Real estate agent. Does this FSBO (For Sale By Owner) short film seem familiar?

Ever found yourself shaking your head in disbelief at a prospective vendor, who decides to go it alone and sell privately? The reality is a good agent always makes their job look easy. In fact, some of you make it look so simple that every man and his apprentice think they can do the same — if not better.

How many people have told you, “I think I would make a good agent”?

Next time you come across a prospective client who is about to make that scary choice of FSBO, you might want to save them some heart ache and money by sending them a link to our main character, David, who decides he doesn’t need the services of a professional agent. After all, David is a creative genius with an iPhone camera , social media guru and a born sales person. What could possibly go wrong?

Purpose made for Australian real estate agencies, this 3-part mini-series, of only a couple of minutes each, will have you reeling with embarrassment as you watch the bumbling efforts of David, an FSBO ‘practitioner’.

Whether it gets your office or clients laughing, or is even suitable to send to a prospective vendor, this slice-of-life skit will take you to a place that is only so real.

Episode 1:
Full of confidence, David attempts to sell his house. However, it soon becomes apparent just how much he lacks to achieve a great result.

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

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.

National Licensing for the Real Estate Industry is not going to proceed

The Council of Australian Governments (COAG) held its 36th meeting today in Canberra and it would appear as though National Licensing for our industry will not be proceeding.

In the Communique from the meeting it was stated:

“COAG noted that, following the outcome of extensive State-based consultation, the majority of States decided not to pursue the proposed National Occupational Licensing Scheme (NOLS) reform. Most jurisdictions identified a number of concerns with the proposed NOLS model and potential costs. States instead decided to investigate approaches that would increase labour mobility and deliver net benefits for businesses and governments.”

” To this end, States agreed to work together via the Council for the Australian Federation (CAF) to develop alternative options for minimising licensing impediments to improving labour mobility and to manage the orderly disestablishment of the National Occupation Licensing Authority from early 2014.”

While EAC was in favour of National Licensing, we had stated that in the proposed form we did not believe it was in the best interest of the industry or consumers. We can now look forward to maintaining the educational standards and professionalism of the real estate occupations.

EAC Board meets with Member Principals from Northern Rivers

The EAC Board held its November Board Meeting in Ballina on Wednesday, 27 November followed by a meeting of Member Principals from the Northern Rivers. At the meeting the Chairman Dale Whittaker and CEO David Crombie updated the members on some of the initiatives the Co-operative is currently working on and other changes that are currently affecting the industry. Each of the Directors provided the members with an overview of the property market in their respective areas and in return the meeting provided the directors with an opportunity to obtain feedback directly from the members.

EAC Chairman Dale Whittaker and EAC CEO David Crombie presenting at Northern Rivers Members Meeting

EAC Chairman Dale Whittaker presenting at Northern Rivers Members Meeting

A lighthearted moment shared by EAC Board and EAC members

A lighthearted moment shared by EAC Board and EAC members

The EAC Board would like to thank all the members that attended.

Warning for Real Estate Agents – Fraudulent letter from ATO

EAC Members are advised that the letter purporting to be from the Australian Tax Office is fraudulent and should be ignored. Click here to view letter.

This letter is not from the “Australian Government/Australia taxation Office” as stated and is endeavouring to obtain both personal and property information about your clients for fraudulent purposes.

You should not respond to the letter or forward it to your clients.

Members may call our Practice Support area for more information.

NSW Fair Trading Announces New Trust Account Audit Rules

Amendments to the Property, Stock and Business Agents Act 2002, will commence from 1 July 2013. These amendments will change the way licensees fulfil their responsibilities in relation to the auditing of trust accounts.

Currently, licensees who have held or received trust money during their audit year are required to have their trust accounts audited and lodge the audit returns with NSW Fair Trading whether the audit was qualified or not.

Licensees who did not hold or receive trust money during their audit year are required to lodge a statutory declaration with Fair Trading to that effect.

New Laws
The amendments provide a new framework for how licensees handle their trust account auditing responsibilities under the Act, commencing from the 2012/2013 audit year.

The changes include:

  • While all licensees who held or received trust money during their audit year will still need to have their trust accounts audited, only those audits which are qualified by the auditor are required to be lodged by the auditor and licensee with Fair Trading.
  • The term ‘qualified’ is now defined in the amendments to the Act.
  • The list of persons who are qualified to audit trust accounts under the Act is extended to include authorised audit companies, members of a Professional Accounting Body as defined under the ASIC Regulation 2001 (ie. CPA Australia, Institute of Chartered Accountants in Australia and National Institute of Accountants) holding a Public Practising Certificate with one or more of those bodies.
  • A requirement on the auditor to forward a copy of the trust account audit (if qualified) to Fair Trading within 14 days after providing the report to the licensee.  A maximum penalty of 50 penalty units ($5,500) is provided for a breach of this requirement.
  • Licensees who did not hold or receive trust money during the audit year will no longer lodge a statutory declaration to that effect.  Instead, licensees will be required to note whether or not they did so when they next re-apply for their licence.
  • Licensees are now required to hold a copy of their trust account audit (whether qualified or not) at their registered place of business, for at least 3 years, and make it available to Fair Trading inspectors for examination if required.

Click here to view the New Trust Account Audit Rules in detail on the NSW Fair Trading website.

In the Pipeline – What’s Happening at EAC

Welcome to 2013 and to the first edition of From the Boardroom for the year.

With the move to our new offices behind us, we are back into getting on with business and many of the changes that we implemented as part of the move are already delivering results in the way of reduced operating costs. We are constantly looking at ways we can do things better to improve our services without having to increase our subscription fees and prices. One of the biggest changes the Industry may face this year is in regard to National Licencing, as yet there have been no further developments in this regard since we made our submission. EAC continues to consult with government and other industry bodies to try to ensure that interests of Members and the Industry are protected. To view the submissions made by the various industry bodies, franchise groups and real estate practioners visit NOLA .

On the 14th December 2012, the Property, Stock and Business Agents Amendment (Professional Indemnity Insurance) Regulation 2012 was published. This long anticipated legislation requires that all licensees must be insured under a policy of Professional Indemnity Insurance in respect to the licensee or the licensee’s employer. This new regulation commenced on 1 January 2013 but will not take effect until 1 July 2013 in order to provide sufficient time for licensees to obtain suitable coverage. To obtain a quote or to check your current level of coverage contact EAC’s preferred insurance advisor’s, OAMPS Insurance Brokers on (02) 42268700 and don’t forget to mention that you are an EAC Member.

There have been several developments in regard to realestateworld.com.au. All of the listings on realestateworld. com.au are now being uploaded to odusee.com.au and we will soon be doing the same with realestate1.com.au in a content sharing arrangement which will see listings from this site uploaded to realestateworld.com.au as well.

We have also now released a mobile friendly version of the site that consumers will be directed to. Work continues on the development of a new realestateworld.com.au site and we are working towards a release date in the next couple of months. In December we had two bumper editions of the realestateworld.com.au publication with the Illawarra achieving 100 pages and the Far North Coast and Mid North Coast being not too far behind with 92 pages. While the focus these days is on the online world, Members continue to obtain very cost-effective print advertising though the support of what is their publication.

We have also now released our Agent Mobile web sites for Members. With the amount of real estate searches now taking place on mobile devices, a mobile friendly version of your website needs to form part of your online marketing strategy.

On the Red Square front, there have been several enhancements including updates to Red Square Mobile. One of the latest editions to Red Square is NSW Telephone Data, the phone data is checked against the ADMA Do Not Call Register and is updated every 30 days. For those Members on a package the telephone data is available at no additional cost.

One of the biggest developments we have been working on in regard to Red Square is the new Listing Management feature. This feature is now undergoing final testing and will be released to a select number of Agents in February for feedback.

In October I attended and presented at the International Year of Co-operative’s Conference. It was an interesting conference on several fronts. It is surprising just how many large Australian businesses, and I am talking some with billion dollar turnover, operate under a Co-operative structure. Co-operatives are distinguished from other forms of organisation by their democratic structure and the fact that capital is used to service the common needs of the members, rather than to provide individual benefit. As a result of some of the ideas I picked up at the conference this year I will be working with the Board to develop new ways to make Membership more beneficial to Members as the marketplace and industry continue to change.

Over the coming months we will be conducting some surveys and focus groups to get a better understanding of Members’ needs but if you have any feedback in the meantime feel free to call me.

All the best in the coming year.

Professional Indemnity Insurance – Mandatory For All Licensees

The Property, Stock and Business Agents Amendment (Professional Indemnity Insurance) Regulation 2012 was published on 14th December 2012.

This long anticipated legislation requires that all licensees must be insured under a policy of Professional Indemnity Insurance in force in respect to the licensee or the licensee’s employer.

All policies must be for a minimum cover of $1M for any one claim and not less than $3M in the aggregate for all claims during the period of insurance and provide cover for specified types of liabilities.

This new regulation commences on 1 January 2013 but will not take effect until 1 July 2013 in order to provide sufficient time for licensees to obtain suitable coverage. Licensees who hold an existing policy, issued before 1 January 2013, will have until 1 January 2014, or to the expiry date of that policy to ensure their existing policy complies with the regulation.

For enquiries as to how this applies to your business operations please call Geoff Hunter, EAC Industry Liaison Officer on 1300 137 161 or Bruce McCluskey, OAMPS Insurance Brokers on (02) 42268700.

New Swimming Pool Laws Will Affect Sales and Property Management

The Swimming Pools Amendment Act 2012 was passed by both houses of the NSW Parliament on 23 October 2012.

This Act makes a number of significant changes to the Swimming Pool Act 1992 with consequential amendments to the Conveyancing (Sale of land) Regulation 2010 and the Residential Tenancies Regulation 2010.

For the sale of property it will be a requirement to have a valid certificate of compliance in respect of the pool or a relevant occupation certificate annexed to the contract of sale.

When leasing property a copy of the certificate must be provided to the new tenant. The Residential Tenancy Agreement will be amended to reflect this requirement.

A relevant occupation certificate is defined in the legislation as “an occupation certificate issued under the Environmental Planning and Assessment Act 1979 that is less than 3 years old and that authorises the use of the swimming pool.”

Both the above requirements will come into force from 23 April 2014.

Other changes include:

  1. Local councils must, by no later than 23 April 2013, develop and adopt a programme for the inspection of swimming pools within its area.
  2. A Register of swimming pools is to be established and administered by the Director General.
  3. By no later than 23 October 2013 local councils must make provision for the initial and subsequent inspection of pools in accordance with their adopted plan.
  4. Swimming pool owners are required to register their pools with their local councils by no later than 23 April 2013.

Property managers should advise their clients who own pools of the requirement to register them by 23 April 2013 and then subsequently ensure that a valid Compliance or Occupation certificate is provided with each new tenancy agreement entered into from 23 April 2014.

Sales staff should also inform prospective vendors of the requirements, having regard to the relevant dates and also check with their solicitor or conveyancer regarding compliance with the provisions.

Click here to access the Swimming Pools Amendment Act 2012.