Real Estate Journal

November/December 2017 edition

Lobbying on behalf of members about the issues that matter is at the core of REINSW's value proposition - and 2017 has been a defining year. Here's what we've been focused on over the last 12 months.

By Cath Dickinson

OUR APPROACH TO LOBBYING

As the peak industry body for real estate in NSW, it’s critical that we’re clear about what we’re trying to achieve. That’s why our approach to lobbying is firmly focused on collaboration and influence.
     
 

Collaboration 

  • We actively consult with members at every opportunity to ensure buy-in and engagement on all issues.
  • We encourage all industry stakeholders to contribute to our policy agenda as a means of bringing the industry together.
  • We demonstrate how our policy agenda benefits all parties, including our members, the wider industry and the community.

  • We broadly and proudly promote our policy agenda, so our position is well understood.

Influence

  • We act collectively, so we can leverage the power of our industry as a whole.

  • We proactively participate in policy discussions with government and propose meaningful and workable solutions.

  • We leverage the power of our knowledge, reputation and influence to achieve the best outcomes.

  • We seek to build strong relationships with all stakeholders to enhance the effectiveness of our lobbying efforts.

  • We continuously work to improve our status as an influential lobbying group.
  
     
     
 

Professional issues


Education standards

GOAL:To increase qualification and education requirements across the industry.


PROGRESS: Improving the standard of real estate practice through better education, robust licensing requirements and targeted ongoing training has been high on REINSW’s lobbying agenda for many years.

In late 2015, the NSW Government commissioned an independent panel to perform a review of existing training standards. In its submission to the review, REINSW strongly advocated for a range of reforms aimed at substantially improving the education standards of agents in NSW.

In November 2016, the government announced a reform package incorporating many of our recommended changes. Since then, REINSW has been working closely with the government to ensure the reform package meets the needs of all stakeholders.

The reforms will apply to new industry entrants and new licence applicants. Grandfathering arrangements will be put in place for existing Certificate holders and Licensees, and for Licensees acting as a Licensee-in-charge. The reforms will be introduced over a period of time to allow the industry to adjust to the new arrangements.

Certificate of Registration


New entrants to the industry will be required to complete seven units of competence (up from the current requirement of four units) to obtain their Certificate of Registration.

The activities that Certificate holders are able to undertake will be specified, placing greater emphasis on the responsibility of the Licensee-in-charge to ensure proper supervision. For example, Certificate holders will not be able to enter into contracts on behalf of the agency or authorise trust account transactions.

Licence

In order to obtain a Licence, agents will be required to complete the appropriate Certificate IV qualification from the Property Services Training Package, along with at least 12 months’ practical experience.

The activities that licence holders are able to undertake will be specified, placing greater emphasis on the responsibility of the Licensee-in-charge to ensure proper supervision. For example, prohibiting licence holders from authorising trust account transactions.

Licensee-in-charge

A new licence category will be created – Licensee-in-charge

To become a Licensee-in-charge, an agent will need to complete a Diploma level qualification from the Property Services Training Package (or a Certificate IV in Property Services and an equivalent qualification in business management) and at least two years’ experience within a licensed business.

CPD

Annual CPD for Certificate holders will be comprised of competency units from a Certificate IV qualification from the Property Services Training Package until the qualification is completed.

Annual CPD for Licence holders and Licensees-in-charge will increase from four hours to six hours. The six hours CPD will comprise three hours of compulsory topics and three hours of elective topics.

Licensees-in-charge will also be required to complete an additional three hours of CPD focused on business skills.

Professional standards


GOAL: To raise the level of professionalism across the industry.

PROGRESS: The word “profession” means different things to different people. But at its core, it’s an indicator of trust and expertise.

The Professional Standards Councils (PSC), with its agency the Professional Standards Authority, is the independent statutory body responsible for promoting professional standards. They use the 5 Es to define the elements that are necessary to qualify as a profession: ethics, education, experience, examination and entity. On our pathway to professionalism, we need to demonstrate that we not only meet but exceed the required standard in each of these areas.

But REINSW believes that we need to add another E to our journey – evolution. If real estate agents are to be recognised as professionals, then along with the 5 Es we must also embrace the reality that our industry must evolve.

Over the last 12 months, REINSW has been focused on driving the evolution of our industry and has worked closely with members to start putting frameworks in place so we can achieve the standards set down by the PSC. At every opportunity, we’ve presented the professionalism concept to agents, including more than 20 Roadshow events, the inaugural Think Tank, the annual Industry Summit and at countless Chapter Committee meetings, one-on-one meetings and other opportunities wherever they arise.

REINSW is extremely proud to have been at the forefront of this monumental change for our industry and is now working closely with REIA to apply for a national Professional Standards Scheme. 		 
     
     
 

Regulatory issues


Residential Tenancies Act review
The residential property market in NSW is entering a new era. There are now more than 820,000 residential rental households across the state, and demand for quality rental accommodation is set to rise over the coming years as more and more people move to NSW.

Landlords, tenants and property managers need residential tenancy laws that respond to the market’s contemporary needs and strike a balance between flexibility and certainty.

The mandated five-year statutory review of the Residential Tenancies Act 2010 kicked off in June 2015, with NSW Fair Trading completing the review and releasing its recommendations for amendments to the Act in June 2016. Areas recommended for amendment were wide-ranging including pre-tenancy disclosure requirements, responsibility for the payment of water and utility charges, calculation of break fees, electronic service of notices and much more.

PROGRESS: In June 2015, knowing that the mandated five-year statutory review was approaching, the REINSW Property Management Chapter committee formed a dedicated sub-committee. Together with REINSW, this sub-committee has worked tirelessly over the last two and a half years to help shape any future legislative framework.

Since the release of the recommendations, REINSW has lodged four written submissions. We’ve also has met regularly with government officials to discuss the proposed amendments with a view to ensuring the Draft Bill reflects a fair balance between the interests of landlords, tenants, agents and the market.

Each version of the Draft Bill has been provided to REINSW on a ‘Cabinet-in-Confidence’ basis. Therefore, REINSW has not yet been able to share details of any proposed reforms set out in the Draft Bill or our submissions in response. As soon as this confidentiality is lifted, details will be shared with members on the REINSW website.

The Bill is expected to be presented to Parliament next year.

Timeline to residential tenancies reform

NOTE: The following is an updated version of the timeline that appeared on page 21 of the July/August 2017 edition.

June 2015 REINSW forms statutory review sub-committee

October 2015 NSW Fair Trading releases Discussion Paper.

January 2016 REINSW lodges submission in response to Discussion Paper.

June 2016 NSW Fair Trading releases recommendations.

January 2017 REINSW submits Position Paper in response to recommendations.

April 2017 NSW Fair Trading provides Draft Bill to REINSW “in confidence”. REINSW lodges submission in response and subsequently meets with Fair Trading policy advisors to discuss key issues.

June 2017 NSW Fair Trading provides second Draft Bill to REINSW “in confidence”. REINSW lodges submission in response and subsequently meets with Fair Trading policy advisors to discuss key issues.

August 2017 NSW Fair Trading provides third Draft Bill to REINSW “in confidence”. REINSW lodges submission in response.

November 2017 REINSW meets with NSW Fair Trading policy advisors to discuss key issues ahead of release of a further version of the Draft Bill. REINSW lodges another submission in response.

FIND OUT MORE ABOUT RESIDENTIAL TENANCIES REFORM on reinsw.com.au/RTAreview

Short-term holiday letting reform

With the release of the Short-term Holiday Letting in NSW Options Paper by the NSW Government in July 2017, the NSW Government signaled its intention to crack down on a sector that has been growing rapidly and shows no signs of slowing down. The emergence of online booking providers has made it easier than ever before to book and pay for stays in private properties, and the development of the sharing economy has seen people become more willing to open the doors of their homes to strangers.

But, like many sectors impacted by technological disruption, regulation has not kept pace with the evolution and growth of short-term holiday letting. Regulation of the sector across New South Wales has lagged and can be described as piecemeal at best, with local councils taking different approaches to regulate the activity within their jurisdictions. With no standardised approach to short-term holiday letting, confusion often reigns.

REINSW applauds the NSW Government’s initiative in seeking industry and stakeholder input to create a robust and workable framework for this sector, which is one that will only continue to grow into the future. Such a framework will provide greater clarity and guidance for all stakeholders, and will ensure the economic benefits of the sector continue to flow while also managing the social and environmental impacts.

PROGRESS: REINSW lodged a comprehensive submission in response to the Options Paper. Due to the expert input of members specialising in the short-term holiday letting sector (including property managers and strata managers), the submission not only addressed the specific points set out in the Options Paper, but went much further. It provided the government with a detailed account of changes to the regulatory framework that should be considered to ensure fair and equitable outcomes for participants in the sector.

This is the just the first stage of what will no doubt be a long road to securing effective reform. But REINSW is committed to working closely with the government, industry associations, online booking providers and the wider community to create a better regulatory framework for the sector.

READ THE FULL SUBMISSION on reinsw.com.au/submissions

Retail leases

Bringing about a standard retail lease for strip shops has been on REINSW’s lobbying agenda for a number of years. Similar to the standard Residential Tenancy Agreement provided for in the Residential Tenancies Act 2010, a standard retail lease would streamline processes, allow leases to be entered into on the spot and make dispute resolution easier.

After much consultation with REINSW and other stakeholders, the government announced amendments to the Retail Leases Act 1994 in November 2016. The stated aims of the amendments were to increase transparency, improve protections and enhance operational efficiency.

OUTCOME: The amendments to the Retail Leases Act commenced operation on 1 July 2017. REINSW strongly believes that the retail leasing industry and small businesses throughout NSW have been let down by the government’s failure to introduce a standard retail lease for strip shops. If retail leasing had gone this way, the retail sector would have enjoyed huge economies and efficiencies. Instead, leaving this out of the reforms is an opportunity lost.

Not to be defeated, REINSW will continue to lobby for this important reform.

Fire and Emergency Services Levy


OUTCOME: The NSW Government delayed introducing the FESL indefinitely after REINSW raised concerns that small and medium businesses might face an “unreasonable burden”

The new FESL was to be based on the unimproved value of property, which has nothing to do with the cost of running emergency services, as opposed to the current levy being based on the replacement value of the structure. The levy would have left a large number of households worse off, as well as commercial and industrial business.

REINSW lobbied hard on this issue and it’s great to see the government listened to us.

The NSW Government had planned to abolish the current Fire and Emergency Services Levy (FESL) (added to home building, contents and some motor vehicle insurance premiums) on 1 July 2017. Under the new FESL, the state’s firefighters and the State Emergency Service was to be funded through a property-based levy.

Planning reforms

Reform of the NSW planning system has long been on REINSW’s lobbying agenda. Planning processes are currently convoluted. The development approval system in NSW can only be described as “not yes”, “not no”, but “maybe” – which is expensive, to say the least.

Requirements also differ from one council to the next, which only adds to the length of the process and the unnecessary expense.

PROGRESS: In a move welcomed by REINSW, the NSW Government released proposals for planning reform in January 2017. The proposed reforms are a good first step to improving the process, but there’s still ample opportunity for further significant improvements.

Councils need to provide certainty when it comes to development applications. If it’s a “yes”, it needs to be clear and unequivocal. And if it’s a “no”, it also needs to be clear so people can learn from the process and don’t pursue approval in the future when it’s unlikely to be granted.

REINSW will continue to work with the government to ensure any planning reform plays an essential role in providing the right type of housing supply and will help reduce costs.

  • Consumer law – Addressing the discrepancies between the Australian Consumer Law and the Property, Stock and Business Agents Act (specifically in relation to underquoting, material fact and vendor referral websites).

  • Electronic signatures – Providing clarity for agents about when they can and can’t use electronic signatures on real estate forms and agreements.

  • Longer-term tenancies – REINSW proposed a model for longer fixed term tenancies in response to recommended changes as part of the Residential Tenancies Act 2010 statutory review and attended a roundtable discussion with NSW Fair Trading to discuss the issues.

  • Strata reform – Providing clarity for agents about how the new strata framework impacts them and how to best implement reforms.

  • Taxation – Encouraging a sensible debate in relation to the reform of state property taxes (including stamp duty and land tax) that are narrow-based and discriminatory, and have an adverse impact on the property market and health of the NSW economy.

  • Underquoting – Seeking further clarity for agents about how to implement underquoting laws without creating a massive compliance burden.

  • Window safety devices – Seeking clarity regarding the implementation of window safety devices in strata buildings. love homes and I love helping people, so real estate combines these two things really well for me,” he explained.
  
     

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