Articles in Category: Business

General business information that may be of interest to leaders and business owners


New South Wales smoke alarms - coronial inquest

13th July 2018

The NSW Coroner have released their findings and made recommendations (below) into the tragic death of Miata Jibba in a rental property. I strongly recommend reviewing the inquest report which you can review here.

The most likely outcome will be amendments to smoke alarm legislation in the near future. I have an escape plan document to give to tenants at Member online in folder 03 smoke alarms. I will be creating best practice documents for members in the coming weeks in light of the inquest recommendations for immediate best practice change.

The above information was emailed to NSW FREE mailing list - join our mailing by emailing your name, email and location (such as Dubbo) to This email address is being protected from spambots. You need JavaScript enabled to view it.

Review the inquest and findings here

 

Carpet cleaning and Queensland property management

Pets and pest control information; Real Estate Excellence member offices, please refer to the February 2018 Member Update or email us to receive.

Friday 8th June 2018

Good morning Real Estate Excellence members, a quick update (so much going on for you, sorry!). 
I have written to the RTA as shown below regarding carpets and pets, pool chemicals and more. I shall advise when I know more via the Real Estate Excellence FB Member group  and email as not all members of course are on social media and or not in this group.

Tuesday 5th June 2018

A best practice email/letter template to retract carpet cleaning special terms (as per advice from RTA training video) is now available for members at folder 6 carpet cleaning (property management/PME main folder), plus templates to assist members in advising and educating lessors.  login to member online to access or email us to receive. An email was sent to Platinum PME and Platinum non PME Member offices on 7th June 2018 with resources as per above.

Monday 4th June 2018

Click here to view training video from the RTA regarding special terms

 Property managers/owners often include carpet cleaning under special terms in a tenancy agreement to ensure a rental property is up to standard when the tenant vacates.

These special terms typically concern the obligations and responsibilities of a property manager/owner and tenant under the Residential Tenancies and Rooming Accommodation Act 2008 (the Act).

However, while carpet cleaning is not specifically referred to in the Act, the inclusion of a special term regarding carpet cleaning is not necessary, as carpet cleaning should be considered in terms of general rules around the standard and condition of a rental property.

Under section 188 (4) of the Act, the key phrase relating to tenants’ obligations is “as far as possible, in the same condition they were in at the start of the tenancy, fair wear and tear excepted”.

At the commencement of a tenancy, the standard or condition carpets are in should be clearly articulated through the Entry Condition Report with any evidence (i.e. photographs) attached.

The tenant, when exiting the tenancy, can then comply with their own obligations to clean the carpets to the same standard, fair wear and tear excepted.

If a special term states that a tenant must provide a receipt or engage a ‘professional’, it is a breach of section 171 of the Act (supply of goods and services). Tenants cannot be required to buy, or agree to buy goods or services from the property manager/owner or a person nominated by the property manager/owner.

For more information around tenancy and responsibilities, explore the RTA website or contact the RTA direct on 1300 366 311.

The RTA is a Queensland Government statutory authority that administers the Residential Tenancies and Rooming Accommodation Act 2008. We provide tenancy information, bond management, dispute resolution, investigations and prosecutions, and policy and education services.

Sourced from www.rta.qld.gov.au May 28 2018

RTA increases its prosecutions

Risks for property investors: Can your strata body corporate prevent you listing your apartment on Airbnb?

As the popularity of the “sharing economy” continues to grow unabated, issues can arise where regulations and commercial practices struggle to keep pace with technological change. While Airbnb hasn’t yet attracted the storm of controversy that Uber has, this may be starting to change as cities around the world, including in Australia, crack down on the home-sharing site.

In Australia the use of property for Airbnb is subject to regulation at multiple levels. For owners of units in apartment buildings however, there is an additional layer of regulation, the strata company by-laws. Since strata units are in such close proximity to each other, conflicts between unit owners can easily arise. Some unit owners may want to use Airbnb to let their units, because of the high returns, and indeed may have purchased an investment property on the basis of those returns. Other unit owners may object to short stay holiday accommodation in their complex because of fears of noise, disruption, security, loss of amenity and insurance and repair costs.

This situation has seen an increasing number of by-laws which purport to restrict short term letting. But are such by-laws valid?

The Position in NSW

The ability of strata by-laws to restrict short term letting varies between states. In NSW, the largest market for Airbnb in Australia, the position has been summarised by NSW Fair Trading’s ‘Strata Living’ fact sheet as follows:

“Strata laws prevent an owners corporation restricting an owner from letting their lot, including short-term letting. The only way short-term letting can be restricted is by council planning regulations.”

This is because of s.139(2) of the Strata Schemes Management Act 2015 (NSW) (SSMA) which states:

“No by-law is capable of operating to prohibit or restrict the devolution of a lot or a transfer, lease, mortgage or other dealing relating to a lot”

NSW tribunal decisions such as Estens v Owners Corporation SP 11825 [2017] NSWCATCD 63 have followed the interpretation outlined by NSW Fair Trading and struck down by-laws restricting short term letting. The position is similar in Victoria, where in Owners Corp PS 510391P v Balcombe [2016] VSC 384 the Supreme Court found that owners’ corporations did not have the power to restrict short term letting.

Recent WA and Privy Council Decisions

In contrast, the recent WA decision Byrne v The Owners of Ceresa River Apartments Strata Plan 55597 [2017] WASCA 104 saw the Court of Appeal uphold a by-law restricting short term letting to no more than 3 months in 12. The Court of Appeal found that the by-law did not present a restriction on disposal of units in the strata scheme, but only a restriction on how the units could be used.

The Byrne decision has been well-received in a recent UK Privy Council decision, O’Connor (Senior) and others v The Proprietors, Strata Plan No. 51 [2017] UKPC 45, dealing with by-laws in the Turks and Caicos Islands. It may seem odd that a Privy Council decision should be seen as relevant in Australia, given the Privy Council is no longer a part of the Australian legal system, however the relevant provisions in the legislation of the Turks and Caicos Island had been lifted directly from NSW legislation and was identical to s.139(2) of the SSMA.

The Privy Council found that:

“statutes prohibiting restrictions on dealing in strata lots do not prevent reasonable restrictions on the uses of the property, even though such restrictions may have the inevitable effect of restricting the potential market for the property.”

The Impact of these Decisions

Decisions of the Privy Council are no longer binding in Australia. However, the expectation of many is that NSW courts and tribunals will now follow WA and Privy Council decisions and determine that s.139(2) of the SSMA does not prevent by-laws from restricting short term letting.

In fact, there is already a NSW Supreme Court decision, White v Betalli [2006] NSWSC 537, which sets out that principle. In that case it was held that a restriction on the use of part of a strata complex for boat storage was not a restriction on dealing in granting an easement for boat storage.

Conclusions

There is now considerable doubt over whether the SSMA actually does prevent strata company by-laws from prohibiting short term letting in NSW. The uncertainty resulting from recent case law provides an extra headache for strata unit owners wishing to let their apartment on Airbnb, in addition to complying with zoning and planning requirements. It remains to be seen whether there will be legislative changes to clarify whether a body corporate can prevent short-term letting.

In the meantime, if you are purchasing a unit in a strata complex and you intend to use it for Airbnb, you need to pay close attention to the by-laws that exist in that complex, and be well aware that those can change over time. It is important to be involved in your strata body corporate and to be active in figuring out how to best manage any downsides associated with short term letting.

Sourced from www.lexology.com May 15 2018

Real Estate Agents – It’s all about form – Is your commission at risk?

Victorian case

 

In the recent Victorian Supreme Court of Appeal decision of Advisory Services Pty Ltd (t/a Ray White St Albans) v Augustin & Anor [2018] VSCA 95 the Court found that an estate agent was not entitled to claim commission totalling $385,000 as their written authority did not contain the precise wording as required by the Estate Agents Act 1980 (Vic) (Act).

Background

Augustin (Respondent) owned the property at 382 Greens Road, Keysborough and in signing an exclusive sale authority, engaged Advisory Services Pty Ltd (trading as Ray White St Albans) (Applicant) for the sale of the property. The Respondent sold the property however the purchaser defaulted under the Contract. The Respondent then engaged another agency to assist in selling the property once more, which the Applicant claimed was during the period of the exclusive sale authority. A dispute arose and the Applicant sued the Respondent for commission on both sales, totalling $385,000.

The trial judge in the Victorian County Court found that the authority was not enforceable, and therefore the Applicant was not entitled to that commission. The Applicant appealed that decision. The Victorian Supreme Court of Appeal looked at whether the Applicant was entitled to sue for any commission as their authority did not strictly comply with the Act.

Decision

The appeal was dismissed. The Victorian Supreme Court of Appeal upheld the decision of the trial judge and found that the Applicant was not entitled to the commission as its sale authority was unenforceable.

Pursuant to section 49A(4)(c) of the Act, an authority must contain a ‘rebate statement’, which statement:

  • is in a form approved by Consumer Affairs; and
  • states that an agent is not entitled to retain any rebate and must not charge the client an amount for any expenses more than their actual cost.

The Court found that the Act must be interpreted strictly in favour of consumers. A statement that an agent will not retain any rebate was held to be materially different to a statement that an agent is not entitled to retain any rebate. This is irrespective of whether the agent was seeking to retain a rebate in any event. Strict compliance is required.

The authority that was used by the agent in this instance contained language based on one of two forms approved by the Director of Consumer Affairs Victoria which is available for download from their website. One of these forms contains the satisfactory wording as required by section 49(4)(c) of the Act, but the other does not.

Impact of decision

Estate agents need to review their engagements and authorities to ensure they strictly comply with section 49(A) of the Act and contain the correct statements in accordance with the Act concerning the receipt of commissions.

As a result of the decision in this matter, the instructions for using the non-compliant form on the Consumer Affairs website have now been amended to note that agents still “need to include all the other requirements of section 49A” of the Act. Accordingly, agents cannot merely rely upon the forms posted on the Consumer Affairs website. This is the case notwithstanding that the statement itself, approved by the Director, provides that it is approved for the purposes of section 49A(4) of the Act.

The current form as approved by the Director of Consumer Affairs Victoria for circumstances where a rebate is not to be received does not contain wording sufficient to comply with the Act.

If you are an estate agent, it is imperative you ensure that your written engagement or appointment strictly complies with the Act. Non-compliance may result in:

  • over $15,000 in penalties for each breach of the Act;
  • you being unable to claim payments (including commission); and/or
  • you being sued for unlawfully claiming payments.

If you are a landowner who has sold a property or if you are in the process of selling a property and you have made or expect to make payments to an agent, you may wish to have your written engagement reviewed to determine your liabilities and whether the engagement strictly complies with the Act.

The REIV has taken steps to update its online forms and has provided advice to agents as to how to correct already purchased hard copies of sale authorities.

Ultimately, it is now incumbent upon the Victorian Parliament to immediately provide a legislative solution to rectify an obvious administrative error in the Consumer Affairs forms. While a legislative solution has been mooted, it is yet to be put before Parliament. We will be making submissions to the government in this regard.

Given the forthcoming election in November 2018, it will be interesting to see whether the government will prioritise the rectification of this important issue in the real estate industry.

Logie-Smith Lanyon Lawyers - Bryce Anderson and Jeremy Ashley

sourced from ww.lexology.com May 15 2018

 

Private training in your office, consultancy and more

Stacey Holt - property management risk management, compliance, time management and best practice

All education and training sessions are written and presented by Stacey Holt.

Queensland property management private training and consultancy services. 

(services also available for all areas of Australia).

"Property Management private training" services often also include consultancy and advice. As the training is interactive, with questions about systems and procedures asked and explored, the usual outcomes of most training in your office is revised systems and procedures for compliance, time management, risk management and best practice.  Contact us for a no obligation proposal  and download the "Property Management Excellence menu" here.

Stacey Holt has been a speaker at many Queensland and National conferences such as the Property Investor National Conference, REIQ property management conference, Meth Lab Conference, LJ Hooker National Conference, PPM National Conference and First National Conferences. Stacey is the only person who presents Real Estate Excellence half day training and special one day events.

Stacey has written and presented hundreds (if not thousands) of real estate training programs in Queensland. Many programs have also been written and delivered throughout Australia on best practice and agency risk management. The many programs that have been written and presented by Stacey have all had the four main streams and focus required for today’s real estate professional; best practice, compliance, time management and risk management. Click here for more information about Stacey Holt