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COMMENTARY www.northsba.com.au WWW.WSBA.COM.AU Reforms to $50B property sector PROPERTY By Victor Dominello NSW Minister for Innovation and Better Regulation THE property industry is worth over $50 billion to the NSW economy. As Minister for Innovation and Better Regulation I am pursuing a range of property and real estate reforms that aim to protect buyers, owners and tenants and enhance the property sector. This is an issue that I take very seriously and in my 14 months in this portfolio I have passed through the NSW Parliament three key reforms that have had an immediate impact on people’s lives and will continue to far into the future. New Underquoting Laws Protecting Consumers The property market is red hot in Sydney and North Sydney is no exception. Buying a property is a life changing decision and it is an incredibly complex process requiring significant time and financial commitment. I wanted to make sure government regulation supported consumers through this process and I worked with industry on amendments to the Property, Stock and Business Agents Act 2002 to strengthen underquoting laws to protect consumers. Since the new laws took effect on 1 January, we’ve seen a significant cultural and behavioural change in the industry. The practice of price baiting, including the use of inducements like “offers above” and “offers over”, has all but evaporated. In March NSW Fair Trading undertook an underquoting compliance blitz across the state. This resulted in $53,900 worth of penalty infringement notices and a further 23 warning letters issued to real estate businesses. The government continues to work with industry groups to ensure the laws continue to benefit consumers. 21st Century Strata Laws Coming Soon The NSW Government recently consulted on the regulations that will accompany the new strata laws that come into effect later this year. These once in a generation reforms are modern and reflect 21st century strata living. By 2040, half of people in NSW will either be living or working in strata and it is important that we have flexible and sensible laws. Over 90 changes were made to the laws including the introduction of a strata defects bond to better protect buyers against building defects; making it easier for owners to complete cosmetic and minor renovations; and new model by-laws for pets and parking. Sun Sets on Rogue Developers In November last year I acted swiftly to protect buyers from rogue developers. Some NSW buyers had reportedly had their contracts rescinded by a developer using the sunset clause, only for the land or apartment to be re-sold the same day for a higher price. The government introduced legislation to make developers seek the consent of the purchase if they wish to rescind on the contract using the sunset clause, and if necessary obtain the leave of the Supreme Court of New South Wales. I am pleased to report that these new laws are working and have stopped rogue developers dead in their tracks. Purchasing a property is a life changing decision and buyers deserve certainty and fairness. It is important that we have a robust property market that adequately balances the protections between sellers, buyers, landlords, agents and tenants. It is to everyone’s benefit that the obligations of everyone involved in the property industry are clearly defined and rigorously defended. I will continue to work in this space and welcome the input of industry and consumers in doing so. Balance between confidence and humility EDUCATION By Dr Nancy Hillier CEO & Principal of Pittwater House School CONFIDENBCE is one of those traits that is essential in developing successful people and building successful and confident adults starts in childhood. In fact, a pilot study at the University of Melbourne found some correlation between confidence levels as early as primary school. Confidence is important as the more self-confidence you are, the more you value yourself and the less self-doubt you have. Essentially, the more self-confidence you have, the more you believe in yourself and this serves as a motivational function by allowing confident people to explore their potential. However the point I wish to stress is that while confidence is important it should never be played-out at the sacrifice of humility. All too often I see confidence prevail at the expense of humility and the end result isn’t positive. How unfortunate is the image from the s porting arena of a player who scores How to practice humility Mother Teresa in her writing ‘The Joy in Loving: A Guide to Daily Living’ shared these few ways that we can practise humility: • To speak as little as possible of one’s self. • To mind one’s own business. • Not to want to manage other people’s affairs. • To accept contradictions and correction cheerfully. • To pass over the mistakes of others. • To accept insults and injuries. • To accept being slighted, forgotten and disliked. • To be kind and gentle even under provocation. • Never to stand on one’s dignity. • To choose always the hardest. that goal and then runs around the ground pointing at themselves and calling attention to their achievement… rather than the humble person in society who is much more likely to be able to see the world through the eyes of others. I take great pleasure in seeing students lead their peers in various situations throughout their school life. Sitting alongside this self-confidence and striving for success is the way we treat others. It was CS Lewis, the author of the Narnia books who said: “Humility is not thinking less of yourself, but thinking of yourself less”. It may be the top athlete who cares little for the medals and trophies but continues to press forward in their desire for success or the outstanding musician who is single-minded in their focus on rehearsals and practice and eschews the acclaim at the end of a solo performance. Both the athlete and the musician are all too aware of their strengths and weaknesses and keenly take on board new ways to achieve their best whilst acknowledging the talents and needs of those around them. How much nicer is it to be around the humble person who is simply nice to be with rather than a boastful, arrogant member of society who is so much more likely to demand constant attention and praise? Humility is a particularly important attribute to possess for students wishing to develop and grow. It is important because remaining humble allows the individual to be open to improvement. No one individual has all the answers, but through suggestions and input from others, the answers can often be more readily found. Furthermore, displaying humility helps reduce conflict and aggression, provides openness for new experiences, increases empathy and compassion toward others and often, as a result, improves relationships. While the benefits of humility are profound, so too are the benefits of confidence. And certainly, I don’t wish to come across as if I’m preaching humility at the consequence of confidence. Confidence truly is a critical trait that is essential in success. As parents and educators, if we can couple confidence with humility, it is a winning combination for young people. At Pittwater House School we find it is a fine balance of building confidence – with humility. On the one hand we want students to appreciate and celebrate a job well done whilst also being aware that others don’t reach these milestones with the same ease. Helping our students have that level of self-awareness and humbleness will assist them in developing a happier and more fulfilling future. www.pittwaterhouse.com.au Clear choice for people in business ELECTION 2016 By Trent Zimmerman Federal Member for North Sydney THE federal election is only weeks away and Australians have a clear choice between the Turnbull team’s plan for jobs and growth and Labor’s antibusiness agenda for higher spending and more tax. Our economic plan will support continued prosperity and growth, giving us the opportunity to invest in critical infrastructure, boost health and education funding and look after the most vulnerable people. It will help create more jobs by successfully transitioning the economy from the resources-led boom to one fuelled by innovation, investment and a more diversified mix of industries. Small businesses are the engine room of our economy and we will back them by reducing their tax rate to 27.5 per cent from 1 July 2016, starting with businesses with turnover less than $10 million. This will deliver benefits to all Australians and it will boost our economy, with a lower tax rate for around 870,000 companies who employ over 3.4 million workers. In my electorate of North Sydney this will mean a reduced tax rate for around 17,928 companies. And over ten years, we will encourage investment and higher-paid jobs by decreasing the tax rate on all companies to 25 per cent by 2026-27. Bill Shorten talks about business as an “us and them” scenario but he misses the point completely, somehow suggesting that business can be detached from the rest of the Australian community. Millions of people work in businesses every day and they are the primary enabler to increasing someone’s prosperity. It is these people who will be the beneficiaries of improved conditions for business and a stronger economy. This has been endorsed by many respected economists. Business Council of Australia chief, Jennifer Westacott, recently said: “Treasury, the IMF and OECD and many of the world’s leading economists all agree that lower business taxes will increase the size of the economy, resulting in higher wages for workers over time.” Unfortunately Labor has been stuck pushing a high spending, high taxing approach, but in the past they have agreed with our approach that a company tax cut is a good thing. In 2010 it was a key plank in their election platform and only last September (22.9.15), Shadow Treasurer, Chris Bowen, addressed a tax reform summit and said: “I would like to see the corporate tax rate come down over time. I have previously said the nation should be aiming for a 25 per cent corporate tax rate.” To put it in perspective, Australia had the 6 th highest company tax rate among the 34 OCED countries in 2015, in comparison, Britain are now moving their rate from 20 per cent to 17 per cent. But our support for small business doesn’t stop there. Since many small businesses are not companies, from 1 July 2016, we will also increase the unincorporated small business tax discount to 8 per cent and extend the threshold from a turnover of $2 million to $5 million. After the initial increase, the discount will be increased in phases to a final discount rate of 16 per cent from 1 July 2026. The government will also increase access to a range of small business tax concessions to more Australian businesses with turnover of less than $10 million. This will enable 31,587 businesses in my North Sydney electorate to access these concessions. We have a strong plan for growth and jobs that centres around incentives for small businesses and hard working families. We will focus on ensuring a sustainable budget by cracking down on multinational tax avoidance, while providing guaranteed funding for health, education and roads. We are a government that backs business. Get in touch with me and my office if you have any questions or if you have something you wish to raise with me. 8 NORTHERN SYDNEY BUSINESS ACCESS JUNE 2016
NEWS Examining the legalities of property contracts CONTRACTS By Anthony J Cordato Property Lawyer & Conveyancer YOU will find many clauses in a NSW property purchase contract, but there is one clause I can guarantee you won’t find - a clause which allows a purchaser to walk away from the Contract if they cannot obtain finance approval to purchase the property. Why not? The conveyancing practice in NSW has always been that once a property contract is exchanged, and the deposit is paid, then it is legally binding – with no ‘escape clauses’. In Queensland it is different. Clause 5 gives a purchaser 21 days to obtain unconditional finance approval for the purchase. If Speaking of Cooling Off Periods, is five days all you can get? The answer is no. While the standard Cooling Off Period in NSW is five business days, it can be extended by agreement. Currently, many purchasers ask for and receive 10 day cooling off periods when signing Contracts. So in a roundabout way, the Cooling Off Period is a legal way that purchasers can use in NSW to tie up a property for five to 10 days until they receive an unconditional loan approval. What about off-the-plan purchasers? They cannot ask for a one or two year cooling off period until the building is built. Off-theplan purchasers can only hope and pray that they can obtain finance approval to pay for the property when the time comes around for settlement. This is a perfect opportunity for the Government to help off-the-plan purchasers. It would not be fair to allow purchasers to walk away from off-the-plan contracts, but it would be fair for the Government to legislate a 28-day minimum period from the date when the plan is registered until they are required to settle, to give enough time to obtain finance approval. At present, property developers are insisting on no more than 14 days, which is simply not enough time. Over to you, Minister for Innovation & Better Regulation, Mr Dominello! You can contact Anthony J Cordato via www.propertyinvestmentlawyer.com.au www.northsba.com.au WWW.WSBA.COM.AU ONLINE ACCESS 24/7 Each edition of NSBA is available for viewing 24/7. Simply visit www.northsba.com.au not, they can terminate the Contract and the deposit is refunded. Without a ‘subject to finance’ clause in the NSW Contract, what can a purchaser do in NSW if they need to sign straight away to not miss out on the property, but need to wait 2 to 3 weeks for their unconditional loan approval? The answer is to use the Cooling Off Period. Cooling Off is legal protection for purchasers under the NSW Conveyancing Law. During a Cooling Off Period, a purchaser can walk away from a legally binding Contract within five business days without needing a reason. If they do, they lose their cooling off deposit, which is 0.25% of the price. To illustrate, a purchaser puts up a cooling off deposit of $1,250 to purchase a property for $500,000. In return, they have a Cooling Off Period of 5 business days to obtain an unconditional loan approval. During that period, the vendor cannot sell to anyone else, but the purchaser can walk away from the contract (the legal term is to rescind). After 5 days, the rest of the deposit is payable if the contract continues. Of course, what is given can also be taken away. Cooling Off Periods are not applicable in two circumstances: the first is when the property is sold at auction or on the day of the auction; the second is when a solicitor or conveyancer signs a section 66W Certificate which removes the Cooling Off Period. NORTHERN SYDNEY BUSINESS ACCESS JUNE 2016 9
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