Proposed safeguards to new RTA amendments beneficial for landlords and victims

By Damian Collins REIWA President   https://reiwa.com.au/

Last December the WA Government announced Cabinet’s decision to amend the Residential Tenancies Act to better support victims of family violence.

REIWA supports the Government’s efforts to amend the Act. Family violence is a growing issue in our community and we all have a responsibility to help eradicate it and ensure measures are put in place to assist victims instead of punish them.

While REIWA is in full support of introducing measures to ensure victims of family violence are not unreasonably affected by the residential tenancy system, we also believe it’s important to ensure safeguards are in place to protect the rights of landlords and property owners from the new legislation being utilised without just cause.

Following collaboration with the WA Government and various stakeholder groups, REIWA has requested and expects to secure essential safeguards which will help victims of family violence remove themselves from unsafe situations more easily, while simultaneously preventing its misuse by people who are not genuine victims of family violence.

We are pleased the WA Government listened to the concerns of the real estate industry and have committed to including a declaration, to be signed by the tenant, in the prescribed forms as part of this Bill. This means in cases where there has been no criminal charges laid, the victim will sign a declaration to reaffirm their claims, removing the need to go to court. This will also assist the prescribed professionals when completing the report in confidence.

The declaration also carries significant penalties should the claimant be found to be making false statements. This will act as a hefty deterrent against the misuse of this legislation, which is designed to ensure only genuine victims of family violence are able to prematurely terminate a residential lease.

This is a strong outcome for both parties and REIWA welcomes this as an important step in the process of reducing the burdens of the residential tenancy system on victims of family violence while also protecting the rights of property owners.

The Residential Tenancies Act (Family Violence) Amendment Bill 2018 is currently before the Legislative Committee who will pass its results to the Upper House on 22nd November 2018, with expectations that the Bill will be introduced by the end of this year.

REIWA recommends that all investment property owners ensure that they are fully aware of the upcoming changes and what it could mean for them. It is also imperative to make sure you discuss your landlord insurance policy with your insurer to see if they caver any loss of rental income, should a family violence situation arise.

Perth rental market experiences notable improvement

Real Estate Sign – For Lease. 2D artwork. Computer design.

By Damian Morris – REIWA President     htpps://reiwa.com.au/

The Perth rental sector is leading the WA property market’s recovery, with REIWA September quarter data showing leasing activity is up, median rents are stable, stock levels have reduced, average leasing times are quicker and the vacancy rates have plummeted to its lowest level in more than four years.

The quarter saw Perth’s median rent remain stable at $350 a week for the sixth straight quarter – the longest stretch of stable rents Perth has experienced since REIWA started capturing data in 2001.

In addition, when we isolate the number of leased properties to just houses (excluding units), Perth’s median house rent actually increased $10 to $360 per week during the quarter which is good news for landlords.

Although overall median rent was stable, there were 105 suburbs across the metro area that experienced an increase in median rent during the September quarter. The five best performers were Kallaroo (up 39.5% to $530pw), City Beach (up 25.9% to $850pw), Gwelup (up 24.5% to $623pw), Cottesloe (up23.5% to $605pw) and Alexander Heights (up 21.9% to $390pw).

We also saw a notable improvement in leasing activity during the quarter, with 13,234 properties leased – a 5.2% increase on the June 2018 quarter.

The five suburbs with the highest volume of properties leased were Perth (346), East Perth (343), Scarborough (319), Baldivis (243) and Maylands (235).

Rental stock in Perth continues to ease, with listings for rent declining 11.9% during the quarter and25.1% compared to last year’s September quarter. This sharp decline can be attributed to leasing activity improving and new dwelling commencements slowing, which has put downward pressure on listing volumes.

Landlords found it quicker to find a tenant during the September quarter, with the average number of days it took to lease their rental reducing to 46 days. This figure is one day faster than the June 2018 quarter and eight days faster than last year’s September quarter.

Finally, Perth’s vacancy rate declined to 3.9% during the quarter – the lowest level Perth has experienced since the March 2014 quarter and below the 10 year average. After enduring a very challenging few years, the results of the September 2018 quarter are very encouraging and should provide landlords and investors with a lot of confidence moving forward.

We appear to be moving towards parity in the Perth rental market. Investors have been inactive in the last few years during the rental downturn, but likely to return to buying now that rental conditions are improving and interest rates remain low.

 

How to navigate a sale by set date

by Damian Collins REIWA President     https://reiwa.com.au/

If you are seriously interested in a property that is for sale by set date, it’s important as a buyer or investor to understand how this sales method works and how to navigate through the process.

A sale by set date is when buyers are given a deadline (usually around four weeks) to submit offers to the selling agent. Once the specified deadline is closed, all offers will be shown to the vendor, who will then choose whether to accept one of the offers, negotiate further on an offer or put the property back on the market.

This is commonly used to gauge levels of interest in a property that’s hard to appraise, or to secure a higher price on a high quality property in a hot market. This type of selling method can be hard to navigate for a buyer, especially when limited (if any) information is given about the asking price or existing offers made on the property.

So, where do you start? First and foremost you need to find out what the property is worth. In many cases, very limited information is available, making it difficult to determine where to begin an offer, which can lead to mistakes such as overpaying for a property.

The key starting point for any buyer should be to assess the property’s actual value. While researching the local market and comparing similar properties will give you a better idea of the property’s general worth, ultimately you need to decide on a price you are comfortable with.

The next step is to establish a strategy. The more aggressive approach, and one favoured by buyers who don’t want to wait until the end-date period, is to put your best offer forward first with a limited time clause. The idea behind this strategy is to encourage the owner into making a faster decision by creating the pressure of a short time frame.

Alternatively, if you are willing to wait until the end of the set date period and negotiate, you may want to speak to the selling agent to assess existing levels of interest in the property. This will ultimately depend on what the selling agent is willing to disclose, but any information you can uncover will be helpful.

If you think there are no existing offers, you may want to wait until the selling agent prices the property after the closure of the end-date sale before placing an offer. Alternatively, if the property is already generating significant interest, it may be time to put your best offer forward.

If you are unsure about how to approach a sale by set date, consider hiring a REIWA buyer’s agent to navigate the process on your behalf. This can be key in helping you get a better deal on the property and, most importantly, avoiding any mistakes that could cost you further, down the line.

Strata reform process will protect property owners

 

by Nick Allingame – UDIA WA President    www.udiawa.com.au

Strata title reform in Western Australia has progressed in recent months, with legislation introduced to state parliament on June 28 and is currently making its way through the parliamentary process.

The reform legislation covers a broad range of strata related issues, with the primary aim to bring WA’s strata regime into the modern age. One aspect of the legislation that has attracted significant attention is in relation to changes around the processes for the termination of schemes.

Some concerns have been raised due to the fact that under the new legislation there is a move away from the requirement for a unanimous resolution of all owners to terminate a scheme.

The new legislation outlines that a scheme with five or more lots will require at least 80% of lots in favour of a termination, and schemes with less than five lots retain the need for unanimous support from lot owners for a termination proposal to proceed.

The new legislation introduces several new safeguards to protect owner’s rights and it is important to understand that the process will be extremely transparent. New safeguards include the need for a detailed proposal to be prepared that will require a full review by the State Administrative Tribunal (SAT). Vulnerable owners will also have access to funding for assistance to respond to the termination proposals including legal advice.

Overall, the SAT must be satisfied across a range of areas with the proposal, including that each owner who objects to the proposal will receive at least fair market value for their property and be no worse off financially. This includes taking into consideration any loss that may occur from removal expenses, conveyancing and legal costs, and capital gains and any other duties.

The section of the legislation that addresses termination of schemes, Part 12, was also recently referred by the Upper House to the Standing Committee on Legislation to undergo even further rigorous review before the legislation is passed.

The Committee considered Part 12 in great detail and, over several weeks, heard a range of evidence from citizens and other stakeholders.

The Committee’s final report back to Parliament notes that having considered the evidence presented, the Committee generally supports the policy behind Part 12 and the process it provides for the termination of strata titles schemes.

The Committee has provided a total of 10 recommendations that it believes will further enhance the safeguards in place for those subject to a termination process. These include a requirement that following the receipt of a full termination proposal, the strata company must refer it to an independent advocate to review the proposal, identify vulnerable owners and provide those owners with additional advice as to their entitlements under the relevant legislation.

Overall, the legislation has undergone rigorous examination to ensure that owners are protected and the reform process should bring very positive outcomes to the strata property sector.