All strata buildings in NSW must be fitted with window safety devices by 13 March 2018

Do you live in, own or manage a townhouse or unit block? To prevent children falling from windows, strata schemes must have window safety devices installed on all applicable windows by 13 March 2018.

The devices must:

  • enable the maximum opening to be less than 12.5cm (a device that allows the window to be fully opened, fully closed and locked at less than 12.5cm is compliant), and
  • be able to withstand a force of 250 newtons (which is equal to 25 kilograms of force).

A number of children fall from windows or balconies in Australia each year, with children under 5 being most at risk. Windows with safety devices installed may still be fully opened, but it is recommended that devices be used whenever children are present, to prevent falls.

Owners corporations may face fines if locks are not installed on applicable windows by 13 March 2018.

Find out more about window safety device requirements on the Fair Trading website.

NCAT – Diversity Jurisdiction – Dealing with issues where a party permanently resides interstate

Many of you would be aware of the issue that existed during 2017 with the NSW Civil and Administrative Tribunal (NCAT) and its inability to hear and determine matters between parties residing in different states of Australia due to federal constitutional law.

On 1 December 2017 the Justice Legislation Amendment Act (No 2) 2017 commenced and its introduction dealt with the issue. Updated information and a fact sheet has been released by NCAT which provides more detail on the issue, the changes and what they mean.

Some important things that you need to know:

  • “Diversity jurisdiction” only affects where the party residing interstate is a natural person. There is no issue if the party is a corporation, NSW Government, a non-permanent resident of the other state or a resident of a territory. If a party resides in the ACT or NT, they are not affected.
  • As the Act only provides NCAT with jurisdiction, all claims must be lodged with NCAT in the first instance.
  • NCAT will attempt to resolve through an agreed settlement. If no settlement or, a settlement requires enforcement, the claim will need to go to the Local or District Court depending on the amount claimed.
  • NCAT will provide a letter to the claimant and a copy of the claim lodged with it. The claimant then needs to attend their nearest court to complete a court summons and affidavit.
  • There are no additional lodgement fees unless the claim is substantially changed from what was originally lodged with NCAT.
  • Parties can continue to represent themselves.

We have updated our Residential Tenancy Agreement to include a checkbox for this information and have suggested to NSW Fair Trading that they update the New Tenant Checklist as we believe that the tenant should know this information when beginning the tenancy.

EAC has been advised by NSW Fair Trading that there are around 200 matters (across a range of matters, Australian Consumer Law, anti-discrimination, residential tenancy) that have been declined or dismissed and NCAT will write to the parties advising of the option now available.

Preparing for the Industry Reforms – Licensing and Training – what you need to know

After many years of advocacy by EAC on behalf of members and countless meetings with NSW Fair Trading and Government, last week saw the Property, Stock and Business Agents Amendment (Property Industry Reform) Bill 2017 introduced to Parliament. Discussion on the Bill will take place in February 2018 when Parliament sits again and our current understanding is that the changes will come into effect in the second half of 2018.

EAC has worked through several drafts of the Bill with NSW Fair Trading to ensure that to the extent possible that the changes will work from an industry practice perspective.

The reforms introduce several changes in relation to licensing and will affect everyone currently working in the industry. We recommend that Certificate Holders through to Principals watch this video as there are changes that you can start preparing for now that will make it much easier for you once the changes come into effect.

In this video I talk with Rosy Sullivan, College Principal at Australian College of Professionals about how you can prepare for their introduction.

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.

Underquoting reforms set for early 2016.

Victor Dominello, the Minister for Better Regulation, has said that reforms to rules surrounding underquoting would provide “clarity” for agents, vendors and buyers.

NSW Fair Trading defines under-quoting as making “a statement in the course of advertising a residential property for sale that is less than the agent’s true estimated selling price as recorded on the agency agreement”.  Currently penalties for engaging in underquoting are fines of up to $22,000.

Estate Agents Co-operative (EAC) has been working with and provided advice to the Real Estate and Property division of NSW Fair Trading on the new reforms.

The new reforms, which have been introduced to parliament and are expected to commence in early 2016, will see stricter rules for agents in regards to the estimated selling price in their agency agreements.  Agents who do not adhere to this estimated price in advertising will face losing fees and commissions.  Further to this, phrases such as “offers over” or “offers above” or any similar phrase will also be prohibited in advertising.

The proposed underquoting reforms will ensure any estimated price communicated to vendors and prospective buyers represents what an agent actually expects a property to sell for.

Under the proposed reforms, an agent must:

  • Include their true estimate of a property’s likely selling price in the agency agreement (also called the sales agreement).
  • Record the evidence that informed this estimate and provide it to the vendor in writing.
  • Ensure a price range is no greater than 10% of the bottom figure (eg. $500,000-$550,000).
  • Record all price estimates (quotes) provided while a property is marketed.
  • Ensure their price estimate remains realistic by updating it and advising the vendor in a timely manner if they are aware – or should reasonably be aware – of evidence or circumstances that changes it. The agent must advise the vendor of their revised selling price estimate and the evidence on which it is based in writing (eg. email) and amend the agency agreement. They must also update, as soon as feasible or practical, any marketing of the property that reflected the old estimate with the new selling price estimate.

Agents will not be able to:

  • Provide any price estimate less than what they have assessed a property is worth (as recorded in their agency agreement with the vendor). This applies whether the agent is advertising the property or in any communication with prospective buyers about the property’s likely selling price.
  • Advertise vague price information, including any statements such as “offers above” or “offers over” an amount, or “plus” a particular price (eg. $500,000+), which could misrepresent or obscure a property’s estimated value. Also, an agent must never indicate a selling price estimate that does not match the agent’s true estimate.
  • The reforms will introduce stronger penalties to deter underquoting. This includes fining agents up to $22,000 if they breach the new requirements. Agents could also have to forfeit their commission and fees if found guilty of underquoting. These commissions and fee payments will go towards the Property Services Compensation Fund, which supports consumers who have experienced financial loss as a result of property agent misconduct.

Mr Dominello’s office has also made clear that there have been 263 complaints about underquoting in the past two financial years.  With 63 of these complaints being made in March 2015.

In light of a volatile market agents should be reviewing their estimates and any marketing to reflect any change to the price estimate as a result of market or vendor feedback. We welcome the reforms announced by the Minster and feel they will make clear to agents as well as to consumers, the responsibilities when making these estimates.

The new legislation is currently in Parliament and would appear to be held up by opposition to some of the changes. Personally I believe the proposed changes can only assist the industry in being more professional in dealings with consumers both vendors and potential purchasers.

NSW Fair Trading to release data on consumer complaints

Last year NSW Fair Trading received over 40,000 complaints about traders across various industries including retail, motor vehicles, telecommunications, travel and real estate.

Consumers in NSW will soon be able to make more informed choices with Minister for Innovation and Better Regulation Victor Dominello today outlining plans to establish a consumer complaints register using data held by NSW Fair Trading.

“This data is currently under lock and key within the bureaucracy and we want to change that by amending the Fair Trading Act 1987 to give the agency the power to publish its complaints data for the first time,” Mr Dominello said.

“Consumers should have the right to know which traders have high numbers of complaints against them so they can take this into account when purchasing goods and services. We want to create a fairer and more competitive marketplace through open data.”

The proposed register would provide information regarding the number of complaints received about individual traders and is expected to act as an incentive for businesses to improve the way they deal with consumer issues and I believe that this is a good idea.

Open data is a key feature of the NSW Government’s ICT Strategy which encourages public sector agencies, where appropriate, to make high-value datasets available to industry and the community. Later this year this will include the Property Sales Information provide to many third parties including Estate Agents Co-operative.

The proposed register would provide information regarding the number of complaints received about individual traders and is expected to act as an incentive for businesses to improve the way they deal with consumer issues.

The Minister will establish a stakeholder roundtable to consider what form the complaints register will take, how regularly it will be published and how the information can be best utilised by consumers, traders and the media.

CHOICE, the Australian Retailers Association and the Business Council of Australia are among the industry groups which will be invited to participate in the roundtable.

Mr Dominello said a Bill would be introduced in the new Parliament which would create a statutory power for NSW Fair Trading to publish its complaints information.

 

NSW Government vows to crackdown on under quoting – Politics at it’s best!

I am sure that many of you like myself saw the reports in the media on the weekend with the NSW Premier Mike Baird and the Minister for Fair Trading Matthew Mason Cox vowing to crack down on agents that under quote if re-elected at the NSW election being held on 28 March 2015. This was also confirmed in this article on the Liberal Party website.

If we look at the Property, Stock and Business Agents Act 2002 (the Act) in this regard:
Section 72 of the Act prohibits an agent from making false representations with respect to the agent’s true estimate of the selling price of a property to either a seller or prospective seller of residential property.

Section 73 of the Act prohibits an agent, by any statement made in the course of marketing a property pursuant to an agency agreement for the sale of a residential property, falsely understating the estimated selling price of the property.

Section 75 of the Act extends the provisions of sections 72 and 73 to ‘estimated price range’ in the same way as it applies to ‘estimated price’.

The maximum penalty for a breach of the provisions is $22,000. It is interesting to note that there have been no fines issued or prosecution of agents for this practice in recent years.

EAC has been in discussions with Fair Trading Officers with regard to, what appears to be, an increase in the incidence of “under quoting” by some agents and the impact of significant price escalation driven by unprecedented consumer demand. This market activity and selling price increases has made the task of estimating future selling prices extremely difficult.

The comments made by both the Premier and the Minister fail to recognise the existing legislative requirements and the impact on consumer expectations of the agents if properly enforced. The greater majority of agents understand their responsibilities. For the few that don’t the law is already in place.

With the election looming I believe that the attack on estate agents was a “knee jerk” reaction and was purely for political gain (read votes) and not in the best interests of consumers or agents. The reality is that many well researched and well prepared estimates of selling prices by agents are often overtaken by buyer competition and market forces, factors outside the agents control and not readily predicted.

EAC enjoys a healthy working relationship with NSW Fair Trading and will continue to work with them to ensure that the interests of the industry and consumers are protected.

EAC Chairman Dale Whittaker is also disappointed with the approach that the government took on the weekend and he believes that the approach that NSW Fair Trading should be taking is to raise the entry level standards for the industry and through quality ongoing training.

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 co-ops law launches in NSW and VIC

The 3rd March 2014 saw the commencement of the of Co-operatives National Law in New South Wales and Victoria which provides the national legislative framework for Co-operatives.

The new laws mean less red tape and reporting burden for smaller co-ops, and for all co-ops, the ability to trade across state borders without dual registration.

For more information read the update released by NSW Fair Trading

For more information about Co-operatives you can visit the Co-operatives and Associations page on the NSW Fair Trading site.

NSW Fair Trading introduces changes to the Residential Tenancies Condition Report

Real Estate offices may have received an email from NSW Fair Trading on 28 February regarding a New Condition report for residential tenancies. The prescribed report has been changed by the addition of ‘window safety devices’ wherever ‘windows/screens’ appears. This change is effective from 1 March 2014.

eForms
For those offices using EAC eForms the necessary changes have been made and the updated form is now available for use.

Printed Forms
If you are using EAC printed forms these forms may still be used BUT YOU MUST write in the additional words”/window safety devices” as outlined above.

So on the form wherever you see “windows/screens” you must change this to “windows/screens/window safety devices”

EAC_Condition _ReportThe example above shows the change to EAC’s Condition Report on our eForms system.

These changes do not impose any obligation on the landlord to install window safety devices if none exist.

EAC believe that the notice provided by Fair Trading of this change was inadequate and is seeking clarification from Fair Trading as to the practicality of these changes and the likely implications for leasing and managing agents and members will be informed as soon as this advice comes to hand.

EAC Members may direct any questions they have to our Helpline on 1300 137 161.