Interstate Landlords and NCAT the issue explained – Burns Case – High Court Appeal

It is the Constitution, it is Mabo, it is justice, it is the law, it is the vibe; it can be a big problem for property managers.

The 2017 EAC Insight Roadshow is proving very popular with Estate Agents across New South Wales.

Of particular interest to Estate Agents managing properties on behalf of interstate landlords is the recent NSW Court of Appeal decision in Burns v Corbett; Gaynor v Burns [2017] NSWCA (‘the Burns case’).

The Burns case has profoundly impacted the property industry in that it prevents the NSW Civil and Administrative Tribunal (‘NCAT’) determining matters involving interstate parties, i.e. landlord and tenants.

Since the Court of Appeal decision, NCAT has been dismissing up to one application per day for want of jurisdiction, despite s.119 of the Residential Tenancies Act 2010 (NSW) providing a prohibition on certain recovery proceedings in court.

The problem unfolds like this. There is an application to NCAT by an interstate landlord, made by their NSW Real Estate Agent; the dispute concerns a tenant’s non-compliance with a validly served Termination Notice for non-payment of rent. At the first conciliation hearing whereby the landlord’s agent advocates for Orders of termination, possession and the payment of money, the landlords application is dismissed. The tenant remains in the property, owing many weeks rent and there is no Tribunal or Court with jurisdiction in NSW to terminate the tenancy.

Likewise, a tenant who moves interstate and challenges the bona fides of a landlord claim over their rental bond cannot have their matter heard through NCAT. The issue is problematic for all the parties in the tenancy dispute.

In the middle of a housing crisis in New South Wales, we are aware of interstate landlords instructing agents to let their properties sit vacant rather than enter into a lease that perhaps could not be terminated. Likewise, the issues surrounding a rent-default claim on the landlord insurance policy become dubious. While the tenant remains in occupation of the property, the debt owed to the landlord does not crystalise, thus enlivening the insurance policy.

The issue arises because NCAT is not a “court of the State” for the purposes of Chapter III of the Constitution. A State tribunal which is not a “court of a State” is unable to exercise judicial power to determine matters between residents of two States because the State Law which purports to authorise the tribunal to do so is inconsistent with the s39(2) of the Judiciary Act and therefore rendered inoperative by s.109 of the Constitution.

Rather than creating panic amongst agents, the 2017 EAC Insight Roadshow explains in plain terms the Court of Appeal decision; it articulates who is affected, what is the ‘test at law’. Of critical importance, it provides Agents with the best practice for dealing with a dispute involving an interstate party before NCAT. EAC CEO David Crombie recommends that Members, who have not attended an EAC Insight event, that are faced with the issue contact Jemmeson & Fisher to receive advice on how to best deal with it.

Gary Burns has recently been granted leave to appeal to the High Court. However, as of the date of this press release, no hearing date has been set, and there is no basis to conclude that NCAT’s jurisdiction to hear and determine matters will change in the reasonably foreseeable future because of the High Court Appeal.

NCAT’s current practice is to dismiss applications in which jurisdictional issues apply and not to adjourn matters pending the High Court’s decision. This is consistent with NCAT’s obligations under s.36(1) of the Civil and Administrative Tribunal Act 2013 to facilitate the resolution of the real issues in dispute in a manner that is just, quick and cheap.

Agents are encouraged to attend the EAC Insight Events and hear from leading property experts together with the Regulator on significant issues impacting their agency practice.

To quote Australian folk law…. ‘in summing up it is the Constitution, it is Mabo, it is justice, it is the law, it is the vibe” …… and armed with the right knowledge, it does not need to be an insurmountable problem for property managers.

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Lisa Jemmeson
Senior Associate
Jemmeson & Fisher Solicitors and Accountants

Jemmeson & Fisher are the providers of real estate legal advice to EAC and Lisa represents EAC on the NCAT Consumer and Commercial Division Consultative and General/Commercial Forums

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

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.

Time to make changes to off-the-plan contracts in NSW

Estate Agents Co-operative (EAC) along with other industry stakeholders met with Minister for Innovation and Better Regulation, Victor Dominello, on Friday 23rd October 2015 to discuss better protections for purchasers in regards to off-the-plan contracts.

Off-the-plan contracts contain within them a Sunset Clause, a mechanism allowing the contract to be terminated if the development is not finalised within an agreed time frame or if the promised property cannot be delivered to the standard agreed.

Most sunset clauses’ allow the vendor or developer to rescind the contract if the construction runs over expected completion time.  The NSW Government has stated that it would appear some developers are using the sunset clause in order to cancel the contract and re-sell apartments at higher prices.  These clauses’ are also usually constructed in favour of the vendor/developer.

To determine the extent of the issue the government  held a consultation period of 3 weeks for the public to raise their concerns over these issues.  During which the department received close to 650 responses and in a large percentage of these responses the developer had triggered the sunset clause.

This issue is being largely driven by current market conditions which have seen housing prices rise rapidly, in turn we are now seeing developers using unwitting property purchasers’ deposits to fund building works and are then intentionally slowing works in order to rescind contracts and then resell to gain greater profits,

I think it is great to see the Minister taking action to eliminate this practice  and I suggest that you will see changes early in 2016,

In attendance at today’s meeting were representatives from NSW Land & Property Information, Estate Agents Co-operative, Urban Development Institute of Australia, Law Society of NSW, Owners Corporation Network, Australian Bankers Association, Australian Institute of Conveyancers, Urban Taskforce, and HIA.

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.

Apple iOS 9 has is now available for download

Apple iOS 9 has is now available for download. Apple will tell you it all new but they are very good at marketing. Expect a different look and feel. There are several new and cool features especially for the iPad and you can expect better battery life on my recent devices. To give you an idea the download is 1Gb on my iPhone6 and 1.1Gb on my iPad Air 2. For more information see http://ow.ly/SmugY

KTM Adventure 1190 Build

Late last year after a motorcycle tour to Vietnam I decided to take get into more adventure style motorbike riding. For some years I had a road bike and a dirt bike and with work and other commitments didn’t really get the time to ride either as much as I would have liked. I decided that I would look for a bike that would would allow me to do both and without compromise. After doing much research on the internet and riding several bikes I settled on the 2014 KTM Adventure 1190 EDS. All I can say is what a bike, no wonder it has been described as the best all around motorcycle in the world.

This video gives you some idea of the technology that the bike has.

On road the bike is amazing and to give you an idea of the performance the bike does 0 – 100 km/h in 2.7 seconds andthe quarter mile in 10.6 seconds. This video will give you some idea of the performance on road.

I was somewhat sceptical of the off road abilities and have only done some fire trails at this stage and even on the Trail Attack II tyres which are more road orientated the bike handled above my expectations. To give you an idea of the off-road capabilities while this is the R version it gives you some idea. I will be fitting Continental TKC 70 tyres shortly.

Taking Delivery

KTM were running a special when I purchased the bike and I received a touring screen, heated grips, touring panniers and crash bars at no extra cost.

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Before the bike even left the dealer it had its first modification in the form of a Uni-Filter Performance filter kit to give me the necessary protection in the dirt.

The build begins…..

Protection

R&G Racing Bar End Sliders for the road

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R&G Racing Fork Protectors

R&G Racing Frame Plugs – I still need to put the cover on

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Touratech Brake Fluid Reservoir cover

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Stoneguard Paint Protection

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Radiator Guard by Rad Guard

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B&B Off Road Bash Plate – painted black

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Navigation

Quick-Lock GPS Mount by SW-Motech

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Waterproof and shockproof iPhone 6 case by SW-Motech

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Strike Genius BT GPS with Hema Maps

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R&G Racing Easy Grip Tank Traction Pads

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Barkbusters VPS Handguards

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AGV AX8 Dual Evo Helmet

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Performance

Wings Short Titanium Exhaust with carbon fiber heat shield – in addition to adding a great note one of the main reasons for the exhaust was a 4 kg weight saving.

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Comfort

Wings Carbon Fiber heat shields – one of the know issues with the KTM Adventure 1190 is the heat that flows up onto your legs and these were the fix.

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Off Road 

Touratech Mudguard riser raises the height of the front guard for better clearance in mud.

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Side Stand Base by SW-Motech

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Continental TKC 70 Tyres

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Touring

SMH-10R Low Profile Motorcycle Bluetooth Headset & Intercom

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KTM Tinted Tall Screen

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Rear Rack from SW-Motech

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Rotopax Fuel and Water Cells

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THE BEST OF THE BEST IN NSW AUCTIONEERING

Estate Agents Co-operative and Real Estate Institute of Australia have once again hosted the NSW heats of the Australasian Auctioneering Championships. 10 of the top auctioneers in the state fought it out for a place in the National Championships.

The competitors in this year’s heats included:

Andrew Cooley – Cooley Auctions
Briannan Crawford – Cooley Auctions
Clarence White – McGrath Estate Agents
Damien Cooley – Cooley Auctions
Edward Riley – McGrath Estate Agents
Gavin Croft – Bresic Whitney Estate Agents
Joshua Larsen – McGrath Estate Agents
Leon Axford – Axford Auctions
Lucas Cannan – Think Real Estate
Will Hampson – My Auctioneer

The winner in this year’s final was EDWARD RILEY of McGrath Estate Agents (pictured) with the runner up DAMIEN COOLEY of Cooley Auctions.

Edward and Damien will now go onto the National Championships in the hope of securing a place at the Australasian Championship in Melbourne 1 – 3 September 2015.

“Both Edward and Damien I’m sure will do NSW proud at the National Championships,” said Dale Whittaker, Chairman of EAC. “The absolute best in NSW auctioneering came to compete today, so Edward and Damien should be very proud and I look forward to watching them compete in Melbourne.”

“I would like to thank all the competitors for their entry into this year’s competition, I wish you all the best and I think that it is great to see the number of high quality entrants in this year’s heats,” said Neville Sanders, President of REIA.

EAC and REIA would also like to thank the major sponsor of the NSW heats, AON. AON is a sponsor of the REIA and was recently announced as the Insurance Partner for Estate Agents Co-operative.