NEWS

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. This applies to openable windows where the internal floor is more than 2m above the surface outside and within a child’s reach (less than 1.7m above the inside floor) – see the diagram below.
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 limited to less than 12.5cm is compliant), and
• be able to withstand a force of 250 newtons (which is equal to 25 kilograms of force).

Complying safety devices include devices attached to a window frame or robust bars (as long as the opening can be limited to less than 12.5cm and can withstand a force of 250 newtons). Complying devices must also be installed on applicable windows in all common access areas, such as stair landings.

If window safety devices are not installed by 13 March 2018, owners corporations may face fines. Owners corporations are not required to monitor or enforce the use of window safety devices but must ensure they are installed by the 13 March deadline.

Residents with safety devices installed can still fully open their windows if they wish to do so, but it is strongly recommended that devices be engaged whenever children are present, to prevent falls.

Find out more about window safety device requirements on the NSW Fair Trading website.

Source: NSW Fair Trading 29/1//2018

The new strata building bond and inspections scheme started on 1 January 2018.

Under the scheme, developers must lodge a building bond with NSW Fair Trading equal to 2% of the contract price for residential and mixed-use high rise strata buildings, before an occupation certificate is issued.

The building bond can then be used to pay the costs of rectifying any defective building work identified in a final inspection report. If there are no defects, the bond is released in full to the developer.

The scheme applies to construction contracts signed (or where there is no contract and building work commences) from 1 January 2018.

More information on the scheme and the requirements is now available the NSW Fair Trading website.

Source: NSW Fair Trading 29/1//2018

The Australian Taxation Office (ATO) is simplifying the way in which foreign resident capital gains withholding (FRCGW) payments are made.

Only one FRCGW payment is now required per settlement, even if two or more purchasers are included in the transaction.

When purchasers lodge their Purchaser payment notification with the ATO, they will receive a single payment reference number (PRN). This will be sent to the person listed as the primary contact on the purchaser payment notification form. They will also be sent one payment slip with a barcode that can be used to pay the withholding tax.

Only a single payment is required to pay the total withholding amount. However, where two or more purchasers are included in the transaction, they may choose to make separate payments. The same payment slip should be used for each payment.

Payment can be made to the ATO electronically or by cheque or in person at any Australian Post outlet quoting the PRN or using the payment slip (as applicable).

For more information visit the ATO website.

Source: NSW Fair Trading 29/1//2018

New laws to enhance fire safety in high-rise buildings will come into force today, Minister for Better Regulation Matt Kean said.

Mr Kean said the new powers form part of the NSW Government’s ten-point plan in response to the tragic Grenfell fire in June this year.

“We promised to introduce laws to prevent the unsafe use of building products in building and construction, and they come into effect today,” Mr Kean said.

Under the Building Products (Safety) Act 2017, the government can ban building products – for example, external wall cladding – from being used in unsafe ways.

“Any corporation or person who fails to comply with the ban will be subject to large fines,” Mr Kean said.

“A corporation found to be using a banned product will be fined up to $1.1 million, and individuals will be fined up to $220,000.”

Mr Kean said the new laws also give Fair Trading the power to investigate building products that may be unsafe for certain uses.

“Where appropriate, manufacturers or suppliers will be required to have their products analysed or tested to ensure they are safe,” he said.

“Builders, building product suppliers, manufacturers and importers can be compelled to produce records so dangerous building products can be tracked and pinpointed.

“The Grenfell fire was an absolute tragedy, and we have zero tolerance for shonky operators who are intent on selling or using unsafe building products.”

Mr Kean said the new laws also include provisions for the rectification of building work.

“NSW Fair Trading will notify the local council or relevant authority of any building that contains banned products for investigation,” he said.

“If appropriate, a rectification order will be issued, and Fair Trading will closely monitor the progress of all buildings that have been referred for investigation – including making sure that steps have been taken to minimise the safety risks.”

Source: NSW Fair Trading 21/12/2017

The inter-agency Fire Safety and External Wall Cladding Taskforce (the Cladding Taskforce) was established in June 2017 as part of the NSW Government’s ongoing work to address fire safety risks associated with external wall cladding.

Six months on, the Cladding Taskforce, comprising representatives from the Department of Finance, Services and Innovation (DFSI), the NSW Data Analytics Centre (DAC), the Department of Planning and Environment (DPE), Fire & Rescue NSW (FRNSW), the Office of Local Government (OLG), Treasury and the Department of Premier and Cabinet (DPC), has worked to address concerns over fire safety risks arising from the use of aluminium cladding on buildings in NSW.

The Cladding Taskforce takes fire safety very seriously and has taken a number of actions to support the already stringent laws in NSW. They include:

Identifying aluminium cladding on buildings in NSW, and ensuring affected buildings are safe. The DAC assessment initiated after the Grenfell Tower fire in London in June 2017, together with work undertaken by FRNSW and the DPE, concluded there were 1184 buildings in NSW which possibly have cladding. FRNSW is visiting all of these buildings. As at 7 December 2017, 220 buildings, including 58 high-rise residential buildings, have been confirmed to have cladding in a quantity or configuration which requires further assessment.

FRNSW will be undertaking further work to collect information from building owners whose legal responsibility it is to ensure fire safety. FRNSW is now preparing pre-incident plans for the identified residential high-rises. These plans ensure local firefighters have comprehensive knowledge of these buildings and are well-placed to deal with any incident as quickly and effectively as possible.

FRNSW will soon write to local councils requesting their authorised fire officers to inspect each affected building, and to report back to FRNSW on the outcome of their inspections.

The Cladding Taskforce is also writing to occupants of the buildings that require further assessment to update them on the work being done to ensure the safety of their building. Occupants will continue to be updated by the Cladding Taskforce as it moves through the process of ensuring the fire safety of these buildings.

Noting that the data relied on for the DAC assessment does not contain records of all buildings constructed in NSW, the Taskforce has also overseen the development of a new regulation which will require owners of buildings with combustible external wall cladding to inform the NSW Government and undertake an independent fire safety assessment within set deadlines. The draft Environmental Planning and Assessment Amendment (Identification of Buildings with Combustible Cladding) Regulation 2017 is on exhibition for public comment. Further information can be found at the DPE website http://planspolicies.planning.nsw.gov.au

The introduction of tough new laws contained in the Building Products (Safety) Act 2017, preventing the use of unsafe building products in building and construction, by identifying, restricting and rectifying building products which pose a safety risk in buildings. That Act will also give the Commissioner of Fair Trading the power to require builders and suppliers to provide records regarding where banned products have been used. These new laws come into effect on 18 December 2017.
It is important to remember that just because the buildings requiring further assessment have cladding does not mean that they are unsafe. This is why FRNSW, working within the Cladding Taskforce, is requiring councils to do further inspections.

Building or lot owners who have any doubt about the safety of the cladding on their building should have their building assessed by a qualified fire safety professional.

Concerned tenants should contact their managing agent or landlord to find out what action they are taking.

For more information on cladding and fire safety, visit www.fairtrading.nsw.gov.au.

Source: NSW Fair Trading 21/12/2017

A string of Fairfax Media reports about unscrupulous property developers tearing up off-the-plan sales contracts, only to re-sell apartments for a higher price, has sparked a NSW government investigation.

Despite emergency legislation introduced to stop the so-called practice of “sunset clawbacks”, the government is still concerned the public are being ripped off – and has asked for feedback on a new discussion paper on the subject.

Announcing the move today Minister for Finance, Services and Property Victor Dominello said: “Over the last 10 years, off-the-plan contracts for sale have increased tenfold. They now represent around 11.5 per cent of the residential sale market in NSW.”

“In mid-2015, as the Sydney property market was heating up, reports started to emerge of unscrupulous developers using sunset clauses to rescind purchasers’ contracts en masse only to re-list the same apartments at higher prices.

“In September 2015, the NSW government launched an online survey on off-the-plan sales; 639 responses were received, more than 30 per day during the period the survey was open.”

But now its newly released discussion paper asks whether, two years on, there is a need to further strengthen protections for off-the-plan purchasers, particularly with reports coming to light of developers substantially altering development plans after contracts had been exchanged.

In some cases reported on by Fairfax Media, one-bedroom apartments had become studios, and lot sizes had been reduced substantially so more units could be squeezed onto the site. There have also been complaints about the length of contracts and the one-sided terms that unfairly favour developers.

The minister said that, in the rush to exchange contracts, there was often no time for a purchaser to consider the contract properly and negotiate terms. As a result, the discussion paper “considers these issues and possible reforms in relation to disclosure, standard terms and cooling-off periods to provide more clarity and certainty in the marketplace”, he said.

He’s now invited the public to comment on a variety of topics, including the need for mandatory disclosures in contracts about whether planning approval has been granted, the 10 per cent deposit regime, the ways in which developers might be subverting the new rules on sunset clawbacks and on the power of the Supreme Court in its judgements to award damages.

The peak apartment-owners’ body, the Owners Corporation Network, immediately congratulated the government on the new move.

“OCN commends the Minister for following up on his promise to turn the spotlight on unfair off-the-plan contracts,” said OCN executive officer Karen Stiles. “Consumers are at a distinct disadvantage, and the consequences can be emotionally and financially devastating.”

All submissions from the public must be received by the Office of the Registrar General by Tuesday, January 30, 2018.

Source Sue Williams Domain Reporter Dec 3, 2017

Strata laws require all schemes to review their by-laws by 30 November 2017.

With the deadline fast approaching, now is the time for schemes to organise a meeting of the owners corporation to review their by-laws (if schemes have not already done so since 30 November 2016).

This is a chance for owners to consider whether their existing by-laws are still suitable or if changes are needed to improve the scheme’s operation. Schemes can adopt any or all of the model by-laws, or simply use them as a guide when making by-laws that suit their scheme.

If, as a result of the review, a scheme proposes changes to the by-laws, these must be put to a special resolution vote at a meeting of the owners corporation. The new by-laws must also be registered with the NSW Office of the Registrar General within 6 months after the special resolution has been passed. This can be done by lodging a Consolidation/Change of By-Laws form. Tenants must also be informed of any change in by-laws.

If no changes are needed as a result of the by-law review, nothing further needs to be done.

For more information on by-laws, visit by-laws in your strata scheme page

Source: NSW Fair Trading 15/11/2017

The new strata building bond and inspections scheme is due to start on 1 January 2018.

Under the new scheme, developers of new residential and mixed use high-rise strata developments which are four storeys or higher will be required to lodge a building bond with NSW Fair Trading. The amount secured by a building bond is to be 2% of the contract price for the building work.

Any defective building work identified between 15 and 18 months but not rectified by the builder before the end of 24 months may be rectified using an amount secured by the building bond.

Find out more about the scheme.

Source: NSW Fair Trading 15/11/2017

Conveyancing and Certificate of Titles are transitioning to a paperless system.

By July 2019, all conveyances will need to be done electronically and all Certificates of Title will be converted to e-Titles.

The transition to paperless conveyances will be done in phases, with the next milestone being 1 July 2018. By this date, all stand-alone transfers and caveats, mortgages and discharge of mortgages must be lodged electronically.

For more information on the roll-out of eConveyancing in NSW, visit the NSW Office of the Registrar General website.

Source: NSW Fair Trading 15/11/2017

To prevent children falling from windows, owners corporations must have window safety devices installed on all applicable windows by 13 March 2018 (and cover the costs of installation). This applies to openable windows more than 2m above the outside ground floor and within a child’s reach (less than 1.7m above the inside floor).

The devices must enable the maximum opening to be limited to 12.5cm. However, a device that allows the window to be fully opened, fully closed and also limited to 12.5cm complies with the legislation. As long as the opening can be limited to 12.5cm, complying safety devices include devices attached to a window frame or robust bars, but not lightweight fly screens. When children are in the unit or townhouse, it makes sense to use the devices at all times to prevent falls.

Lot owners may install a window safety device in their property at any time, letting the owners corporation know.

You can find out more about window safety device requirements .

Source – NSW Fair Trading release 20.9.17

A reminder that owners must review their strata scheme by-laws by 30 November 2017. Make sure you are part of the conversations and meetings that could change the by-laws of your strata complex.

Owners should consider which updates would best suit their lifestyles and can use the model by-laws as a guide. Any changes require a special resolution vote at a meeting of the owners corporation and must also be registered with the NSW Office of the Registrar General.

For more information on by-laws, visit by-laws in your strata scheme page.

Source – NSW Fair Trading release 20.9.17

An inter-agency Fire Safety and External Wall Cladding Taskforce (the Taskforce) was established in June this year to develop and implement a co-ordinated, whole of government policy response to the Grenfell fire in London. On 28 July, 2017 the NSW Government announced comprehensive reforms being undertaken to further strengthen the protections in place for fire safety focusing firstly on residential buildings.

If owners and occupants of buildings are concerned about fire safety in their building, they should take action without delay. Residents seeking further information are advised to contact their real estate agent, landlord, building owner or strata manager.

It is recommended that real estate agents, landlords, building owners and strata managers immediately take the following actions:

• identify any buildings that you are responsible for that may have external wall cladding
• review the design, construction and approval documents for the building to determine whether cladding was installed. Seek advice about the suitability of the type of material used and the method of installation
• ensure that the annual fire safety statement for the building is up-to-date and all fire safety maintenance measures have been addressed
• consider engaging a suitable professional to review and inspect the overall fire safety of the building including the installation of any external wall cladding and provide an assessment of any steps required to maintain or improve the building fire safety.

More information about external wall cladding, fire safety and the NSW Government’s priorities is available on our Fire safety and external wall cladding page or download the fact sheet.

Source – NSW Fair Trading release 20.9.17

It is important to note that from 1 October 2017, new laws commence that affect building owners responsible for issuing fire safety statements, including the requirement that fire safety assessments be carried out by a competent fire safety practitioner. An accreditation framework is currently being set up to accredit individuals as competent fire safety practitioners. As it will take some time for the accreditation scheme to become fully operational, the Department of Planning will be issuing interim guidance material to industry about how to select a competent fire safety practitioner. Further information can be found on the Building Fire Safety Regulation fact sheet issued by the Department of Planning and Environment.

Source – NSW Fair Trading release 20.9.17

From 1 July 2017, all residential purchases by investors will be excluded from the 12 month off the plan transfer duty liability deferral.

Purchasers who wish to obtain the deferral will need to declare an intention to occupy the property as their principal place of residence (PPR).

If a purchaser claims an entitlement to the deferral, but the land is not occupied as the purchaser’s PPR for a continuous period of 6 months, commencing no later than 12 months after completion of the sale or transfer, interest and penalty tax may apply from the liability date.

Source – http://www.osr.nsw.gov.au/taxes/transfer-land

The 2016 NSW Budget introduced a 4 per cent surcharge purchaser duty on the purchase of residential real estate by foreign persons from 21 June 2016. The surcharge is in addition to the duty payable on the purchase of residential property.

Foreign persons will no longer be entitled to the 12 month deferral for the payment of stamp duty for off-the-plan purchases of residential property.

This surcharge will also apply to landholder transactions if there is a landholder liability and one or more of the properties owned by the landholder is classified residential and the purchaser is a foreign person who purchases shares or units in the landholder.

From 18 July 2016, the purchaser/transferee declaration must be completed by any person entering into a transaction on or after 21 June 2016, that results in the acquisition of an interest in land in NSW.

(Source – http://osr.nsw.gov.au/taxes/spd)

Effective 1 July 2016, additional information will be required on real property transfers.

In a meeting of the Commonwealth, State and Territory Treasurers, it was agreed to establish a National Register of Foreign Ownership of Land Titles. The register would build on the Commonwealth’s existing National Register of Foreign Ownership of Agricultural Land.

On 30 November 2015, the Federal Government enacted an amendment to Division 396 of Schedule 1 of the Taxation Administration Act 1953 (TAA 1953) to include Subdivision 396-B. The Australian Taxation Office (ATO) administers this legislation. Under this law the Commissioner of Taxation can require certain entities to give information about transactions that could reasonably be expected to have tax consequences for other entities.

As a result, the Office of State Revenue (OSR) will be required to collect and report transfers of freehold or leasehold interests in real property situated in New South Wales to the Commissioner of Taxation from 1 July 2016.

For each transaction, the information collected and reported will include:

• Property details including land title information, property address and other descriptors
• Transactional information including transfer price, contract date and settlement date
• Identity information of the purchaser/transfereeand vendor/transferor including name, address, date of birth for individuals, name, address and ACN/ABN for non-individuals
• Foreign identity details.

The information is proposed to be used by the ATO for the purpose of information-matching and ensuring compliance with the taxation laws of the Commonwealth. In addition, the information (which will include information about the nationality and residency of vendors and purchasers) is to be used for the purposes of a National Register of Foreign Ownership of Land Titles to be administered by the ATO.

Provision of the information to the ATO will be enabled by changes to the Taxation Administration Act 1996 and will extend to various offences provided in the Act to persons who are required to provide the information to OSR.

Vendor/Transferor

Vendor Information will be collected via the Land Tax Certificate Process

An amendment to the Conveyancing (Sale of Land) Regulation 2010 will require the vendor under a contract for the sale of land to provide a current Land Tax Clearance Certificate (section 47 certificate) to the purchaser.

All contracts entered into on or after the 1 July 2016 will require the vendor to provide the purchaser with a current certificate. Vendor information required (where applicable) when completing the application for a Land Tax Clearance Certificate is listed in the Commonwealth Reporting Reference Table.

Online Land Tax Clearance Certificate

All online Land Tax Clearance Certificate requests made by a vendor must be lodged through a Client Service Provider (CSP). Failure to provide this information will result in your Land Tax Clearance Certificate request not being processed.

Lodgement with an Approved Settlement Room

All Land Tax Clearance Certificate requests made by a vendor at an approved settlement room must include the required information. Failure to provide this information will result in your Land Tax Clearance Certificate request not being processed.

Purchaser/Transferee

On or after the 1 July 2016, additional purchaser/transferee information (where applicable) will be required when completing a Duties assessment. This information will be required for all agreements for sale of land and transfers of real property. The Commonwealth Reporting Reference Table outlines the additional purchaser/transferee information required.

Electronic Duties Returns (EDR) requirements

All affected conveyancing transactions available through EDR will require the new information to be entered as part of the assessment. EDR clients must retain certified copies of any documents provided for audit purposes.

Lodgement with an Approved Settlement Room

All affected conveyancing matters presented at an approved settlement room for assessment will require the new information. The evidence required must be originals or certified copies, all original documents will be returned when your matter has been finalised. Failure to provide this information will result in the assessment of your matter being delayed.

(Source – osr.nsw.gov.au/info/commonwealth)

Changes to the law concerning ‘sunset clauses’ for off the plan contracts

“Buying off the plan” refers to buying property in a plan of subdivision that has not been registered, or a unit that has not been built.

Buyers enter into a contract with a developer to buy property in a development which may not be completed for some years.

Marketing and selling property off the plan can enable land to be developed in an efficient, cost-effective way. Buying property in this way can also allow buyers to future-plan their housing. However, there are particular risks in this type of sale.

Contracts between the buyer and seller usually contain a number of conditions. These conditions may outline matters including:

• the agreed time-frame for the developer to complete the project;
• the agreed standards to which the project should be delivered; and/or
• how the contract can be varied or terminated, and by who.

What change has been made to the law? 

The law has been strengthened to help stop developers from unreasonably using sunset clauses, provided in their contracts for off the plan residential property sales, to bring those contracts to an end.

Under the Conveyancing Amendment (Sunset Clauses) Act 2015, a developer that is the vendor under a contract is now required to give notice to each purchaser under the contract, before ending the contract. This notice must state why the developer proposes to end the agreement and give reasons for delay with the project.

For the contract to be terminated, the purchaser would need to agree.

If the purchaser does not agree, and the lot has not been created before the sunset date, then the developer will need to obtain an order from the Supreme Court permitting the contract to be rescinded.

The new legislation will apply to all off the plan contracts that have not been completed – that is, contracts that are still in operation on 2 November 2015; and, also, to any off the plan contracts entered into on or after 2 November 2015.

So, for example, if a developer has sought to use a sunset clause to rescind a contract made on or after 2 November 2015, the contract would attract the protection of the new law and the developer would need to obtain a Supreme Court order to end that contract.

More information is available at www.lpi.nsw.gov.au.

You can also refer to this page for updates on consultations on the laws affecting off the plan sales.

Why was this change needed? 

Amendments to legislation have been passed by the NSW Parliament to protect consumers in response to an emerging concern that certain developers may be terminating contracts specifically for financial gain, through the use of ‘sunset clause’ provisions.

A sunset clause can be used by either party to end the contract, if the project is not completed on time. This clause in a contract can help buyers by giving them the right to end a contract and pursue other property options, if the building project is delayed.

However, some NSW consumers have reportedly had their contracts rescinded by developers using sunset clauses, only for the land or apartment that has been the subject of those contracts to be re-sold shortly after, for a higher price.

In some other instances, developers have used delay with a project to activate the sunset clause.

This practice creates uncertainty and disappointment for would-be buyers, who may have been waiting to settle the purchase for many months or years.

To respond to these concerns, NSW Fair Trading and NSW Land and Property Information (LPI) consulted on the extent of the problem and considered a range of measures to address this issue. Those consultations have resulted in the new legal procedures outlined here and as set out more fully in the Conveyancing Amendment (Sunset Clauses) Act.

(Source http://www.fairtrading.nsw.gov.au)