ten real estate offices inspected were found to be in breach of legislation.

During their inspections, NSW Fair Trading are looking at a multitude of things relating to compliance, and it surprises us to hear of the types of breaches as well as the amount of penalty infringement notices and fines being given to agents.

Here are some things that you may want to check in your office.

Real Estate Licences and Certificates of Registration

Let’s start with the basics, with an inspection of licences or certificate of registration for your team. Do you have them all readily available and are they current? For the renewal of a licence or certificate you have to do CPD; have you done the necessary CPD and have the necessary proof? Fair Trading have caught out a number of people who have stated they have done the necessary CPD at the time of renewal, but have not.

Agency Agreements

Are all your agreements in order, are they signed by the correct person, do they have the correct licence numbers on them, are they in the necessary files?

Underquoting

Despite the amount of information that EAC and others have put out about the legislation changes, agents are still being found to be underquoting.

In summary, you cannot state or publish a price for a property that is less than your reasonable estimate of the property’s likely selling price contained in the agency agreement with the seller. The estimated selling price can be a single figure or a price range. If a price range is used, the highest price must not be more than 10 per cent higher than the lowest price. Advertisements and representations that say “offers over” or “offers above” or any similar statement are not allowed.

What you state in your agency agreement, as to the estimated selling price, may be checked against your market appraisal, your advertising and your communications with consumers including your emails. If your estimated selling price changes, you must amend your agreement with the vendor and EAC Forms. Customers can do so with our Notice To Vendor Of Revised Estimated Selling Price. You should also provide any supporting evidence or an updated market appraisal, while also updating your marketing materials.

In some of the cases that we are aware of, there was blatant underquoting and in others it was just a case of poor paperwork. In simple terms, get your agency agreement right, don’t market the property or provide consumers with prices under the estimated selling price you have in the agency agreement; and if the property sells over this price, even significantly, and there is a complaint made you will not have a problem.

Verifying the Identification of your Vendors

We believe most of the agents that we referred to in Parkes and Forbes received an infringement notice and fine for not doing this. We believe the infringement notice was for a breach of the rules of conduct, and relate to the Real Estate Fraud Prevention Guidelines.

Section 37 of the Property, Stock and Business Agents Act 2002 provides that the regulations may prescribe rules of conduct to be observed in the course of the carrying on of business, or the exercise of functions under a licence or certificate of registration.

If you are not obtaining the necessary proof of identity for your vendors, you must; and if you are not we suggest you start doing so. For more information see the Real Estate Fraud Prevention Guidelines. An Identity Checklist for Vendors form is available to EAC Forms customers, and can be downloaded from our Supplementary Forms page or within eForms.

So what are Fair Trading focusing on over the next few months?

In addition to the above we can advise that NSW Fair Trading will be focusing on the area of Property Management in May and Trust Accounts in June, checking if a Unique Identifying Number has been obtained and attached to the accounts.

NSW Fair Trading can turn up at your office at any time, but are more likely to do so as part of their My Place Program. The My Place Program will be taking place in the following areas during the rest of 2017.

Hornsby 15 – 19 May
Tamworth 5 – 9 June
Belmont/Swansea 13 – 16 June
Cootamundra/Young 26 – 30 June
Camden 17 – 21 July
Coffs Harbour 24 – 28 July
Orange 14 – 18 August
Lismore 21 – 25 August
Deniliquin 4 – 8 September
Port Stephens 23 – 27 October
Bowral 30 October – 3 November
Liverpool 6 – 10 November

If you are subject to an inspection and have any questions or are not sure of your position, EAC Members are able to obtain free legal advice from Jemmeson Fisher as part of your membership.

Requirement for Pool Owners to obtain a Compliance Certificate extended until 29th April 2016.

In NSW, the owners of properties with a swimming pool and/or a spa pool are required to register their pools and spas on the NSW Swimming Pool Register. The Provisions of the Swimming Pools Act 1992 requiring pool owners to obtain a Certificate of Compliance before selling or leasing their property will now commence on 29 April 2016.

In a media release sent out by Paul Toole, Minister for Local Government last Thursday 26 February 2015 it was advised that “pool owners will be granted a 12-month extension to make sure they have a valid compliance certificate before the property can be sold or leased.” This means that if you are selling or leasing your property you do not need to attach a Swimming Pool Compliance Certificate to the Contract for Sale of Land until 29 April 2016.

Minister for Local Government Paul Toole stated that “The evidence showed there was a high failure rate for initial inspections and a heavy demand to make pools compliant”

We have received several calls from Members in regards to the change and it is interesting to note that despite the announcement the NSW Government Swimming Pool Register website still states the 29th April 2015 as can be seen below.

NSW Government Swimming Pool Register

Further to this when you go into the Register your pool section on the NSW Office of Local Government it mentions nothing of the change nor does the downloadable Swimming Pool Register – FAQ document which still references 29 April 2015. It is not until you navigate to the section on Selling or leasing a property with a pool or spa that you will find the change.

There was no communication of this change to EAC despite being involved in discussions in the past. I would have thought that the supporting websites and documentation would have been updated at the same time as the announcement had been made but obviously this has not been the case and I have expressed this view and requested that the sites be updated in calls to the Office of Local Government and the contact for Minister Toole.

The Media release can be viewed here.

Change to NSW Sales Agency Agreements from 1 March 2015

In late 2014 the Property, Stock and Business Agents Regulation 2014 came into effect. There were several changes introduced as part of the update to the regulations and one of the changes introduced was in regards to agency agreements.

Under clause 8, section 3 of the regulations it is stated that on and from 1 March 2015, if the agency agreement includes a term that a commission is payable even if the sale of the property is not completed, the agency agreement must include a warning notice.

The notice must be in the form of:

“WARNING: The term immediately above provides that a commission is payable under this agreement even if the sale of the property is not completed.”

This notice must be included in the agency agreement immediately following the commission term and must be no less prominent than the commission term.

EAC Agency Agreements Warning Clause.Sample clause from the updated EAC Sales Inspection and Exclusive Selling Agency Agreement.

The change applies to agency agreements for the sale of residential (including land) and rural property and Businesses. We have updated our printed and electronic forms to include this change and they are now available for purchase and use on-line.

To ensure compliance I recommend that you check if the agency agreements being used for the sale of the property types outlined above include a term that a commission is payable even if the sale of the property is not completed and if so that the warning notice is also included.

First Home Buyer Figures Understated

The Australia Bureau of Statistics (ABS) have released revised First Home Buyer (FHB) figures after an investigation into the accuracy of estimates of loans to first home buyers.

The figures released in November 2014 had put the number of FHB loan commitments at 6,061 but the revised figures now put the number of commitments at 7,627, an increase of 25.8%

“Initially we thought the fall-off in first home buyer loans over the last two years was due to reduced affordability arising from changes in grants, rising house prices, increased investment housing loan activity and general economic conditions,” Ms Hodges said in a statement.

“However, subsequent analysis and follow-up with lenders has confirmed that the drop was partly due to under-reporting by some lenders.” said Ms Hodges.

The ABS is now working with the Australian Prudential Regulation Authority which collects the first home buyer loan data for the ABS to ensure all loans to first home buyers are recorded in the future, regardless of whether they receive a first home owner grant or not. In the meantime, the ABS will adjust first home buyer data for this under-reporting using estimates based on data provided by lenders that reported correctly.

Although the ABS has released revised figures for November 2014 it could well be that the figures released for FHB’s over the past two years has been significantly understated.

The First Home Owner Grant scheme in New South Wales provides a grant of $15,000 and only applies to eligible first home owners who purchase a new home or build their home. This grant will reduce to $10,000 on 1 January 2016.

EAC meets with NSW Fair Trading and Work Cover about Asbestos

The real estate industry is becoming increasingly aware of the potentially far reaching effects of the “Mr Fluffy” loose fill asbestos issue, with Work Cover identifying 26 NSW Local Government areas currently at risk.

The problem confronting all agents and property managers is that the presence of loose fill insulation containing asbestos is a “Material Fact.”  Currently, affected properties must not be offered for sale or lease and agents have a clear responsibility to enquire from their client whether the property is insulated and if so what type.  . If the answer is “yes” or “not sure” to the presence of loose fill type then the client should obtain an inspection and report from a qualified asbestos assessor.

However, the “Mr Fluffy” issue has become a catalyst for the industry to discuss Asbestos and how agents and property managers are to deal with properties affected by it and what are the correct steps for them to take in enquiring about asbestos in the property.  This is particularly crucial since agent and property manager’s Professional Indemnity Insurance Policy does not cover the risks associated with asbestos related claims.

In January, Work Cover met with Estate Agents Co-operative Ltd, NSW Fair Trading and REINSW to discuss this issue.

During the meeting, discussion was had regarding the need to clearly outline to agents, property managers and consumers the steps that they need to take regarding asbestos in properties.  WorkCover will develop a factsheet regarding Asbestos, to tackle this need.  EAC will provide consultation on the content of this factsheet.

“The protection of agents, property managers, and consumers is paramount in this issue.  And whilst the WorkCover factsheet is necessary, it is very much a first step.  Agents and Property Managers cannot be expected to make a qualified assessment of whether asbestos is present in a property,” said Geoff Hunter, EAC Industry Liaison Officer.

Clear directions are crucial for the real estate industry in the dealing with asbestos.  Whilst the “Mr Fluffy” issue is of a great concern, it has aided in bringing to light how inadequate the procedures, for agents and property managers, in dealing with asbestos are.

The Estate Agents Co-operative will continue to work with Work Cover and NSW Fair Trading to lobby for any and all necessary changes to regulation and policy in order to ensure the protection of agents, property managers and the consumers.

New Internet Marketing Report Released

EAC is pleased to announce an update to the Internet Marketing Report for realestateworld.com.au.

The update to the Internet Marketing Report has been made available to realestateworld.com.au  subscribers.

We hope that you will love the new features and fixes we’ve packed into this update.

Summary of changes to Internet Marketing Report:

  1. Filter by Agent – Allows the user to run reports on all agents or just on the listings for a specific agent.
  2. Time Frame – Allows the user to run reports for the ‘Total Campaign’ of a listing or for the past ‘Week’ or ‘4 weeks’.
  3. Source – Allows the user to filter search results to the websites that the listing appears on, i.e. ‘All Websites’, ‘realestateworld.com.au’, ‘My Website’ (agent website)
  4. Branding – Allows the user to customise the report to a professionally branded standard.  Including: Agency logo, Agent Photograph, Agent contact details, Social media integration
  5. Professional and easily understood data – Internet Marketing Report provides Full Campaign Details which are designed to be easily understood by the vendors; including: List Price, Date of first advertised, days listed, total campaign interactions, total campaign shares. This feature is available to Pro and Elite subscribers only.
  6. Export – Allows user to easily export report data to CSV file for future analysis.

The new Internet Marketing Report will be available to realestateworld.com.au subscribers from 1 February 2015. Make sure you look out for it in your inbox.

New Insurance Offering for EAC Members

Estate Agents Co-operative Ltd and OAMPS have worked together to negotiate a new insurance offering for members of the Co-operative.

The Professional Indemnity insurance provides a broad range of coverage which enables agents to comply with their legislative requirements. In addition, the policy coverage also automatically extends to a number of key benefits:

  • Fidelity (Employee Theft) – cover included for no additional premium to a sub-limit of $100,000;
  • Employment Practices Liability – cover included for no additional premium to a sub-limit of $100,000;
  • Franchisor’s coverage – the policy extending to Franchisors as insured’s where they are joined to an action with the insured, or as a result of the insured actions;
  • Insurance Distribution Activities Extension – Cover is specifically extended to include distribution of insurance products as part of a Real Estate Agency’s activities. This is very relevant in the case of property management, where commonly agents provide insurance solutions or hold agencies with insurers to provide products for property owners, tenants or strata plans. With the changing landscape of strata requirements, this is especially prudent.
  • Referral Services Extension – Agents provide their client with a number of referral sources, be it property maintenance, tradespersons, conveyancing, building and pest inspections, mortgage brokers and many more. It could be alleged that the agent has a duty to perform due diligence on any persons or companies they recommend to their own clients. The policy cover extends to protect agents for their liability arising out of any allegations or claims arising from a referral relationship.
  • Bodily injury or property damage in any way is not excluded under the policy.  This is a common exclusion that relates to a primary exposure for agents, whether showing clients through open houses, hosting auctions or providing property management activities.
  • Legal costs are in addition to the policy limit, that is the limit is available for payments of any awards against the agent, rather than being used up by applicable legal defence costs;
  • Sub-Contractors and Consultants – the vicarious liability to the insured agency is covered for the actions of any sub-contractors and consultants;
  • Dishonesty of Employees – cover is provided to the agency for the actions of dishonest or fraudulent employees, provided such acts were not condoned by the Insured;
  • Minimum premiums for a Professional Indemnity cover of $1,000,000 in any one claim, with $3,000,000 in the Aggregate begin at $1,250 including all taxes, fees and charges.
  • Higher levels of cover are available as required.

We have also negotiated reduced rates for office insurance and public liability, as well as a policy for management liability cover for members in order to provide a holistic solution to their business needs.

EAC Director Anthony Chapman stated “I recently renewed my business insurance options using this new facility and I saved over a thousand dollars in premiums whilst getting superior cover at the same time.”

For more information, or to obtain a quotation, Members can speak with their local OAMPS branch, or contact Drew Ferns at OAMPS on 02 4226 8700.

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Estate Agents Co-operative Ltd

Change to Swimming Pool Provisions have been delayed

The NSW Office of Local Government has announced that the provisions that require a property with a swimming pool to have a certificate of compliance before it can be SOLD or LEASED will now commence on 29 APRIL 2015 (NOT 2014) an extension of 12 months.

This means that the requirement to attach a valid Certificate of Compliance or current Occupation Certificate to the Contract for Sale or to the Residential Tenancy Agreement will now not apply until 29 April 2015.

Click here to view NSW Office of Local Government circular to councils.

For further information members can call EAC Agency Practice Support on 1300 137 161