Is There an Alternative to 26th January?

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In last year’s newsletter on the eve of Australia Day, I posed the question regarding whether there was an alternative date to consider rather than the 26th of January each year for the celebration of our nation. At that time, I could not find any feasible alternative which had any value. The simple principle is that, any date chosen must have historical relevance and historical accuracy.

I’m neither connected or opposed to Australia Day being 26th January each year. What I do see is dissension regarding the date, and most of all a heap of bullshit spoken. Let’s deal with that bullshit!

Persons in favour of the 26th of January as our date of celebration talk about it being the birth of a nation. That in itself is mythical. The 26th of January did not give rise to the birth of a nation, it gave rise to the creation of a convict settlement in Sydney Cove. At best it gave birth to the state of New South Wales.

As history shows, by the 1890’s, Australia had six different colonies, each with separate sovereign governments reporting to England; NSW, VIC, QLD, Central Australia, WA and TAS. These all had separate legislative councils and operated distinctly from each other. In fact, at the turn of the 1890’s, Australia could have ended up six separate nations until Henry Parkes posed the concept of nationhood.

To say that you cannot change a day is also unfounded. Just because we’ve always celebrated Australia Day on the arrival of Captain Arthur Phillip in Sydney Cove, doesn’t mean that better dates can’t be chosen on the calendar. If it is divisive, it should only be allowed to be continually divisive if it has historical truth.

The 26th of January was the birth of NSW. It should be celebrated as that. Interestingly enough, every other state in Australia has its own Foundation or Federation day, leaving NSW to celebrate its Foundation Day with the rest of Australia. The 26th of January should be considered as NSW Settlement Day. It should still be considered significant. It was the start of European arrival in Australia and it led to significant benefits for the country. It may have affected the 300 or so indigenous nations in Australia at the time, but it is still significant.

The indigenous referring to Australia Day as Invasion Day is both divisive and quite frankly untrue. There was no invasion, there was a creation of a settlement of convicts which led to conflict between the parties in Australia. That conflict never entered into a war and to consider that it was an invasion is completely untrue.

Yes, the arrival of Europeans did have significance on the indigenous cultures. In some cases, we have reason to feel regret for the behaviour of our forefathers. This should not derogate from the benefits to the country that European settlement brought to the Australian nation.

The only reason Australia Day should be changed is if there is historical accuracy which gives credit to the change. We believe there is!

In the early 1890s, Henry Parkes organised a number of national conventions to create Australia. New Zealand even attended the first three conventions and then decided to go its own way. ‘In’ referendums ran in 1899 and 1900, there was an agreement to create a Commonwealth Government of Australia and all colonies to join as separate states in that federation.

On the 9th of July 1901, Queen Victoria signed the Australia Constitution Act, giving birth to the Australian nation. The Australian Commonwealth was then created on 9 July 1901. The true birth of a nation happened on 9th July 1901. This has true historical significance and accuracy regarding the birth of a nation.

In America, their national celebration is on 4th July, which was the American Independence Day from Great Britain. We are now seeing some significant parallels between what I am suggesting and what America did do. They didn’t celebrate the landing of the Mayflower as their national day, but their Declaration of Independence.

Should our indigenous have a day? Absolutely! The original people who lived on this land have a right to celebrate their history as much as European arrival in Australia. Why not fully depart from our ties to England and dispense with the Queen’s Birthday? It’s not even her birthday, that’s in April. We have a long weekend called the Queen’s Birthday without any real significance. The indigenous don’t have a date when they arrived in Australia 40,000 years ago. But why not make the June long weekend a celebration of indigenous culture. This is during the footy season, which has already embraced indigenous contribution to the various Australian Football codes.

I’m probably going to be shot for the suggestion because I’ve agreed with neither party as to the keeping or getting rid of the 26th of January Australia Day date. Nevertheless, why not:

  • Make Australia Day 9th July, and call it Federation Day;
  • Make the June long weekend an indigenous celebration; and
  • The 26th of January becomes the celebration of NSW, one which has been sorely missed.

We are one nation of 25 million people. It’s about time we behaved like one, and not servicing just minorities or majorities. In 231 years, we have come further than most nations in that period of time. Why not celebrate everything about Australia in a true historical context.

 

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538

Co-regulation: Fantasy or Reality

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The soap opera that starred Tim McKibbin of the REI and Mat Keene, Minister of Fair Trading, late last year was a plot straight from the Game of Thrones. Two princes of the property industry at loggerheads over policy whereby a pretender was attempting to dethrone the incumbent prince. The pretender being Tim McKibbin and the prince being Matt Keene.

The world outside the real estate industry could not have given the time of day for the debate. The word ‘coregulation’ was familiar to them as a technical term for a plant or some foreign disease. In a marketplace where people are unable to obtain finance, the biggest investments were plummeting in price and the Christmas period drew the focus of the average punter, leaving the debate to the egotistical.

What happened: a discussion paper was published in 2016 that considered the concept of coregulation. Coregulation was industry bodies having shared responsibility for regulation of the industry and monopolising the continuing professional development marketplace. It was essentially a carrot given to peak industry groups to support the reforms. It was founded in the belief that coregulation would create a better consumer market place.

Somewhere in 2018, the likely REI principality became shaky. The governments promise of making REI the governor of the province of real estate became questioned. The concept of coregulation fell off the agenda and caused a rift between REI and the NSW Government.

Minister Keene indicated that it was the government which was best placed to conduct consumer protection. REI struck back by recommending that Fair Trading should no longer administer the industry. It should be some other organisation. The REI took their bat and ball home and had said if we cannot be king, nor should you.

We, for some time, avoided wading into the turbulent waters of coregulation. My personal opinion is that, an industry group which is funded by business can never impartially regulate the industry. I will, however, attempt to traverse the difficult waters of this argument in as simple a manner as I can.

In short, REI wanted to be involved with the coregulation of the industry. They wanted to set the educational standards and ultimately be the licencing body for the industry. They would also take over the role of discipline and leave criminal behaviour to the Office of Fair Trading. The REI would therefore be the licencing and disciplinary authority for the industry.

The Property, Stock and Business Agent’s Act 2002, soon to become the Property and Stock Act 2002, will regulate three industries:
1. Real Estate, which includes business brokers;
2. Strata Management; and
3. Stock and Station.

What we did not understand about the model was whether REI became the governor of all the industry. Hence, they were the licencing and disciplinary authority for all three industries or were we going to have three governors:
• The REI governing real estate and business broking;
• Strata Community Association regulating strata management; and
• The Australian Livestock and Property Institute regulating stock and station.

Obviously the other two peak industry groups would not want the REI to administer all the industry. Hence, if you wanted to hold more than one licence, you would need to contact each of the industries. You would need to be a member of all three groups if you wanted to have each of the licences. Moreover, you would have to comply with each of the codes of conduct, which may not be consistent with each other. In fact, a coordinated approach to education would completely be abandoned, causing absolute confusion in the industry. What you would obtain is a new level of red, green and blue tape to add to the overregulation already in our industry.

The rhetoric around coregulation is that it would create a better industry with higher standards. This is policy mumbo jumbo, it’s never facilitated by reality. No one had been able to indicate why industry regulation would provide better standards than allowing government to regulate the industry.

Let’s have a look at some comparative systems. The legal system is regulated by the Law Society. It is an association of membership which has a monopoly within the legal fraternity. It grants the licences and has the power of discipline. There is an Office of Legal Services Commissioner who also has the power to investigate and discipline those who breach professional standards.

The Law Society is governed by large law firms. The rank and file of the small legal firms throughout the industry are not considered at the top level. When applying for a licence, your application will be placed before the board, where your competitors will determine your future. History has shown that the Law Society has refused to grant people licenses who they consider as not fitting the industry. They may not have done anything wrong, but they don’t fit the category of people that the industry want.

If you ask any solicitor, the Law Society hasn’t represented their interest and believe it is only representing the big end of town. Moreover, the industry is not heard by government.

In 1995, finance brokers licences in NSW were deregulated. The industry was given the right to self-regulate. This gave birth to organisations like the Mortgage Finance Association of Australia (MFAA). You could not work within this industry unless you were an MFAA member and comply with their standards. By 2010, the Commonwealth Government introduced the National Consumer Credit Protection Act which required persons undertaking credit to obtain an Australian Credit Licence. Self-regulation for 15 years was a monumental failure.

Let’s look at the current private certification debacle. In 1992, there was a proposal in the liberal government to introduce private certifiers. Due to the opposition by the then Consumer Affairs Minister Peter Collins, this system did not come to fruition. In 1997, the Carr government then introduced private certification.

Peter Collins was right! If you introduce private certifiers, they can only create a business by serving developers. Once they serve developers, their independence is obliterated. This has been highlighted in the Opal building in Olympic Park. Private certifiers looked after the developer which ultimately did not look after the occupants in the future. Is this the type of industry we want?

Frederick Hilmer, who published a report on National Competition policy indicated that regulations should be there for the purpose of the environment, the economy, safety and the consumer. Can an industry body that represents a trade ever fully represent the consumer? First, it is the government authority vested with the responsibility of regulating a marketplace that only hears all sides of the argument. Secondly, personal interest will always provide a guide for decision making. Regulation should never ever be made that does not protect the consumer or provides an equal playing field for competitors.

It is somewhat fantastic that we even think about the REI as the centralised body. It only holds about 15% of the industry as a member. If you are a member, you’re allowed to display the REI logo in your office. What do you do to get that? Pay a membership fee. When the REI had an opportunity to propose greater standards, they did not. They merely took the money to provide an accreditation which is not demonstrable of a higher standard. Moreover, should an organisation that represents only 15% of the marketplace, now have the ability to control the whole marketplace?

REI is a business. It provides training, superannuation, and other services to the real estate industry. A business should not be put in control of the whole marketplace, because they can only operate to benefit themselves.

The saddest point is that the industry has lost a voice. The REI was introduced in the main part to represent the industry to government. It was there to provide a balance against consumer complaint and unreasonable expectations of the marketplace. It was there to provide us, the industry, with protection against government decision making. If they are the coregulators, they become a pawn of the government and the voice of the industry is lost.

None of us should criticise Tim McKibbin for his campaign to become the Prince of the real estate kingdom nor should we be upset about the REI trying to become the property government. The REI has self-interest, so why not try!

Coregulation: fantasy or reality? It’s a fantasy because coregulation will just mean alternate regulation by an industry body or bodies.

Unfortunately, what will be lost in the debate is Mr McKibbin’s submissions that we should have an industry body that just looks after property. Throughout the 90s, the Office of Real Estate Services and the Real Estate Services Council regulated the industry. I worked on both the inside and outside and would indicate that this was a model which operated. Whether it needs to be a separate office of an individual department is a separate question but an organisation which is dedicated to real estate, strata, stock and station and other aspects of the property industry is necessary within the industry. The issue of consumers in relation to small consumer complaints and motor dealers do not marry with the professional industry. This debate has been lost in the jousting in the game of thrones.

 

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538

2019: The Age of the Entrepreneur

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Richard Branson said in his book, Business Unstripped, that the greatest level of entrepreneurialism he has experienced was in the places where people have nothing. It is from these meagre roots that people find a way, not only to survive, but to achieve great things in their marketplace. We in Australia are far from impoverished or from meagre roots, but we feel that anything other than a perfect economy is something to be depressed about.

The property industry is in a state of flux; there is much to be concerned about and much that can upturn what we have experienced in the past.

• In 2017, the Commonwealth Government amended the Corporations Act 2001 to affect the obligations of financial advisors. This will impinge upon the financial advisors ability to provide advice in relation to investments. They will be required to show a duty of care and due diligence and almost places to high a risk upon a financial planner to provide advice.

• State Governments have hampered international trade by creating a 12% levy on stamp duty for all overseas buyers. In a marketplace where between 5 and 10% of business comes externally to Australia, this is a negative outcome to the industry.

• The marketplace has slowed down and the journalists have loved advertising the difficulties.

• The Property, Stock and Business Agents Act 2002 will be amended to reform the real estate industry. It is designed to be the largest and most radical reform since 1941. The Commonwealth Government is intending to reform mortgage brokers.

• We have a banking Royal Commission and report to follow. The banks have reacted to the Royal Commission by curtailing lending. The State Government has suffered an $8 billion deficit because of properties not being able to settle.

• We have two elections this year. One of those elections will entail a government coming to power which wants to promote the removal of negative gearing.

Yes, there is probably more. Moreover, there is good reason to be concerned and this will lead to many people being depressed about the market. It is true, what was before will not be in the future.

History has shown that difficulties lead to positive outcomes. One should ask themselves where we would be without the first and second world war in relation to sonar, telecommunications, air flight etc. The greatest inventions were made during recessions, not in periods of growth.

This is a year where those who are innovative, entrepreneurial, adaptable, organised and have the ability to develop community that will make the difference. If you hope it will stay the same, 2019 will not be a happy time. If you are a person who can adapt, innovate etc, the world is your oyster.

The property market always adapts and finds a way to recover. This is because of its adaptability and the people within it who will innovate and create new mechanisms to make it work. Leverage is already working with people who have started this innovative approach to business and the property market. Leverage looks forward to the newcomers, the innovators, the disruptors and those who need to adapt their business to cope with a rapidly changing business. Things like e-conveyancing which commences on 1 July 2019, change the marketplace, but will make it more efficient and more accessible for those outside the market. Will the banks stop lending forever? Absolutely not! If they do, they don’t have a business!

2019 should start the age of the entrepreneur. Those with an entrepreneurial spirit and intellect will not only be the ones to survive but the ones that thrive. These difficult times should not be seen as a problem but an opportunity. It is those who can see and grasp those opportunities who will be the ones who continue to grow. As Napoleon Hill said in his book, Think and Grow Rich, “whatever the mind can conceive and believe, it can achieve”.

 

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538

The Year in Transmission

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If 2017 was the year the property boom stopped, 2018 experienced the fall out. So much has happened, and plenty is about to change.

Every client, course participant or business ally has had the same response to 2018: “It hasn’t been bad, but it’s been bloody hard work”. I wonder if this is fair! Maybe it’s normally tough and we have been spoilt by a property boom.

2018 was the year where clearance rates at auctions dropped below 50% and prices took a tumble. This had to be expected. The two drivers of the NSW property market have always been demand and the availability of cash.

The government shut down the competition. Approximately 10% of the property market is always international. All that changes is the nationality. 12% stamp duty and road blocks to immigration and foreign investment, has robbed the market of significant demand. This has now flowed on to other sectors.

Additionally, the credit squeeze had arrived before 2018. If that wasn’t enough, we then welcomed the banking Royal Commission. The banks have now, like a good bear, gone into hibernation. Getting deals across the line has become an absolute nightmare.

Mortgage brokers are leaving the industry in droves or seeking to expand. For the first time, we have given advice on a broker who has been put into liquidation.

The property market is still resilient however. Even with the hurdles, deals are occurring. The carnage expected because of the credit squeeze has not eventuated. Somehow, settlements have occurred without termination. It’s difficult, but as usual, it happens. It never ceases to surprise me how strong and resilient this industry can be.

You can look at change in two ways: it can be depressing, or it opens the door to innovation. Leverage likes this time because it is the moment in the sun for the clever and the innovative.

2018 has seen the emergence of Purple Brick and other similar platforms. Buyers agents have taken a foot hold and is now becoming a chosen profession.

We have also seen the arrival of vendor’s advocates. If you haven’t experienced it yet, wait for it. Vendor’s are hiring people to negotiate everything on their behalf including agent’s commission. Now you’ll have a sales project manager. Yes, it’s for the rich, but that is why the Eastern Suburbs of Sydney is the melting pot of innovation.

For Leverage, the year has been good. We have trained the biggest organisations in real estate, strata and stock and station. We have grown and expanded our influence in the property industry.

In the law firm, we started the year by settling a class action that made $250,000 for each of our client’s. The innovation age has allowed the law firm to grow, creating web portals, setting up innovative businesses, and protecting those unfairly accused. We have established our presence in the finance industry by acting for lenders and aggregators.

2019 will be new. We have new reforms that will change the industry more than anything in the past 70 years. Banks will be bashed, and we have two elections. Maybe it’s time to take a sabbatical if you have a weak heart. At Leverage we will embrace change and intend to be on the front line. We hope many of you are there with us. This is a resilient and strong industry, representing 12.5% of the country’s GDP, and so it will always survive.

I took a sabbatical from our newsletters. I thought you lads and lassies would be over my crap by now. I have been overwhelmed by the call for Leverage Review to return, and I have been ordered by my team to resume the job of talking to you. In 2019, you can look forward to a new innovative newsletter. Maybe, we may let others speak.

I always want to tell a refreshing story at Christmas. Agents are always called tight, but we have always averred the good in the industry. I spoke to a sports club who are struggling to pays the bills. For the past 15 years, one agent, no advertising requested or wanted, has funded this organisation to the value of one million dollars. This is more than a Christmas present. This may be the biggest I know of, but there are so many similar positive stories. My prayer for 2019 is that the REI and Fair Trading recognise these people.

To all of you who make our business, have a joyful Christmas. It’s all about kids, so look after them. For 2019, may the finance gods be with you.

 

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538

Is it better to be infamous or famous?

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Do you know what ‘infamous’ means? It’s about being famous from doing bad things. For example, Ned Kelly is ‘infamous’ not ‘famous’.

Why is it that we remember the people who do bad things and fail to recognise those who do good things? Tell me, who remembers the name of:
• The shooter at port Arthur in 1996;
• The name of the man who carried out the Strathfield massacre;
• The name of the little girl that was kidnapped at Mount Druitt and killed;
• The name of the family whose child was killed by a dingo;
• The name of the head of Al Qaida at the time of the world trade centre terrorist attacks.

You remember most of these names. You will even probably remember names around the matter intimately. Can any of you however remember the name of:?
• The ambulance man who climbed through the hole to look after Stewart Darvis during the avalanche in the snowy mountains;
• The name of the fireman who sat amongst the rubble talking to the woman when the Newcastle workers club collapsed during the 1989 earthquake;
• The name of the helicopter pilot who was involved with the rescue of people from the ocean during the Sydney to Hobart race;
• The name of the last Victoria cross winner in Afghanistan; and
• The name of the leader of the Australians who went over the Kokoda Trial.

Yes, some of you remember one of these names. Many of these names will not even come up under Google. These guys have done wonderful things in their lives. They should be famous, but why are they not.

So the conundrum is, why does one bad act make you recognised but one good act can completely go unnoticed?

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au

Immoral Developments

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Real Estate agents often look bad due to the Vendors they represent. This story is one of greed and one where the agent lost out.

In Curtis Road Kellyville, a Vendor/Developer subdivided land into 15 lots. He sold this land in mid 2013 to a number of mum and dad purchasers. The mums and dads sold their properties so that they could build on the land as soon as they settled on the purchased subdivided property.

The contact of sale had the standard sunset clause. Each party was permitted to rescind the contract if the developer was unable to register the subdivision by 30th of June 2014. The developer was required to use his best endeavours to have the properties registered prior to the sunset clause.

The Vendor/Developer did not obtain registration by the sunset date. Although the DA was approved in 2011, the section 96 amendment was lodged in January 2013 and all works had been completed by 2013, the 30th of June was not met. Ironically, after the enhanced valued in the Hills District in October, November and December 2013, the Vendor/Developer conveniently took 6 months to have the property ready for registration.

On 2nd July 2014, the Vendor/Developer rescinded all contracts except for 2. Based on early estimates, the property value has increased by $80 000 – $100 000. The windfall for the Vendor/Developer is in the vicinity of $1.5 million. The property has returned to the market through Castlehaven Real Estate within 2 weeks of the rescission.

Many of the mum and dad investors may be completely shut out of the market. Those people sold before the increased values in late 2013, and will not have the resources to purchase anywhere else in the market place. One of the consultants put it in a nutshell when he said that “the developer has acted completely immorally”

There are 3 issues here;
1. What can the purchasers do?
2. What’s going to happen to the first agent’s commission?
3. What will the second agents, Castlehaven, have to do when selling the properties?

There is no doubt that, this will create a legal mess. Once the property is registered, all purchasers will lodge a caveat on the property. The vendor has an opportunity to lapse that caveat by giving the purchasers 3 weeks’ notice that the caveat will lapse. The purchasers will then have an opportunity to appear before the Supreme Court to seek specific performance of the contract.

A case called Hall vs. Foster (2012) considered a similar situation. In that case, the vendor was unable to obtain his windfall by rescinding the contract. The court ordered the developer to pay all the increased value to the purchasers.

Purchasers are now joining together to conduct a class action against the developer to either:
• Obtain specific performance of the contract: or
• Cause damaged to be paid by the developer

The first agent is entitled to the commission if their agency agreement has been correctly drafted. The agency agreement should state that “The agent is entitled to commission upon settlement or upon the termination of the contracts of sale.” If this type of clause had been inserted into the agency agreement, the agent is still entitled to the commission.

Finally, what does Castlehaven have to do? The fact that any consequential sale may be held up based on a court action, must be considered a material fact. Material fact is set out in Hinton vs. Commissioner of Fair Trading (2005) defining material fact means something that is “significant or relevant.” The upshot of the Hinton case was that section 52 of the Property, Stock and Business Agents Act 2002 requires an agent to disclose anything with a significant relevance to the perspective purchaser. Castlehaven will therefore be required to disclose to all perspective purchasers to possible delays and the possibility of the sale not being achieved.

The Vendor/Developer’s action will and has caused problems for the purchasers, the first agent and the second agent. Presently, it appears that all those parties have acted appropriately and will continue to act appropriately. Agents need to be papered in relation to their agency agreements and their disclosure so they do not face business, legal or personal risk.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538

Q&A Is the front door common property or the responsibility of the lot owner?

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Who is responsible for repairs to the front door of the unit? Is permission needed to install deadlocks? Leanne Habib, Premium Strata provides the following response.

Question: Is the front door common property or the responsibility of the owner? Do lot owners need to seek permission to install deadlocks?

I am the Secretary of an owners corporation and we are wondering, is the front door common property or the responsibility of the lot owner.
I have seen an opinion from an NSW solicitor on your site but some of the contributors to that discussion raised more questions than there were answers.

Some questions I have around front door onwership and resposibility in strata:

1. Does the owners corporation need to provide permission to an owner who wishes to install deadlocks?
2. Can strata impose a special locking system on all owners?
3. Is the Committee entitled to retain a key to all front doors (something which does not appear sensible)?
4. Who looks after the painting of the inside of the door?

There is nothing in our bylaws about ownership of front doors.

Currently, we have a situation where a front door was damaged as a result of an attempted break-in but we have several older cases where the locks or the doors have become damaged or faulty and we have always stated the owner is responsible.

Your advice and clarification would be greatly appreciated.

Answer: Subject to any notations on the strata plan and applicable by-laws, a front entrance door is common property.

Subject to any notations on the strata plan and applicable by-laws, a front entrance door is common property.

As front doors are “fire-doors” for fire safety, the installation of additional deadlocks, peep-holes etc can adversely affect the fire safety of the door and result in the Owners Corporation not being able to obtain annual fire certification. Any work which detrimentally affects the fire safety of a building requires the passing of a by-law under the new strata legislation.

In relation to an owners corporation imposing a type of locking system, generally, this would require the passing of a by-law.

Painting of the inside of the front door is an individual owner’s responsibility because it’s part of the cubic lot space of the unit (generally speaking).

If you refer to the common property memorandum on the NSW Fair Trading website (which must be adopted to apply to any particular scheme), original and replacement locks and any automatic closers etc form part of the common property.

This article has been republished with permission from the author and first appeared on the LookUpStrata website.

Q&A Charging lot owners who use the visitor parking spaces

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The following questions about visitor parking spaces have been received into the site. Leanne Habib, Premium Strata provides the following response.

Question: Some residents in our building use the visitor parking spaces as an additional parking spot. Is it possible to increase levies for these few residents and not all lot owners?

My inquiry is in relation to a small-sized strata plan in NSW with most lots being owner-occupied.

There are 5 visitor parking spaces on common property which is mostly occupied by the residents – both owners (who are also strata committee members) & tenants.

One owner (a strata committee members) feels this isn’t right as their visitors and other residents do not get to use the visitor parking spaces as, by the time they are home from work, all visitor spots are taken by other residents.

Please note that all lots have their own individual parking, but due to having multiple vehicles they utilise visitor parking spaces if empty.

The concerned owner has complained to our Strata manager and put a proposal to the strata committee. Regarding the proposal, most members responded that they would rather use the visitor parking spaces to park their vehicles inside their building at night after work, rather than park on the street and leave the visitor parking spaces empty as, during weekdays, visitors to the building are minimal.

However, this one owner feels that in doing so they are being unfair to other residents and their visitors. They recommend an increase in levies for those residents who want to use the visitor parking spaces.

As levies are paid according to unit entitlements, is it possible to increase levies for a few and not all? This owner keeps insisting that it is not fair that they all are paying the same levies and other residents get to use common property more. They recommend that they pay less levies compared to others or they pay some sort of parking fee for using visitor parking spaces.
Most committee members are against this idea of a parking fee and would also prefer not to pass a by-law for ‘exclusive use’ of visitor parking spaces as the spots are being used as and when available by all residents.

Please advise if such an arrangement can be made where those residents who frequently use visitor parking spaces pay some additional amount to their strata levy.

Answer: First you need to ascertain from the development consent for the building exactly how many visitor parking spaces are required by law.

Before answering the question on whether such an arrangement would be legal, you would need to ascertain from the development consent for the building (available from Council) exactly how many visitor parking spaces are required by law.

Visitor car parks are to be used for bona fide purposes, therefore, charging residents for a contrary use would not be recommended.

The scheme could, however, apply to modify the council conditions and, subject to consent, convert some of the spaces to common property parking spaces and then licence, lease or otherwise charge fees for use (or give exclusive use which they are resisting) (rather than increasing levies).

Subject to council consent, you could also apply to convert them to individual lot property and sell off any extra spaces for valuable consideration (to be paid to the owners corporation). This will require a subdivision of the strata plan.

This post appears in Strata News #205.

This article has been republished with permission from the author and first appeared on the LookUpStrata website.

Turnbull or Morrison

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Last week the office of Prime Minister received another stake in the heart. Eighty-five people were able to sit down in a room and re-elect the Prime Minister. These eighty-five people are considered to represent the 24 million people in Australia. They themselves felt that they were more positioned to know who the Prime Minister should be than Australia.

I should have wept tears of blood considering my feelings about respecting the office of Prime Minister. Whoever is there should be respected as our leader. They deserve some respect and support for doing what they’ve done.

Regrettably, I felt no tears for Malcolm Turnbull. What happened to him was exactly what he did to his predecessor Tony Abbott. Therefore, one should live by the sword that one draws.

The Australian people are fed up with it because it has now happened to us four times in the last ten years. Julia stabbed Kevin. Kevin stabbed Julia. Malcolm stabbed Tony. And Dutton stabbed Turnbull. The only saving grace for Australia is that the Brutus this time around will not be the new Prime Minister.

Scott Morrison was not the architect of the Prime Ministerial coup. All he did was stand for the head of the Liberal party when the position became vacant. Mr Morrison has had a foot in both camps of this Liberal government and hopefully he can draw both camps together. He has handed out an olive branch to the previous Prime Minister, Mr Abbott, to become the indigenous envoy. It is a starting point for them to bridge the gap between the factions within the group.

Unfortunately, this is not the first time this has happened. We still think that the last ten years is the only time that Prime Ministers have come to power based from attacks within their government. This is not true; Paul Keating came to power against Bob Hawke by undertaking a coup from the back bench when Bob sacked him as treasurer. Malcolm Fraser resigned as defence minister in 1970 as a means of bringing down Bob Gordon and bringing Billy McMahon to power. There are many other examples of this in our history.

As a side note, we should look to Peter Costello for his dignity. Like Keating, he had been promised that he would have his opportunity to be Prime Minister by his leader, John Howard. When Bob Hawke reneged on his agreement, Paul Keating mounted a coup under a Westminster system. When John Howard reneged, Peter Costello went to the election as the treasurer backing both the Liberal government and his Prime Minister.

Our Australian Constitution Westminster system allows for the few to change Prime Ministers at their whim. Without a referendum, we cannot change this habit. Unfortunately, we rely on the dignity of a few, like Peter Costello, to ensure that the highest office in the land is respected.

Let’s hope that the week that was isn’t the future that is! Let’s hope Scott Morrison can provide us with a direction and a group of people who are willing to govern for Australia and not politic itself.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au

The Lending Conundrum

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I’ve discovered a recent conundrum with the lending market for self-employed persons. We all know that the lending market has dried up, which is strangling the property industry. McDonald Jones Homes has indicated that they have had no sales in the past month, purely based on lending.

At one time in history, people started businesses to create wealth. There is a saying that, “no one gets rich by working for another.” This does not ring true when you look at executives in the banks and many of the blue chip companies around Australia. Even Australia Post’s CEO was on a salary $5.6 million. Yes, you can get rich by working for another!

The lenders have now determined to demonise self-employed persons. Meaning many create such a high bar for self-employed persons that it is better to just rent. Moreover, if you are self-employed and need to apply for a low doc loan, you will pay a premium for being lent some money. It is confounding that a lender is willing to accept three payslips from an employee to approve a loan but may not lend to the employer at all.

I recently saw some people pooling their money to purchase a unit. One of the buyers was the boss of one of the others. The vendor had no problems with the payslips issued by the employer to assess the person’s ability to repay the loan. Interestingly enough, the company who issued that payslips was not considered on the same basis. In fact, they were required to pay a higher rate and their income was not accepted.

The brokers and institutions involved indicated that a business can go broke at any time. I laughed, if the business went broke, the payslips be useless. Talk about ticking boxes! Provided you fit into a box you get a loan. It’s not about the banks protection, it’s about the customer’s complying with some guideline put out by APRA or ASIC.

Some people might say that is only small businesses that can fail. Well, your job can be very quickly extinguished. A pay slip does not indicate that you are a high performer and does not look behind it to see if your performance reviews are indicating that you stand to lose the job. Additionally, working for big organisations doesn’t help. Ask people who are working for the banks how they now feel about their job security. I once worked for the government and since 1983, Australia has made smaller and smaller governments, so employment is not secure there either.

Things like payment history, payment of rent and longevity in business, are just a few common sense principles which banks could apply when giving out a loan. Those who are striving for success in their own businesses can’t receive the fruits of their labour. Those employees who benefit from that success can achieve their outcome.

It’s a weird world and it is just too hard to fathom.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au