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.

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.

NSW Government Releases Options Paper on Short-Term Holiday Letting

In 2016, the NSW Legislative Assembly Committee on Environment and Planning conducted an inquiry into the adequacy of regulation for short-term holiday letting in New South Wales; the Government response to the Parliamentary Committee was released on 20 April 2017. The Government generally supports these findings and recommendations, as well as traditionally supporting any findings and recommendations of the Parliamentary Inquiry.

The Options Paper is the next step in determining a policy framework – by engaging with stakeholders, industry and the general public to discuss what level of regulation is required to best meet the needs of the NSW community.

With Airbnb listings doubling in Sydney in the last 12 months, it is going to become an issue and more so in Strata. It has already, and will increasingly, become a bigger issue for the real estate industry and now is the time to make our position known.

Submissions are due by the 31st October 2017. EAC will be making a submission and is looking for your thoughts as well as feedback to include in the submission.

Feedback can be provided by commenting on this post, or sending your thoughts to membership@eac.com.au

Further information and the Options Paper can be found here.

To provide your feedback please complete our survey by Friday 20th October 2017 to provide us enough time to write the submission.

David Crombie
Chief Executive Officer

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.

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.

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

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.

Estate Agents Co-operative introduces new cost effective CPD Workshops

Real Estate CPD Workshops

We have just released our CPD Workshop Calendar for the next 6 months which includes Property Management 2014 and Commercial and Retail Leasing and Management 2014 workshops. These workshops have been designed for agency principals and all property management staff.

 

 

These practical “hands on” sessions are  important for those who wish to update their skills in this area and who are looking at delivering client service that is second to none.

The workshops provide 12 CPD points and our early bird rates are as low as $135.00 for EAC Members which provides a significant saving over the rates charged by many other CPD providers.

Click here to view the CPD Workshop calendar for dates, locations and registration details.