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New Strata Laws

Posted by on Nov 1, 2016 in Conveyancing News, News |

On 30 November 2016 new laws (the Strata Schemes Development Act 2015 and the Strata Schemes Management Act 2015) affecting strata schemes in NSW will commence. Some of the changes include: 1. The executive committee will be known as the strata committee; 2. The sinking fund will be known as the capital works fund; 3. The owners corporation can defer its obligation to maintain and repair common property if it is has taken action against another party who caused the damage until the completion of that action provided safety is not affected; 4. The owners corporation can arrange for local Council parking officers to come onto common property and fine people for parking contrary to signs and notices; 5. Owners will be allowed to make cosmetic changes to their lots without approval such as installing picture hooks, painting, laying carpet, installing built-in wardrobes or blinds and curtains; 6. Owners will be allowed to carry out minor renovations to their lots with the approval of the owners corporation at a general meeting but without the need for a special resolution. Minor renovations will include renovating a kitchen, installing wood or other hard floors, installing wiring or cabling and reconfiguring walls; and 7. A strata renewal process has been introduced by which 75% of lot owners can approve a strata renewal plan for redevelopment of the strata parcel. The plan has to be approved by the Land and Environment...

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New Laws to Stop Agents Underquoting

Posted by on Feb 4, 2016 in Conveyancing News, News |

From 1 January 2016 changes to the Property , Stock and Business Agents Act 2002 commenced so as to prohibit real estate agents from engaging in underquoting i.e. when an agent intentionally understates the estimated selling price of a property which can result in potential buyers wasting time on inspections and money on property reports and legal fees. The new changes, which apply to residential property only, include the following: With respect to vendors 1. In an agency agreement with the vendor the agent must include an estimate of the likely selling price which may be a single figure or a price range provided there is only a 10% difference between the highest and lowest prices; 2. An agent is also required to ensure the estimated selling price remains reasonable and must revise it if it ceases to be reasonable; and 3. At the time of providing an estimated selling price or a revised one an agent must provide the vendor with evidence to support the price estimate; With respect to purchasers 1. An agent is prohibited from publishing an advertisement regarding the sale of a property indicating or suggesting a price less than the estimated selling price given to the vendor; 2. Also, an agent must not use phrases such as “offers above” or “offers over” a certain price or similar symbols or words like “ +”; 3. The definition of publishing an advertisement includes inserting an advertisement in any newspaper, publicly exhibiting an advertisement in view of persons passing by, delivering the advertisement by way of document sent to any person, showing the advertisement on a website or sending the advertisement by e-mail; and 4. A real estate agent is prohibited from making a statement, while marketing a property, representing to potential buyers that a property is likely to be sold for a price less than the estimated selling price given to the vendor. In such a case, the agent can be ordered to forfeit part or the whole of the commission earned. Any breach of the above requirements is an offence carrying a penalty up to $22,000.00. February...

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New Unfair Contract Protections for Small Business

Posted by on Nov 23, 2015 in Business Sale & Purchase News, Commercial Agreements & Disputes News, Conveyancing News, Leases News, Litigation News, News |

The Federal Government recently passed legislation amending the Australian Consumer Law and the Australian Securities and Investment Commission Act so that it will extend protections to small businesses from unfair terms in standard form contracts with other parties as from 12 November 2016. A standard form contract is one pre-prepared by one party to the contract and where the other party is given no real opportunity to negotiate its terms. The protections will apply in favour of small businesses (i.e. one employing less than 20 people) where it is offered a standard form contract by another party for: * the supply of goods and services * the sale or granting of an interest in land (including a lease) * the supply of financial products and services In order to obtain the protections the upfront price payable under the contract must be no more than $300,000.00 or $1 million if the contract is for more than 12 months. Under the protections any unfair term in a standard form contract will be void and therefore not be binding on the small business. Examples of terms that may be unfair include: * terms that enable only one party to avoid or limit their obligations under the contract * terms that enable only one party to terminate the contract * terms that penalise only one party for breaching or terminating the contract * terms that enable only one party to vary the terms of the contract In order to determine whether a term is unfair an application would have to be made to an appropriate tribunal or court. However, just the threat of making such an application may resolve the dispute with the other party. It is important to note that the unfair contract protections apply to small businesses whether they are the acquirer of goods and services etc. or the supplier. This means that if a small business offers a standard form contract to another small business that other business can claim the unfair contract terms protections. All small businesses must now consider reviewing all standard form contracts with other parties due to commence, renew or be varied from 12 November 2016 to determine whether any of the terms are possibly unfair and need amendment so as to not to offend the new regime. November...

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New Laws for Off-The-Plan Purchases

Posted by on Nov 23, 2015 in Conveyancing News, Litigation News, News, Strata Matters & Disputes News |

A new amendment to the Conveyancing Act 1919 was passed by the NSW Parliament and applies from 2 November 2015 to the purchase of off-the-plan residential strata units or residential lots i.e. strata units or land lots awaiting creation following the finalisation of building works or sub-division. There have been concerns about developers using a “sunset clause” (a provision in a contract allowing the contract to be terminated if the strata or land lot is not created by the sunset date) to obtain a financial gain by deliberately delaying projects thereby entitling them to activate the clause and re-sell the property for a higher price. The purchaser would be left with nothing after incurring conveyancing costs. The new amendment provides that a vendor must give the purchaser at least 28 days written notice before rescinding a contract under a sunset clause. The notice must state the reasons for the proposed rescission and the delay. Even then the vendor can only rescind with the purchaser’s written consent or after obtaining an order from the Supreme Court of New South Wales. If the vendor is forced to apply to the Supreme Court it will take into account various factors such as: * the terms of the contract * whether the vendor has acted unreasonably or in bad faith * the reason for the delay * whether the subject lot has increased in value * the effect of the rescission on each purchaser * any other matter the Court considers relevant The vendor is also required to pay the purchaser’s costs of the proceedings unless the refusal to consent is considered unreasonable. If a developer determines that there is a substantial profit to be made by delaying a project and invoking a sunset clause to rescind a contract it can still make life difficult for a purchaser. One obvious tactic would be to offer a purchaser a financial incentive to consent to the rescission while at the same time warning the purchaser that it will claim in any application to the Supreme Court that the purchaser’s refusal to consent is unreasonable so that no legal costs will be recoverable. So, despite this commendable attempt at consumer protection the developer will still find a way to apply maximum pressure to purchasers. And many may well give in rather than face a long and costly legal battle. November...

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Changes to Home Building Act

Posted by on Jan 19, 2015 in Building Disputes News, Conveyancing News, Litigation News, News, Strata Matters & Disputes News |

The Home Building Act 1989 deals mainly with the the licensing and regulation of builders performing residential building work. However, it also gives the benefit of warranties and insurance in respect of such work. On 15 January 2015 certain retrospective amendments to the Act commenced. Also, on that date the Home Building Regulation 2014 commenced. The position is now as follows: 1.  The term “residential building work” means any work involved in: (a)    the construction of a dwelling; or (b)    the making of alterations or additions to a dwelling: or (c)    the repairing, renovation, decoration or protective treatment of a dwelling. The term also includes “specialist work” defined to include plumbing and electrical wiring work. However, excluded from “residential building work”  are any work (other than specialist work) the cost of which does not exceed $5000.00 and internal painting work. 2.    The term “dwelling” includes a swimming pool or spa, cupboards and vanity units affixed to the dwelling, driveways, retaining walls and fences. 3.    Warranties by a licensed contractor are implied into a contract to do residential building work including one that the work be done with due care and skill. 4.    The benefit of the warranties is extended to a successor-in-title to the person entitled to the benefit of the statutory warranties. 5.    The warranty period is 6 years after completion of the work for major defects and 2 years for all other defects. 6.    A “major defect” is defined as a defect in a major element of a building (i.e. a load-bearing component of a building that is essential to its stability or any part of it or a fire safety system or waterproofing) that is attributable to defective design, defective or faulty workmanship, defective materials etc. that causes or is likely to cause: (i)  the inability to inhabit or use the building or part of it; (ii)  the destruction of the building or part of it; or (iii) the threat of collapse of the building or part of it. 7.    With regard to the commencement of statutory warranties, for new buildings in a strata scheme the completion of residential building work will occur when an occupation certificate is issued authorising the occupation and use of the whole building. 8.    A licensed contractor is required to take out insurance under the Act in respect of the residential building work to be done under a contract if the contract price exceeds $20,000.00. It covers the person on whose behalf the work is being done or successor-in-title against the risk of loss resulting from non-completion of the work because of the insolvency, death or disappearance of the contractor. January...

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New Swimming Pool Requirements

Posted by on Mar 15, 2014 in Conveyancing News, News |

Under changes to the Swimming Pools Act 1992 pool owners must place their pool or spa on an online register. Owners may be fined if the pool is not registered. Pool fencing must also comply with with the Act. A swimming pool is defined to include a spa pool. From 29 April 2016 a Contract for the sale of a property that contains a pool must attach either: (a) a valid certificate of compliance issued by either the local Council or an accredited certifier under the Act; (b) a relevant occupation certificate and evidence that the swimming pool or spa is registered under the Act; or (c) a valid certificate of non-compliance issued under the Act. For newly constructed swimming pools,  a valid occupation certificate and evidence of swimming pool registration may be attached to the Contract in lieu of the certificate of compliance. Failure to attach one of these documents to the Contract may entitle the purchaser to rescind the Contract within 14 days of exchange of Contracts. Where a vendor attaches a certificate of non-compliance to the Contract the purchaser will have 90 days from the date of settlement to rectify the defects listed in the certificate of non-compliance and obtain a certificate of compliance. These provisions will not apply if the Contract relates to a lot in a strata or community scheme and the scheme comprises two or more lots or the Contract involves an off-the-plan purchase. If a landlord wishes to lease a property, which contains a pool, then from 29 April 2016 at the time the Residential Tenancy Agreement is entered into the landlord must ensure: (a) the pool is registered; (b) the pool has a valid certificate of compliance or a relevant occupation certificate; and (c) a copy of the certificate of compliance or occupation certificate is provided to the tenant. These requirements will not apply if the pool is within a strata or community scheme and that scheme comprises more than two lots. April...

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