The Estate Agent - March 2018

The journal of the real estate institute of victoria

reiv.com.au

Policy update Reforms a danger to landlords MEMBER milestones Industry leaders make their mark

The Estate Agent

march 2018 Volume 83 No.1

Fringe boom fuels growth Outer suburbs lead the way

Best of the best Industry leaders gather to celebrate high achievers at our annual awards

Under the hammer

Auctioneering talent on show

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Contents

14 ‘Being acknowledged by a panel of independent judges is a real honour and all finalists should be proud of their accomplishments’ REIV CEO Gil King

Cover story best of the best Annual REIV Awards for Excellence celebrate top-performing individuals and agencies

Features

20 22 26 31 34

Auctioneering talent on display Victoria’s auctioneering ability reached new heights in 2017 and has school leavers considering a career in real estate

Proposed reforms pose a danger to landlords REIV to take battle to Parliament to protect against erosion of safeguards and security

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22

Selling in a controversial development Finding the balance when dealing with potential sellers concerned about rapid change

Landlords face land tax sting in court decision Warehouse and logistics ruling could see many tenants pursue recovery of land tax through landlords

Troy carries on the family bloodline Troy Guthrie left a retail career to join his mum at a start-up agency where his hard work has paid dividends

26 The Estate Agent ❘ March 2018

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Contents

5 President’s Report 7

CEO Report

9 Bulletin 11 Events Calendar 12 Market Update 24 Profile 28 Member News 32 Tax 33 Training

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36 Best Practice 38 Vale

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12

36 24

EA

Publisher REIV 335 Camberwell Rd, Camberwell, Victoria 3124 Editor Emma Burton eburton@reiv.com.au

Advertising Sarika Bhalla sbhalla@reiv.com.au 03 9205 6696

The Estate Agent

Estate Agent is published by the Real Estate Institute of Victoria.

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The Estate Agent â?˜ March 2018

The views and opinions expressed in articles and columns of Estate Agent are those of the writers and do not necessarily represent those of the Real Estate Institute of Victoria

President’s Report Richard Simpson President REIV

Onwards and upwards as we work to build on the momentum of 2017

Honoured: Auctioneers Peter Hawkins (Honorary Life Membership) and Adrian Butera (REIV’s President’s Award) were recognised for their contribution to the Institute.

T

he 2017 property market resembled 2015 in many ways: a buoyant auction market with volumes and sales at record highs, significant price growth across the city and increased industry scrutiny.

Auction activity remained high throughout December with a record 4377 homes going to auction – one of a remarkable 25 auction records broken in 2017. However, increased supply and reduced market participation from investors saw the weekly clearance rate in December drop below 70 per cent for the first time in a staggering 70 weeks. The 2017 auction market surpassed 2015 with more homes going to auction (44,733) and selling under the hammer (33,451) than ever before. The city’s outer suburbs were a key contributor with auction volumes up 35 per cent on 2016 figures while the number of auction

sales increased 39 per cent over the same period. Given increased buyer demand and competition for homes in these suburbs, auction volumes in the outer ring are likely to increase further in 2018.

The 2017 auction market surpassed 2015 with more homes going to auction (44,733) and selling under the hammer (33,451) than ever before While new first homebuyer stamp duty concessions skewed the citywide median house price in both the June and September quarters, values increased a significant 13.2 per cent over the year to a citywide median house price of $821,000. Price growth

was widespread across the city in 2017 with double-digit increases recorded for houses in all three metropolitan zones. Regional Victoria also experienced its strongest property market in recent years with house prices increasing 10 per cent over the year to a record high $396,500.

Greater Geelong and towns within commuting distance of the city were the main growth drivers in 2017 with house prices now on par with those in Melbourne’s outer ring.

In addition to a big year for the property market, 2017 was also an eventful one for our Institute. Conduct of estate agents and reform of key property legislation were high on the Government’s agenda, requiring substantial input from our advocacy team. As 2018 is an election year for the Victorian Labor Government; Continued on page 6

The Estate Agent ❘ March 2018

5

President’s Report

Continued from page 5

proposed changes to the Residential Tenancies Act (RTA) are expected to be an important election issue.

Last year also saw the appointment of three new Directors to the REIV Board with Lee Maher (Oak Estate Agents), Adam Docking (M J Docking & Associates) and Frank Hellier (Barry Plant Mordialloc) joining in October.

Leah Calnan from Metro Property Management was also reappointed as a Director for a second term.

It is a great honour to be elected REIV President and I look forward to leading the Institute in the coming year. I am a fifth generation real estate agent with a long history of involvement with the REIV, particularly with the Commercial & Industrial Chapter. Both my father and grandfather have previously served as REIV President. Robyn Waters will serve as Senior Vice President and Leah Calnan as Vice President.

I have confidence that the knowledge and expertise of the current Board of Directors will ensure that the REIV

Driving force: Melbourne’s outer suburbs were a key contributor with auction volumes up 35 per cent.

continues to effectively advocate and represent members and their interests at all levels of Government.

I would like to take this opportunity to recognise outgoing directors Joseph Walton and Gavan Lethlean. REIV immediate Past President Joseph Walton has made a significant contribution to the Institute, tactfully and expertly leading the REIV through a period of considerable change both within the organisation and the real estate profession, including overseeing the appointment of our new CEO Gil

King. Meanwhile, long-standing REIV Director Gavan Lethlean retired from the Board in October after serving the maximum nine-year term. Gavan’s involvement with the REIV over the past decade should be commended, and I thank him for his considerable input.

Increasing professional standards remains a core function of the REIV, with the Institute’s annual Awards for Excellence recognising agents who achieved exceptional results for their clients in 2017. Held late last year, it was a privilege to present experienced auctioneer and trainer Peter Hawkins with Honorary Life Membership. Peter is a deserving recipient of this award, serving the maximum nine-year term on the REIV Board as well as being instrumental in the development of the REIV’s auction competitions.

Fellow auctioneer Adrian Butera was awarded the REIV’s President’s Award.

Congratulations to all finalists and winners on your achievements in the past year and I look forward to an exciting year ahead.

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The Estate Agent ❘ March 2018

REIV 1

CEO Report Gil King CEO REIV

Keeping our eyes on the prize in an ever-changing landscape

I

t would be an understatement to call 2017 a big year for the real estate industry. It was a game changer.

New price quoting legislation was introduced, with the provision of a Statement of Information for all residential property significantly increasing transparency and levelling the playing field for buyers. Meanwhile, the regulator took the stick approach for incidences of underquoting prior to its introduction with more than $1 million in fines handed out in December alone. As underquoting is likely to remain a key focus for Consumer Affairs Victoria (CAV) in 2018, members must ensure they comply with the new price quoting legislation.

Last year also saw the State Government announce significant reform of the Residential Tenancies Act, which will undoubtedly imbalance the rental market. All 14 proposed changes favour tenants and include further reducing a landlord’s right to end a tenancy, minor property modifications without landlord consent and property owners being unable to unreasonably refuse consent to pets. The timing of the announcement coincided with the Northcote by-election, where around 40 per cent of residents are renters.

The REIV responded strongly to these proposals – which had been announced without prior consultation with the Institute – in both the media and in our discussions with Government. The Institute has created an online petition opposing these changes, which has already been signed by more than 11,000 people. Given announced reforms are proposals only at this stage with no draft legislation, I strongly encourage all members to sign this petition. I also urge property managers to distribute it to your landlord clients, as it will later be raised in State Parliament by the Shadow Minister for Consumer Affairs, Heidi Victoria.

Rental market imbalance: Residential Tenancies Act undergoes significant reform, with changes set to favour tenants.

Changes to land tax valuations, the introduction of a Vacant Residential Property Tax (VRPT) and removed stamp duty concessions also impacted

The REIV responded strongly to these proposals in both the media and in our discussions with Government the investor sector in 2017. While the VRPT only came into effect on 1 January 2018, the tax relates to vacancy in the previous year and is likely to catch a number of property owners by surprise.

The legislative environment is

expected to change further this year with ongoing reviews of the Sale of Land Act 1962, the Estate Agents Act 1980, Owners’ Corporation Act 2006 and Conveyancers Act 2006.

As Options Papers for these reviews were completed in early-mid 2017, draft legislation is expected early this year. The REIV has also provided input into the remake of the Estate Agents Regulations 2008, which are due to sunset in May. The REIV is also working with Government on energy efficiency, particularly in the rental market. While the Institute has opposed mandating energy efficiency measures in rental properties, it is clear that the issue is Continued on page 8

The Estate Agent ❘ March 2018

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CEO Report

Continued from page 7

a major focus for the Government as it looks to reduce energy bills across the state. Members may also be aware that an energy efficiency scorecard is being launched later this year. While voluntary at this stage, there is a possibility that it may be mandated in the future.

Meanwhile, the Institute continues to promote greater professionalism within the industry and has been involved in the national review of real estate qualifications. Draft training qualifications for the Certificate IV in Property Services (Real Estate), Certificate III in Property Services (Agent’s Representative) and the Diploma in Property Services were released for member consultation in late 2017.

In addition, the REIV will be holding its annual conference, Ignite 2018, on March 21. The one-day conference is the ideal opportunity for members to enhance their professional development and features presentations by digital

Changing landscape: The legislative environment is set to change further throughout 2018.

The Institute continues to promote greater professionalism within the industry disruption experts Stephen Scheeler (former Facebook – Australia and New Zealand – Managing Director) and Gus Balbontin (former Lonely

‘Oditi voluptat lapnis dolestiores qui dite nemporessit laccaessequi tessed quid est quod que volupta tectatur’

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The Estate Agent ❘ March 2018

Planet Executive Director and Chief Technology Officer). Other speakers include Order of Australia (OAM) recipient Allan Sparks and the Director of CAV, Simon Cohen. A further six breakout sessions will be real estate focused, including a presentation by business financial coach Jason Cunningham. Members who attend the event will earn eight CPD points.

Bulletin

Updated REIV Rules of Practice

The REIV’s Rules of Practice have been updated with changes for member agencies producing advertising material. Any advertising material promoting a member agency needs to include the following wording: “If your property (business) is exclusively listed with another agent, please disregard this communication”, or words to similar effect. The words must be in the same size and font as the wording of the main content. If the rule is ignored,

a member faces a substantial penalty if a complaint is made by another member. In addition, the REIV Board is currently reviewing the application of complaints and disputes processes under the Constitution and By Laws. Given increased focus by Consumer Affairs Victoria (CAV) on underquoting, it is imperative that the REIV ensures a consistent and transparent approach is applied when dealing with professional misconduct. More information will be provided as these changes are finalised.

Updating Member Details

New VCAT Number

The Victorian Civil and Administrative Tribunal (VCAT) can now be contacted on a single phone number: 1300 018 228.

The new number replaces more than 20 different phone numbers and forms part of VCAT’S ongoing commitment to improving customer service.

Members are reminded to ensure their contact details and communication preferences are up-to-date with the REIV, in order to receive the latest policy announcements and industry data.

With more than five key pieces of legislation currently being reviewed, these digital communications will ensure members remain informed of upcoming changes. Individual members can also login to the REIV website to access member-only information and discounts. Members experiencing issues can contact the Membership Department on 03 9205 6666 or membership@reiv.com.au

look out for signs

Real estate signage remains a considerable issue in Melbourne with a number of municipalities undertaking audits of illegal real estate boards. Agents found to be breaching the Victorian Planning Scheme will be issued with immediate fines.

Corporate penalties of $1586 apply.

REIV Members share greater Rewards The REIV has partnered with Member Benefits Australia to provide individual members with an even broader range of rewards. Members can now access exclusive deals and discounts across automotive, business, shopping, health, travel and entertainment with participating brands including Mercedes, Audi, BOSE, and Bupa.

Regulations reviewed

The Estate Agent (General, Accounts and Audit) Regulations 2008 and the Estate Agent (Professional Conduct) Regulations 2008 are being reviewed as they are due to expire in May. The REIV has provided feedback to CAV on the effectiveness of the current Regulations as well as suggested moving the Sale of a Small Business Statement and its associated provisions to the Sale of Land Act Regulations.

The Estate Agent ❘ March 2018

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Bulletin

guidelines issued on vacant land statements

The Director of Consumer Affairs Victoria (CAV) has issued advice for agents selling vacant land on how they should record it in the approved statements.

Agents selling vacant land with approval or plans to build a house or unit are advised to complete the Statement of Information in the normal way – if the land has approval for a house, use the suburb or locality median price for a house; if it has approval for a unit, use the unit median price.

Agents unsure whether a house or unit will be built on the vacant land in the future are permitted to amend

the approved statements to replace the references to ‘house’ and ‘unit’ with ‘vacant land’ where needed at this time.

The approved SOIs are currently being reviewed and are likely to be amended to specifically cater for vacant land sales. Member agencies who require additional information on the new price quoting legislation can organise personalised in-house training from the REIV. For more information on training, contact John Mitchell by emailing jmitchell@reiv.com.au

Agents working to solve homelessness In the past five years, around 70 agents have assisted more than 135 people in finding somewhere to live through the Doorway program.

Delivered by mental health support organisation Wellways Australia and backed by the REIV, Doorway supports people experiencing mental health issues who are homeless, or at risk of homelessness, in securing and sustaining a home within the private rental market.

Court rules on rebate statement authorities

A Victorian County Court ruling has challenged the validity of a number of authorities which contain the CAV approved short form rebate statement – which are used when a rebate will not or is unlikely to be received by an agent.

As the REIV’s authorities incorporate the approved, short form rebate statement, the Institute has amended its online Vic Forms versions to include the wording the Court ruling suggests be added.

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The Estate Agent ❘ March 2018

Jess Barr (pictured) of Harcourts in Warragul says the program provided an opportunity for people to get their life back.

“It’s nice to see them coming in to pay their rent and visit us. It’s great to see people’s confidence grow.”

Doorway offers Victorian property owners a secure and commercially attractive tenancy option coupled with a unique opportunity to make a difference to the lives of people in the community. The program now also includes landlord insurance and a surety fund when accepting a Doorway participant.

For more information on the Doorway program, contact Rosie Frankish on rfrankish@wellways.org or 03 8486 4235.

New Email Hacking Scam Targets Industry

Agents are being warned to review the security of their online systems as a new hacking scam targeting the industry has resulted in losses of more than $200,000.

The scam targets the email accounts of agents, which are then used to send emails to buyers with instructions to deposit money into the wrong bank account. Buyers have reported receiving the contract of sale and trust account details from the agent before being sent a second email from the same email address advising of an error in the first email, and to deposit their money into a different account.

To assist in keeping email accounts safe, agents should consider the following: ❚ s etting up a two-step verification process for email accounts; ❚ c hange passwords and other verification details regularly; ❚ d elete spam messages without opening them.

Instances of cybercrime can be reported to the Australian Cybercrime and Online Reporting Network.

myCAV Portal Launched

Consumer Affairs Victoria has updated the online licensing system for agents. myCAV provides a convenient way for agents to renew and update their licence and business details as well as manage trust accounts.

Agents can now use the portal to send and receive communications in a secure environment.

For more information visit consumer.vic.gov.au/estateagents

Events

Spotlight on change and disruption

One-day event a great opportunity for real estate professionals to engage during a challenging time Almost all aspects of real estate business are experiencing significant change: legislative, technological and consumer expectations.

With the largest review of property legislation in the state’s history currently underway and an unprecedented level of disruption in the industry, the REIV’s Ignite Conference provides a timely opportunity to engage with industry experts and business leaders.

The annual event, being held on 21 March at Crown Conference Centre, includes a keynote presentation by the

Simon Cohen, Director of Consumer Affairs Victoria, is a keynote speaker.

Director of Consumer Affairs Victoria Simon Cohen.

In his address, Mr Cohen will discuss new initiatives for the regulator in 2018 as well as existing legislative reviews.

REIV CEO Gil King says this year’s conference will provide attendees with a comprehensive overview of the Victorian policy environment, including the application of new underquoting legislation and residential tenancy reforms.

“Last year was a challenging one for the real estate sector with the regulator commencing legal proceedings against

a number of agents. The Ignite Conference offers the ideal opportunity for agents to ask questions of the Director, and improve their understanding of proposed changes to multiple property Acts.”

All guest speakers have been carefully selected for their hands-on experience in reinventing businesses threatened by change and disruption.

The REIV conference is a “must attend” for all real estate professionals.

For further details please see the complete program on reiv.com.au/ignite2018

2018 events calendar march

april

june

6th

Young Agents Chapter Career Night

19th

Owner’s Corporation Chapter Seminar

5th

Bendigo Division Meeting

16th

Business Broker’s Chapter Lunch

26th

Valuation Chapter Seminar

5th

Working in Real Estate Seminar

21st

Ignite – REIV Conference

27th

Geelong Division Meeting

21st

Commercial & Industrial Chapter Breakfast

26th

Southern Division Meeting

Held at Crown Conference Centre

may

27th

Southern Division Lunch

april 17th

Property Management Chapter Event

18th

Buyer’s Agents Chapter Breakfast

4th – 6th

VCE and Careers Expo

8th

Senior Auctioneering Competition – Heats

9th

Senior Auctioneering Competition – Final Ballarat Division Meeting

16th

july 13th

Business Brokers Chapter Lunch

18th

Buyer’s Agent Chapter Breakfast

24th

Sales Chapter Seminar

27th

Commercial & Industrial Economic Forecast

Please note dates are subject to change.

reiv.com.au –

your first source for REIV events in 2018 The Estate Agent ❘ March 2018

11

Market update

City fringe boom fuels price growth Median house price increases for seventh consecutive quarter

D

espite increased supply and reduced market participation from investors, Melbourne’s median house price increased for the seventh consecutive quarter in December, up 1.1 per cent to $821,000.

The city’s outer suburbs were the main growth driver in the last three months of 2017, with house prices more than 20km from the CBD increasing 2.4 per cent to a median of $666,500.

Inner Melbourne also experienced solid price growth in the December quarter, with the region’s median house price rising 0.9 per cent to $1,513,000. Meanwhile, values in Melbourne’s middle suburbs were relatively stable over the quarter, up just 0.3 per cent to a median house price of $988,000.

Top-performing suburbs in the December quarter were almost exclusively located at the premium end of the market, led by Toorak where house prices increased 43.3 per cent to a median of $4.6 million – up more than $1 million on September figures.

Significant price growth was also recorded in South Yarra, where the median house price rose 26.7 per cent over the quarter to $2,280,500.

Double-digit increases were also recorded in Mentone, up 19.7 per cent to a median house price of $1.2 million; Surrey Hills, up 18.4 per

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The Estate Agent ❘ March 2018

cent to a median of $2,285,000; Essendon, up 18.3 per cent to $1,715,000; and Malvern, up 17.7 per cent to $2,370,000.

Meanwhile, more than a third of all Melbourne suburbs now have a median house price of at least $1 million. A record 141 Melbourne suburbs were million-dollar suburbs in December, including Balnarring on the Mornington Peninsula which joined the list for the first time.

While Toorak retained its title as the city’s most affluent suburb, Canterbury

Meanwhile, more than a third of all Melbourne suburbs now have a median house price of at least $1 million

In the action: Inner Melbourne also experienced solid price growth in the December quarter.

now commands a median house price of $3.3 million – its highest ever.

Hawthorn and Brighton were also some of the city’s most expensive with median house prices of $2,718,000 and $2.7 million respectively.

Other suburbs recording median house prices above $2 million include Balwyn, Caulfield North and Camberwell.

At the other end of the market Kurunjang in the city’s west was Melbourne’s most affordable suburb with a median house price of $387,000. Melton South, Melton West and Wyndham Vale also offered affordability with median house prices of $420,500, $439,500 and $500,000 respectively.

Increased buyer demand for areas that offer value for money has delivered double-digit annual price growth for the city’s top 10 most affordable suburbs, including Sunbury where the

Market update

Norlane Soars

Healthy: The city wide median house price rose 1.1 per cent in December to $821,000.

median house price has increased 25.6 per cent over the year to $520,000.

Melbourne’s unit and apartment market rebounded in the December quarter with values increasing 1.2 per cent to a citywide median of $594,500. This growth was supported by significant price increases in both Melbourne’s middle and outer rings. The median price of units and apartments in outer Melbourne rose 5.4 per cent over the quarter to $508,500 while middle Melbourne’s median increased 4.7 per cent to $666,000.

In the December quarter, Clayton experienced the city’s largest price growth for apartments with the median up 54.3 per cent to $725,000. This was a quarterly increase of more than $250,000.

Apartments in Brighton East and

South Melbourne also recorded significant price growth over the quarter, increasing 40.7 and 36.8 per cent respectively. Brighton East now commands the city’s highest median price for apartments, at $1,255,000, while South Melbourne has a median of $783,000.

Quarterly apartment price growth of at least 20 per cent was also seen in Moonee Ponds ($650,000), Bentleigh ($1,112,500), Cheltenham ($755,000), Melbourne ($567,500) and Preston ($615,000).

Werribee and Sydenham were the most affordable suburbs for apartments with median prices of $370,000 and $371,000. Other areas below the $400,000 barrier include Carlton ($377,500), Dandenong ($377,500) and Craigieburn ($396,000).

Regional Victoria’s property market remained buoyant in the last three months of 2017, with house prices increasing 2.6 per cent to a record high $396,500.

The state’s largest price growth was recorded in the Geelong suburb of Norlane, where the median house price rose 10.9 per cent over the quarter to $305,000 – up from $275,000 in September. The suburb has also performed strongly over the year, increasing 28.8 per cent on December 2016 figures.

Significant quarterly price increases were also experienced in Clifton Springs and Maldon, up nine and 8.5 per cent respectively. This growth boosted house prices in Clifton Springs to a median of $430,000 while Maldon now has a median house price of $440,000.

Other regional towns recording price growth in the December quarter include Red Cliffs, up 8.4 per cent to a median house price of $227,000; Strathdale, up 8.3 per cent to a median of $391,250; Herne Hill, up 8.2 per cent to $492,500; and Trafalgar, up 8.1 per cent to $365,000.

In the year to December 31, Greater Geelong accounted for more than half the top annual growth suburbs with these areas benefitting from their proximity to Melbourne.

Corio recorded one of the state’s largest annual increases with its median house price rising 24.4 per cent over the year to $311,000.

Meanwhile, coastal areas dominated the list of most expensive towns, led by Barwon Heads ($848,000), Torquay ($745,000) and Geelong ($720,000).

Stawell was the most affordable town in December with a median house price of $175,000. Morwell, Moe and Churchill also offered affordability with median house prices below $190,000.

The Estate Agent ❘ March 2018

13

Awards

Winners’ circle: REIV CEO Gil King presents the team from Methven Professionals Mooroolbark with the 2017 Large Residential Agency of the Year award.

A salute to industry’s best Annual REIV Awards for Excellence celebrate top-performing individuals and agencies The REIV Awards, held in late 2017, celebrated the achievements of members over the past year with a gala function at Crown Palladium attended by more than 1000 people.

Hosted by media personality Jo Stanley, the annual REIV Awards for Excellence recognised the industry’s top performing individuals and agencies from multiple real estate disciplines.

REIV CEO Gil King says the quality of finalists across 30 award categories demonstrates the increasing professionalism of the industry.

“Our members have achieved remarkable results for their clients over the past year with a greater focus on customer 14

The Estate Agent ❘ March 2018

service,” he says. “Many of this year’s finalists and winners are not just meeting best practice standards, but exceeding them. This is particularly impressive given the challenging environment agents have

‘Our members have achieved remarkable results for their clients over the past year’ been operating in, with the new pricequoting laws coming into effect earlier this year.”

He recognised the continued excellence of a number of REIV members, including Nicholas Lynch which was awarded

Medium Residential Agency of the Year for the third consecutive year. Jellis Craig Corporation was another backto-back winner, taking out the Best Website category.

“Being acknowledged by a panel of independent judges is a real honour and all finalists should be proud of their accomplishments.”

After more than three decades of involvement with the Institute, King says long-standing member Peter Hawkins is a worthy recipient of honorary life membership. Former REIV Board Director Adrian Butera received the President’s Award.

The 2017 awards were made possible by the generous contributions of gold sponsors Smart House Fire Solutions, Neo and Direct Connect; bronze sponsors Macquarie Bank, REI Super and Visual Domain; and partner View.com.au.

Xxxxxxxxx Awards

Winners 2017 MARKETING AWARDS Residential Marketing Award (Budget under $10k) Barry Plant Manningham | Property: 17 Kyrenia Court, Warrandyte Residential Marketing Award (Budget over $10k) Jellis Craig Fitzroy Property: Land on a Roof Project Marketing Award Woodards Blackburn | Property: 1-25/320 Canterbury Road, Bayswater North Rural Marketing Award Ballarat Real Estate Pty Ltd | Property: 341 Colliers Gar Road, Eversley

INDIVIDUAL AWARDS Residential Property Manager of the Year (Executives) Natisha McLean | Woodards Residential Property Manager of the Year Megan Wilson | Metro Property Management Pty Ltd Residential Salesperson of the Year (Executives)

Matthew Scafidi | Noel Jones Mitcham Pty Ltd

Best Website Award Jellis Craig Corporation Pty Ltd

Residential Salesperson of the Year Vicki Sayers | RT Edgar Flinders

Corporate Promotion Award (Single Office) Carter Real Estate Corporate Promotion Award (Multiple Offices) O’Brien Real Estate Pty Ltd

Commercial Property Manager of the Year Linda Hawthorne | CBRE Commercial Salesperson of the Year Lewis Tong | CBRE Buyer’s Agent of the Year Lisa Parker | Parker Investment Properties Business Broker of the Year Blake Hedley | Mint Business Brokers Owner’s Corporation Manager of the Year Stephen Briffa | Network Pacific Real Estate Pty Ltd

REIV Awards host: Jo Stanley

Novice Auctioneer of the Year Joshua Kalender | Nelson Alexander Pty Ltd Senior Auctioneer of the Year Harry Li | iSell group

AGENCY AWARDS Innovation Award Market Share Property

Corporate Support Person of the Year Bianca Dobson | Nicholas Lynch Rentals Pty Ltd

Communications Award Harcourts Victoria

Outstanding Young Agent of the Year Award Bianca Butterworth | CBRE

C&I Gold Award for Overall Excellence CBRE

Community Service Award Biggin & Scott Knox

Commercial Agency of the Year Colliers International (Victoria) Pty Ltd Small Residential Agency of the Year Keyhole Property Investments Medium Residential Agency of the Year Nicholas Lynch Large Residential Agency of the Year Methven Professionals Mooroolbark

VIEW.COM.AU Awards VIEW.com.au Sales Agency Award Woodards Blackburn

REIA National Awards for Excellence High achievers: Nicholas Lynch was awarded the Medium Residential Agency of the Year award for the third year running.

Thursday, 22 March, 2018 Doltone House, Sydney The Estate Agent ❘ March 2018

15

Awards

2017 Honorary Life Membership Peter Alan Hawkins REIV Past President Peter Hawkins has been recognised for his significant contribution to both the Institute and the broader real estate industry, awarded REIV Honorary Life Membership.

Hawkins has been heavily involved with the REIV since joining in 1983, serving the maximum nine-year term as an REIV Board Director from 1996-2005. He has also served on many REIV committees including the Education Committee, Best Practice Committee, Business Services Committee and Ethics Council.

Despite holding a number of senior positions, Hawkins is best known as an experienced and passionate auctioneer.

He is an accredited REIV auctioneer and auction trainer, previously serving on the Auction Chapter Committee for four years.

In addition, Hawkins was heavily involved in the review and revision of the REIV Auction Code of Conduct and co-ordinated the REIV Novice and Senior Auctioneer of the Year Competitions in the mid-90s before going on to win the Australasian

title in 1997. He was inducted as an REIV Master Auctioneer in 2016.

Hawkins began his real estate career more than four decades ago as a salesperson for Dalgety Australia before later working as a property manager for the same company. In 1975, Hawkins joined Griffins King and Rice, later becoming a director of the business in 1981. A year later he became Officer in Effective Control of Pat Rice and Hawkins.

Hawkins says it is a great privilege to even be nominated for honorary life membership.

“I can honestly say that I always thought there were a lot of people in front of me who deserve honorary life membership, so I was pleasantly surprised.”

He says that despite the significant impact technology has had on the way agents conduct business, the REIV remains relevant.

“I would say that the REIV is more relevant today than perhaps 10 or 20 years ago. There are three things that the REIV has always provided to members and they are education, information and friendship.

“It’s invaluable for any real estate person who wants to progress in the industry that they are a member of the REIV.”

2017 President’s Award Adrian Butera

Master auctioneer: President’s Award winner Adrian Butera with Joseph Walton.

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The Estate Agent ❘ March 2018

Well-known agent and Compton Green Director Adrian Butera is the recipient of this year’s President’s Award.

Since beginning his real estate career with Ray White in 1991, Butera has been a trailblazer for auctioneering in Victoria.

In 1994, he took out the REIV’s Novice Auctioneer of the Year award before going on to win the REIV’s inaugural Senior Auctioneer of the Year competition just four years later. It’s a title he has won a further three times during his career, in 2001, 2004 and 2010. He has also represented Victoria at the Australasian Auction Championships four times, making the final on three occasions.

Passionate auctioneer: Peter Hawkins is honoured for his four decades of service.

Butera held several positions during his time with Ray White, including as an auction trainer for the broader corporate group, before joining independent agency Compton Green in Melbourne’s inner west.

In addition to individual success as an auctioneer, Butera has also made a significant contribution to the Institute and broader real estate industry.

An experienced auction trainer of more than 20 years, he became the youngest REIV Auction Chapter Chair in 2002.

He has also been instrumental in the development of the REIV’s Young Agent’s Chapter and Master Auctioneers Program.

In 2011, Butera was elected to the REIV Board of Directors, holding the position of Senior Vice President for several years.

Over the years, he has also been actively involved with a number of charities including the Royal Children’s Hospital and the Rotary Club of Williamstown.

Awards

RESIDENTIAL SALESPERSON OF THE YEAR Vicki Sayers A lifelong passion for real estate saw Vicki Sayers leave nursing eight years ago to pursue a career in real estate.

While unrelated, Sayers says the transition to real estate was relatively smooth with the two industries requiring similar personal attributes.

“Being a good communicator, authentic and approachable is what it takes to be successful in either role,” she says.

Her decision has been rewarded with Sayers named the REIV’s 2017 Residential Salesperson of the Year after being a finalist in the same category two years earlier.

Sayers says the win came as a surprise as she had only moved to RT Edgar Mornington Peninsula at the start of 2017.

“To continue to be recognised whilst meeting the challenges of a new work place and all that goes with it felt awesome,” she says.

“I haven’t seen a woman win this category before and to win in a year that presented so many challenges was just extraordinary.”

Sayers says authenticity has been the key to her success, along with knowing her market and providing a great customer experience.

Her advice for new agents is to follow your instincts, surround yourself with good

Good communicator: Vicki Sayers with former REIV President Joseph Walton.

people and be willing to delegate.

“Find mentors but don’t try to be them, do it your way. Listen to advice but make it your own,” she adds.

“Be helpful even when you have nothing

to sell, provide advice, offer insight to the area or suburb. People remember those who took the time to offer something without having to sell.”

WE ’LL TAKE CARE OF YOUR CUSTOMERS, WE ’LL TAKE CARE OF

you too

Direct Connect is about more than just connections, we’re about making moving easy for your customers and adding value to your business.

Call our dedicated Member Services Team for more information on: 1300 558 169 or visit agents.directconnect.com.au

The Estate Agent ❘ March 2018

17

Awards

Outstanding Young Agent of the Year Bianca Butterworth CBRE Commercial agent Bianca Butterworth is proof that hard work and persistence is the key to success.

A sales agent for just three years, Butterworth is the 2017 recipient of the REIV Outstanding Young Agent of the Year award.

Working predominately with luxury and unique commercial sites on the Mornington Peninsula, Butterworth says winning the award was a surprise.

“Being a female in a male-dominated industry, particularly the commercial sector, it’s nice to be recognised on a number of levels,” she says.

Involved with the REIV’s Young Agent Chapter for the past six months, Butterworth says persistence is the key for new female agents entering the commercial space.

“You’re going to get a lot of knockbacks in this industry and when you answer the phone people will often assume you’re the

Rising stars: Michael Webb, 2016 Outstanding Young Agent winner, with Bianca Butterworth.

secretary, but you’ve got to roll with the punches and have a thick skin.”

“Knowing how to play to your strengths is also an advantage in the industry, and having a female in the room can really change the dynamic of the conversation as well as the outcome.”

Butterworth attributes her early success to her competitiveness as well as the supportive leadership team at CBRE. “Having the support of leaders who are progressive is essential; I couldn’t have done it without the likes of Mark Wizel, Operational Manager Georgia Theodoris and their respective leadership team.”

2017 Residential Salesperson of the Year (Executives) Matthew Scafidi Five years after being a finalist in the Residential Salesperson of the Year category, Noel Jones Mitcham Director Matthew Scafidi has taken out the 2017 Executives title.

While Scafidi says the award was unexpected, he attributes the win to a collaborative team effort.

“There is a lot of pride involved and although it’s an individual award, it’s certainly only due to the calibre of my team.”

Scafidi is no stranger to success, previously winning the REIV’s Achievement Award in 2010 as well as the Small 18

The Estate Agent ❘ March 2018

Residential Office of the Year in 2014.

Working in the industry for a decade, Scafidi believes a good work ethic is the key to being successful in real estate.

“Understand that real estate is a lifestyle, rather than a job. If you aren’t prepared to give it 100 per cent every day and have no plan B, then you won’t get far,” he says.

He says building relationships with clients and the local community is essential in attracting and retaining business.

“This game is about how many people know you, not how many people you know.

Team effort: Matthew Scafidi with colleagues.

“Lastly, your reputation is paramount.

You must live by your values and remember not all business is good business if it breaks these values.”

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help agancies and landlords meet the safety requirements for carbon monoxide testing. If Gas heaters and appliances go untested, carbon monoxide leaks can cause significant harm to residents, and in some cases, death. To protect both the tenant and the property, the REIV recommends testing of gas appliances every two years.

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TheThe Estate Agent ❘ December 2017 Estate Agent ❘ March 2018 smarthouseaustralia.com.au

19

Auctioneering

Auctioneering talent: Above left, Jordan Culham; above right, (left to right) Andy Choi, Luke Banitsiotis and Sam Ejtemai.

Victoria’s auctioneering talent on display Victoria’s auctioneering ability reached new heights in 2017 and has school leavers considering a career in real estate Interschool Auctioneering In a bid to encourage more schoolleavers to consider a career in real estate, the REIV has launched its first Interschool Auctioneering Program.

The program partnered Year 11 and 12 students with highly experienced and respected auctioneers, providing them with the necessary skills to successfully conduct an auction.

Jordan Culham, from Melba College in Croydon, impressed the judges with his cheeky personality to take home the inaugural competition in front of more than 100 member agents.

In the lead-up to the event, Culham attended weekly training sessions with Woodards Blackburn, learning the 20

The Estate Agent ❘ March 2018

tricks of the trade from former REIV Novice Auctioneer of the Year Luke Banitsiotis. He was also mentored by REIV Board Director Cameron Way and Area Specialists’ Andy Choi.

“The competition was a real challenge because it is so far removed from what you learn in school. In the past I avoided public speaking, but my mentors really boosted my confidence and taught me to embrace my sense of humour and personality, especially when extracting bids,” he says.

Culham went on to represent Victoria at the Australasian Real Estate Institutes’ Auctioneering Schools Championship, which was won by Andre Briffa from Tasmania.

“After this experience I have realised

how much I enjoy it and could definitely see myself working as an auctioneer in the future,” he says.

Interested students and mentors should contact events@reiv.com.au for more information on entering the 2018 competition.

AUSTRALASIAN AUCTIONEERING CHAMPIONSHIPS iSell group’s Harry Li has been awarded the REIV’s 2017 Senior Auctioneer of the Year – a title he has previously won in 2014 and 2016.

Li has been a dominant Victorian competitor for the past few years, also taking out the Australasian Auctioneer of the Year title in 2015.

Auctioneering

After placing as a Victorian finalist in 2016, Marshall White’s Michael Wood went one step further and was awarded the 2017 Victorian Senior Auctioneer of the Year runner-up.

Both Li and Wood represented Victoria at the 2017 Australasian Auctioneering Championships, held in Adelaide in September. Hotly contested, Queensland’s Justin Nickerson narrowly held off Clarence White from NSW to be awarded the Australasian trophy for the second consecutive year.

Other Australasian finalists were Mark McGoldrick and Ned Allison from New Zealand and Bronte Manuel from South Australia.

REISA CEO Greg Troughton says this year’s contestants raised the bar with top performances from all 18 competitors.

“The depth of the auctioneering talent on display was exceptional and really demonstrated that we have some of the best auctioneers in the world.”

NOVICE AUCTIONEER OF THE YEAR COMPETITION More than 30 budding auctioneers took part in the 2017 Novice Auctioneer of the Year competition.

Open to members who have never called a public auction, contestants were tested on their knowledge of legislation and best practice auctioneering.

Fifteen agents advanced through to the semi-finals, including Adriana Parolin (Nelson Alexander Pty Ltd) and Samantha McCarthy (Hocking Stuart [Werribee]), before the field was narrowed to seven finalists.

Last year’s finalists were Sam Ejtemai (Woodards Blackburn), Joshua Kalender (Nelson Alexander Pty Ltd), William O’Brien (Hocking Stuart (BSM) Pty Ltd), Aidan Oke (Buxton (Mentone)), Shane Pope (Hocking Stuart – Mornington), Harley Toyle (Fletchers) and David Moskovic (Fletchers).

Experienced auctioneers Harry Li, Michael Wood and Anthony Webb oversaw the judging of the novice finals, awarding the 2017 title to Joshua Kalender who says the competition has been a platform for him to launch his auctioneering career.

“In the marketplace, great auctioneers are highly sought after by vendors looking to trust their sale in the hands of an established and recognised expert.

Winning this award is a platform, the foundation which allows me to get one step closer to etching my own name next to the experts who have called before me,” Kalender says. He is now regularly conducting street auctions and is thriving on the challenge.

REIV Auction Chapter Chair Adam Docking says the quality of this year’s entrants demonstrates the commitment by up-and-coming auctioneers.

“The standard of this competition improves every year.”

Nominations for the 2018 competitions are still open, visit reiv.com.au/auctioneering to find out more

2018 Auctioneering competitioNs 8th May

Senior Auctioneering Competition - Heats

9th May

Senior Auctioneering Competition - Final

8th August

Commercial & Industrial Novice Auctioneers Competition - Heats

14th August

Novice Auctioneers Competition - Heats

15th August

Commercial & Industrial Novice Auctioneers Competition - Final

21st August

Novice Auctioneers Competition - Semi Final

28th August

Novice Auctioneers Competition - Final

28th August

REIV Interschools Auctioneering Program

14th–16th October

Australasian Auctioneering Championships (New Zealand)

Winners are grinners: From far left, Aidan Oke; Joshua Kalendar; REIV’s 2017 Senior Auctioneer of the Year Harry Li with Adam Docking, Chair of the Auction Committee and REIV Director.

The Estate Agent ❘ March 2018

21

Policy Update

Legislative changes underway: The Andrews Government has announced significant reform of the Residential Tenancies Act.

Proposed reforms pose a danger to landlord rights REIV to take battle to Parliament to protect against erosion of safeguards and security

T

he property sector remains the focus of multiple legislative reviews with the Andrews Government announcing significant reform of the Residential Tenancies Act (RTA) in October. The 14 proposed changes include the removal of the Notice to Vacate for ‘No Specified Reason’; limiting the use of ‘end of fixed term’ Notices to Vacate; capping the bond at one month’s rent for all tenancies of less than $760 a week; landlords unable to unreasonably refuse consent for pets; allowing tenants to make minor property modifications; introduction of an agent and landlord blacklist; requiring pre-contractual disclosure by landlords regarding 22

The Estate Agent ❘ March 2018

asbestos and intention to sell; a new commissioner for residential tenancies; early release of bonds by agreement before the end of a tenancy; faster tenant reimbursement for urgent

Announced without consultation with the REIV, these reforms coincided with the Northcote by-election repairs; automatic bond repayment within 14 days when a claim hasn’t been lodged; ban on rental bidding and rent bidding apps; rent increases restricted to once a year; and

prohibiting of false, misleading or deceptive representations by landlords or agents prior to a tenancy.

These changes were announced without consultation with the REIV and coincided with the Northcote byelection. The REIV has been vocal in our objection to many of these reforms, particularly options which remove important landlord rights or reduce an owners’ security over their investment.

The Institute has discussed our concerns with the Minister for Consumer Affairs Marlene Kairouz, as well as the Shadow Minister Heidi Victoria. The Institute has also met with a number of Legislative Council crossbenchers to highlight areas of concern and garner support.

These reforms are only proposed at this stage with no draft legislation available for debate. In conjunction with the Opposition, the REIV has distributed a petition opposing the changes with

Policy Update

the intention of tabling the responses in Parliament. Members are urged to complete the petition and distribute it to their landlord clients.

Meanwhile, legislation amending the RTA to provide for long-term leases of more than five years under the Act has been introduced to Parliament.

While the REIV supported the removal of Section 6 of the RTA in principle, the Residential Tenancies Amendment (Long-Term Tenancy Agreements) Bill 2017 removes important protections for supply-side stakeholders. This includes capping maximum bond amounts in tenancies of more than five years to the equivalent of four weeks rent – significantly less security than in the majority of standard fixed one-year tenancies, which are not subject to a maximum bond if the weekly rent is above $350.

Landlords would also be restricted from seeking a higher bond until the expiry of a five year period with additional legislated provisions enabling the tenant to dispute any increase to the bond. Furthermore, the legislation fails to take into consideration crucial provisions for successful long-term agreements, such as built-in rent reviews, break lease provisions for both parties and dealing with instances of rent arrears.

While a prescribed long-term tenancy agreement has been created, parties opting for a fixed-term agreement of more than five years can use either the prescribed lease or the standard lease.

This will create further confusion in the marketplace, especially as the vast majority of residential tenancies have an average duration of 18 months.

In its current form, fixed long-term tenancies of more than five years pose considerable risks for landlords and their investments. The REIV will continue working with the Victorian Liberal Party and crossbenchers in opposing this rushed legislation.

The Victorian Cladding Taskforce is also set to significantly impact the city’s apartment market.

Property taxes: Land tax continues to impact on members and their clients.

Chaired by former Premier and architect Ted Baillieu, and former Deputy Premier and Minister for Planning Professor John Thwaites, the taskforce is responsible for auditing the extent of non-compliant cladding across the state as well as issues of rectification for affected buildings.

This decision will significantly decrease the value of apartments in affected buildings as well as the attraction to apartments in desirable areas In its submission to the taskforce, the REIV urged Government to promptly identify at-risk buildings to reduce the financial impact on the broader apartment market. In addition, the Institute strongly opposed owners and owners’ corporations being responsible for any costs associated with building assessment and remediation work, particularly as these buildings were approved at the time of purchase.

Despite strong opposition from the REIV and the fact the issue has arisen out of failings in the building approval process, the taskforce has indicated that owners will be responsible for the cost of rectifying non-compliant buildings.

This decision will significantly

decrease the value of apartments in affected buildings as well as the attraction to apartments in desirable inner city areas by investors, owneroccupiers and renters.

The need for a special resolution, whereby 75 per cent of lot owners must agree, for any assessment or remediation will also delay the process due to the considerable expense involved for owners, potentially in excess of $100,000 per lot.

The REIV will continue to lobby Government regarding this issue, which has extensive ramifications for selling agents, property managers and owners’ corporation managers operating in high density areas.

Land tax is another issue that continues to impact on members and their clients. With close to 650,000 properties subject to land tax in 2016, and a 28 per cent increase between the last valuation cycle and the current valuation cycle, changes to valuations will result in greater increases more frequently. Centralising ratings valuations out of the Valuer General’s office will reduce the transparency of valuation processes and also remove important in-built checks and balances.

This is likely to result in higher costs for appeals. The Institute has established a working party and engaged a specialist firm to work with Ministers from both sides of Government on this issue.

The Estate Agent ❘ March 2018

23

Profile

Walking the walk: REIV President Richard Simpson recognises Yarrawonga agent Andrew Shell as an Associate of the Real Estate Institute.

City skills flourish in country Andrew Shell fell in love with Yarrawonga when looking for a property for his family and made a life-changing decision

A

ndrew Shell walks the walk.

After more than two decades selling real estate in the big smoke, the Melbourne-born agent packed up and moved to Yarrawonga with his wife in 2007. He bought an established Yarrawonga real estate agency with a staff of three, expanding the business over the years to 10 employees and two offices – in Yarrawonga and over the border in Mulwala.

Shell says he “fell in love with the place” when he first went to 24

The Estate Agent ❘ March 2018

Yarrawonga to look at a property for his mother-in-law.

“The opportunity came up to buy an agency and my wife and I made a conscious decision that this is where we’re going to retire. The main demographic in Yarrawonga are retirees from Melbourne,” he says.

A decade later and Shell has immersed himself in the country lifestyle, crediting his vast real estate experience in Melbourne for his agency’s success.

“Yarrawonga is a competitive market

and we run the business the same as a business would run in Melbourne.

Our slogan is ‘You can profit from our experience’.

Shell’s real estate career began in 1986 at C.E. Carter & Son Pty Ltd, under the direction of REIV Past President Richard Carter. While Carter would remain a lifelong mentor, Shell started at Woodards in Camberwell in 1990, before moving to the Balwyn office to work alongside industry stalwarts such as Richard Jellis.

He completed a stint at Fletcher and Parker, now known as Fletcher’s in North Balwyn, as a sales manager before beginning with Australand to head up the sales and marketing of the Commonwealth Games Athlete Village in Parkville.

Profile

Working almost exclusively in the city’s east, Shell has bought and sold residential and commercial real estate in many Melbourne suburbs including Ringwood, Croydon, Surrey Hills, Kew, Caulfield North, Ivanhoe East and Balwyn. He says the Melbourne market has changed dramatically in the past decade, particularly in the eastern suburbs where demand continues to exceed supply.

“We’ve experienced moderate growth in Yarrawonga but not to the extent of Melbourne, where we’ve seen doubledigit increases.”

An active REIV member since 2007, Shell has been heavily involved with the Murray Alpine division, previously serving as Chairperson as well as Members’ Council delegate for the region. He is also a regular attendee at REIV conferences and is a current

‘Reputation means everything, even more so in a country town where word of mouth and rumours spread quickly’

member of the Property Profile Group.

“There’s certainly value to being an REIV member, as exchanging ideas with peers is the key to success in this industry.”

Recently awarded an REIA Associate of the Real Estate Institute Diploma, Shell says he has noticed a shift in attitudes among some of the younger agents.

“There’s a reluctance to want to share ideas given the level of competitiveness for business.”

For those thinking of entering the

industry, he says a good work ethic is essential.

“Regardless of where you work, know your market. Reputation means everything, even more so in a country town where word of mouth and rumours spread quickly.”

He also encourages more Melbourne agents to consider moving to regional and rural areas, where their knowledge and experience will give them a point of difference.

“There are untapped opportunities for agents to move to regional Victoria, particularly in growth areas like Yarrawonga.

“I’m proud to say that we’ve started the careers of up-and-coming agents that now work in Melbourne.

“Real estate has been very good to me but you have to work hard at it to succeed.”

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MARKETING. REAL ESTATE. LEADERS.

The Estate Agent ❘ March 2018

25

Feature story

Selling in a controversial development Finding the balance when dealing with potential sellers concerned about rapid change

I

t’s no secret that Melbourne’s population continues to rise by about 100,000 new residents per annum. How we cater for our rapidly rising population – in existing suburbs or in Melbourne’s urban fringe – is subject to much debate.

Increasing density in our established inner and middle ring suburbs is the Government’s strategic vision, however residential groups are often opposed to such developments in an attempt to preserve the local landscape, amenities and character.

Last year the Andrews’ Government introduced a raft of changes, following a review of the suburban Residential Zones. Density and dwelling restrictions were removed in neighbourhood areas including the cap on how many dwellings can be built on a block.

Instead, new requirements mean developments must have a mandatory percentage of garden space.

Under the new rules, blocks between 400-500sqm require a 25 per cent minimum garden area, blocks between 501-650sqm need 30 per cent, and blocks larger than 650sqm must have a 35 per cent garden area.

This move aims to further enhance Melbourne’s legacy of distinctiveness, liveability and sustainability. “These 26

The Estate Agent ❘ March 2018

are once-in-a-generation changes to suburban residential zones and are all about protecting the much-loved Aussie backyard,” Minister for Planning Richard Wynne outlines.

With the Andrews’ Government committed to ensuring Victoria caters for population growth and delivers a record pipeline of infrastructure, controversial developments may become commonplace.

Developments include the Melbourne sky rail, where rail lines in Melbourne’s south-east were elevated in order to remove nine level crossings between Caulfield and Dandenong; the Moonee

‘These are once-in-a-generation changes to suburban residential zones and are all about protecting the much-loved Aussie backyard’

– Minister for Planning Richard Wynne Valley Racecourse development, which includes new community, business, recreation and leisure facilities in addition to a residential precinct of 2000 dwellings; and previously the Eastlink tollway and other highdensity housing developments around Melbourne’s transport hubs.

A growing number of local residents are turning to agents for advice on the impact these developments are having on their property value. However, some projects can also be a leading indicator of price growth within a suburb as people tend to move into an area just before or after a project has commenced.

As an agent it can be a difficult balance between building a rapport with potential sellers, and indeed sympathising with their concerns, while identifying the opportunities a high density or controversial development can offer the market.

Feature story

Experts: Paul Castran, Castran Gilbert Senior Consultant, and Gary Peer, Director of Gary Peer and Associates.

Street in Mitcham was one of their most controversial.

“It was controversial because the locals didn’t want it and the Minister even had to get involved, but once it hit the market it was a different situation with the 240 apartments selling out in six weeks. It’s a great looking building with well-designed apartments and people love it.”

While Melbourne has changed over the years, so too have the types of developments being built. Castran

‘People have difficulty with change and generally the older people are, the more resistant they are to change’

– Paul Castran, Castran Gilbert Senior Consultant

Castran Gilbert was one of Melbourne’s early adopters of off-theplan sales with the South Yarra-based agency selling about 150 developments a year. These projects span a large portion of the city, including Prahran, Yarraville and Brunswick in the inner ring to Patterson Lakes, Wantirna and Ringwood in the outer suburbs.

Castran Gilbert Senior Consultant Paul Castran says the agency’s reputation and brand means they are fortunate enough to select what developments they work with. While the vast majority are well received by communities, Castran says the re-development of 1-19 Columbo

says there has been a shift away from single dwellings as Melbourne looks to accommodate the highest level of interstate migration in 40 years.

He says established suburbs with quality infrastructure are preferred areas for increased density, particularly those near public transport.

“Kennett was instrumental in higher density development, identifying a 30km ring around the Melbourne CBD as areas suitable for development because the infrastructure was already there. It’s easier to develop where infrastructure exists, rather than decentralisation.”

This progress has not always been welcomed by local residents, with many trying to preserve their neighbourhood.

“People have difficulty with change and generally the older people are, the more resistant they are to change.”

Castran says despite the higher

density, the city’s inner and middle suburbs have retained their character and integrity through the effective use of heritage overlays. “A lot of heritage overlays have allowed the façade to remain the same with a contemporary extension out the back. It’s a marriage of the old and the new and that’s very popular with buyers.”

Gary Peer, Director of Caulfieldbased agency Gary Peer and Associates, says several vendors in Carnegie have decided to sell due to the looming sky rail structure. While those that sold have achieved solid results, Peer says it’s too early to be sure of the long-term impact on local property prices.

“I really don’t think the effect around Carnegie and surrounds will be significant either way in the big picture of the marketplace. Many, if not most, of the properties affected by sky rail were alongside the railway line anyway so those buyers disturbed by it now were probably also disturbed by it before.”

Peer says development is part of the emerging lifestyle of Victorians, with densification offering greater neighbourhood amenities, including cafes and parks.

“Yes, the large family home on a big block of land has become very expensive, and that is unfortunate in the eyes of many whom were lucky enough to grow up with that, however some of the new features that are accompanying increasing inner city population growth is making inner city living better for many.”

Peer says agents should embrace the changes to the city’s property market, with more properties now available for rent and sale.

“Our role is to attain the optimum outcome for those whom engage our services for sale or rental.”

The Estate Agent ❘ March 2018

27

Member News

Member Milestones More than 160 members have marked membership milestones in the past eight months, signalling their dedication to their careers and the broader industry.

30 years Christopher Barson Chris Bell David Bowden Neil Butler Stephen Deppeler Brent Flannagan Anthony Grundy Kurt Hartelt Neil Hodson John Kennedy Snr Jack Lazenby John McCann John Morgan Stephen Paragreen Simon Radolnik John Saunders Peter Small Stephen Stockdale Rod Taylor Paul Triandos

20 years Sabina Aldouby Ian Angelico Gaile Atkinson Amin Badawi Glenn Boyd Mark Brooke Derrick Brown Damian Cayzer Philip Clark Anita Connally 28

Almost 90 members have achieved 10-year milestones and an additional 51 individuals are celebrating two decades as an REIV member.

A further 19 agents have reached 30 years while Bill Shelton, Eric Dick, Robyn Waters and Philip Giarracca are all observing 40 years as members.

Meanwhile, Geoff Crowder and Bill McKewan have been REIV members for half a century and Ballarat member Bruce Bartrop and Bill Stokes are celebrating a remarkable 60 years with the Institute.

Richard Crane Anthony D’Ambros Lisa Davies Grant Day Rosalie Day Darren Dean Anthony Delinaoum Melanie Dennis Mario Elezovic Robert Elezovic Brad Ellis Wayne Elly John Gazis Grant Gifford Peter Grande Garry Hubbard Zac Karvouniaris Natalia Kohut Kevin Lanigan David Lussi Adam Mabilia Dave Matler Tom McCarthy Greg McDonald Todd McKenna Andrew McLaren Jason Nevins Antony Nixon Bart O’Sullivan Gary Powers Frances Roccisano Mario Ruberto Rik Rushton

The Estate Agent ❘ March 2018

Aaron Silluzio Lou Silluzio Clayton Smith Graeme Taylor Clem Tralongo Julian Valmorbida Brett Walker Rob Waller

10 years Laura Affat Ahmet Ali Marc Angelone Jason Bailes David Bancroft Charlie Barbanti Helen Barnes Naiomi Bentley Samantha Bishop Lauren Cardilini Lauren CarlandTomasino Jenny Caughey Jee Chin Geraldine Chirnside Terry Cleary Jeremy Cleaver Michael Coutts Angie Di Conza Arthur Dislakis Michael Divito Jaylee Dixon Ben Driller

Dedicated: Bill Stokes (left) and Bruce Bartrop have been members of the Institute for 60 years.

60 years

Bruce Bartrop Bill Stokes

50 years

Geoff Crowder Bill McKewan

Joseph El-Fahkri Martin Ewart George Findikakis Matthew Fitzgerald Kristien Formosa Adrian Foster Aldo Galante David Garfield Stephen Garth David Green Rob Groat Limor Herskovitz Adam Hicks Edward Hobbs Nicole Jacobs Vanessa James Ross Johnston David Kelly Tom Kenessey Thomas Kurtschenko Steve Lian Tamara Lloyd John Lococo Gail Logan Tony Lombardi Michael Love Leigh McConnon Brad Miller James Mitropoulos Nicole Moschini Umesh Munjal Paul Murphy Vince Nigro

40 years

Eric Dick Philip Giarracca Bill Shelton Robyn Waters

Rick O’Halloran Mark O’Neill Paul Osborne Jim Papadopoulos Orest Popowicz Lisa Reid Renee Reynolds Robert Russell John Sdregas Amit Sharma Andrew Shell John Shore Paul Snowden John Sprakel Ian Stevenson Janet Stubbs Craig Teal Ian Teese Barbara Thomas Cate Thomas Scott Thompson Deb Tucker Michelle Valentic Steve Waldbauer Mark Walsh Joseph Walton Anne Warren Daniella Weissbacher Kim Williams Anthony Wiseman Shirley Yong

YOU DESERVE TO BE REWARDED REIV PRESENTS AN EXTENSIVE RANGE OF MEMBER BENEFITS. Individual REIV members can now easily access a suite of discounts and offers that include: • Car • Business

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To find out more about your member benefits call us on 9205 6666 or visit reiv.com.au

The Estate Agent ❘ March 2018

29

Commercial

Growing appetite for food & Beverage sector

Making way: The North East Link will require the compulsory acquisition of up to 75 properties.

North East Link on track As the single biggest infrastructure investment in Victoria’s history, the North East Link (NEL) will coincide with significant rail development in the city’s north-east. This includes the duplication of the Hurstbridge rail line, intersection removal at Grange Road as well as plans to extend the Hurstbridge line to Eltham and the Mernda extension to South Morang. v Speaking at an REIV event last month, North East Link Authority CEO Duncan Elliott says providing an integrated transport solution in the north-east is essential given the area is expected to increase by about 200,000 residents by 2031.

“Population growth to the north is going to be significant and we’re already dealing with a large, heavily populated area in the north-east itself. The North East Link is critical to supporting access to employment in the east and south-east and hopefully, more in the north itself.”

The NEL will be the first piece of major infrastructure in the north-west since the Metropolitan Ring Road was built in the early 1990s. Elliott says unlike the Metropolitan Ring Road where the land use was unplanned and uncontrolled, the NEL has been developed with a land-use policy that will support the infrastructure in terms of growth. “Land planning horizon that we’re working with is now in policy, we use all those forecasts in our planning and we scenario-test to allow for acceleration.”

The NEL is expected to ease congestion on local roads by removing around 15,000 trucks a day off Rosanna Road, 30

The Estate Agent ❘ March 2018

Bulleen Road, Manningham Road and Greensborough Highway.

“Our primary focus of this project is to deal with freight and to deal with the highest demand, which is the east and north east. One of the reasons this project is so important to Melbourne is that with a connected motorway system you can run more efficient, better, higher standard trucks.”

‘The North East Link is critical to supporting access to employment in the east and south-east and hopefully, more in the north itself’ – North East Link Authority CEO Duncan Elliott The project will include twin three-lane tunnels, extending 5km from north of Lower Plenty Road to South Bulleen Road.

Elliott says the NEL will require the compulsory acquisition of up to 75 properties, and these owners have already been approached by the North East Link Authority. Under the Land Acquisition and Compensation Act, offers of compensation are based on valuation by the ValuerGeneral and unaffected market value is measured. Section 32 documents for these properties may need to acknowledge that it is located in an “area of investigation”.

The NEL will also involve significant investment of about $2 billion to $3 billion in the Eastern Freeway with on-ramp signals and express lanes added.

The NEL is expected to be completed by 2027 and has a life expectancy of 30 years from completion.

The retail landscape is rapidly evolving with the market skewed towards food and beverage providers as fashion retailers continue to struggle in an increasingly competitive environment, says Urban Food Collective co-founder Andrew Danson.

Speaking at an REIV Business Brokers lunch, Danson told attendees landlords are moving away from generalisation with real niches existing – and thriving – in the food and beverage (F&B) market. Increased specialisation is also seeing a return of localisation, with operators moving away from shopping centres. While Chadstone has 100 per cent occupancy, Danson says other shopping centres are under pressure, given increasingly high rents for operators.

“It’s getting harder for shopping centres to drive traffic and create a point of difference. Landlords are certainly becoming more conscious of their tenancy mix – particularly around double-ups.”

Danson says department stores are also seeing the value of a successful food and beverage offering.

“Myer research shows that consumers who purchase food and beverage instore go on to spend an extra $30 on merchandise,” he says. David Jones has also revised their food offering with a focus on high-end grocery goods.

Competition within the F&B category is also resulting in smarter operators with an awareness around increasing labour costs and the costs of goods.

Uber Eats is also having an impact on the market, offering value for food and beverage operators but at a high cost, accounting for 25-32 per cent of the total bill.

Business Brokers Lunch: Andrew Danson, Colleen Danaher and Gil King.

Commercial

Landlords face land tax sting in court decision Warehouse and logistics ruling could see many tenants pursue recovery of land tax through landlords

Court ruling: Retail leases expert Rohan Ingleton with Valuation Chapter Chair Sam Tamblyn.

T

he High Court of Australia has dismissed the landlord’s appeal against the controversial CB Cold Storage judgement, following a previous dismissal by the Victorian Court of Appeals. The judgment has serious ramifications for property owners and commercial agents with warehousing and logistics tenants now likely to be governed by the Retail Leases Act (RLA) 2003.

As the Act prohibits the recovery of land tax from tenants, this decision will entitle a vast number of tenants who have previously paid outgoings to recover up to six years of land tax fees from landlords.

“Land tax is a big issue with this decision and a real sleeper for any tenants out there currently paying land tax,” says Madgwicks Lawyers’ Rohan Ingleton.

Speaking at an REIV Valuation event, Ingleton says the initial judgment by Justice Croft and subsequent decisions by the Court of Appeal and High Court relied on precedent and re-affirmed the ultimate consumer test.

“The ultimate consumer test dates

back to 1991 (Wellingon v Norwich Union Life Insurance Society Ltd) and found that if the tenant is supplying goods or services to the ultimate consumer, then that tenant’s use is retail,” he says.

Since 1991 there have been a number of court cases which have also determined the provision of services is a retail activity governed by the RLA, including a caravan park (FP Shine [Vic] Pty Ltd v Gothic Lodge Pty Ltd), chalet serviced apartments (Stringer v Gilandos Pty Ltd) and conference centre

‘Land tax is a big issue with this decision and a real sleeper for any tenants out there paying land tax’ (Fitzroy Dental Pty Ltd v Metropole Management Pty Ltd).

However, some ultimate consumers will be exempt from the provisions of the Act, such as a tenant paying more than $1 million in rent a year, a tenant that is a listed corporation or a subsidiary of a public company.

Ingleton says last year’s Court of Appeal decision did not distinguish between commercial and noncommercial users with the following factors found to be important: that any person could purchase the services upon payment of a fee; the tenant’s business was open during normal business hours; and the tenant’s customers did not pass on services.

As a result of businesses being deemed ultimate consumers, Ingleton says all tenants who provide services will now be captured by the RLA unless they fall into one of the exempt categories under the Act. This will include patent attorney’s offices, warehousing/logistics and shipping/transport businesses, conference centres, serviced apartments, caravan parks and services provided business-to-business.

Advertising signage and manufacturing could also potentially be covered by the RLA. Despite the CB Cold Storage lease incorporating a clause which prohibited the premises from being used as retail services, this was ignored

by Justice Croft.

“Ignore any statements that say the Act (RLA) applies or doesn’t apply because you can’t contract into the Act and you can’t contract out of the Act.” Ingleton says a possible defence for landlords may be that both parties had agreed on lease conditions, including payment and outgoings, at the beginning of the tenancy.

Agents who are currently managing existing common law leases which may now be considered retail premises are advised to assess whether the tenant is paying land tax, and if so, inform the landlord that they could potentially be taken to court for the equivalent of six years land tax.

Under the RLA, landlords will also be liable for repairs and maintaining the property in a condition consistent with when the lease was entered into.

“This decision will not be overturned and you can take the court’s definition of retail as gospel until Parliament changes the Act.” Rohan Ingleton will provide a further update at the REIV event on March 16.

For further details on the event please visit reiv.com.au/learning/ networking-events The Estate Agent ❘ March 2018

31

Tax

Immigration a game-changer Changes to foreign tax rules to impact on agents Specialists: Janet Spencer, Vicki Townsend, Lily Ong, James Ye and Ian James.

I

mmigration and foreign tax reform were a key focus of the Federal Budget with a raft of changes set to impact significantly on buying and selling agents.

Specialist business and immigration consultant Lily Ong says more than 700,000 people arrive and depart from Australia each week, with a tourist boom expected to see this figure increase by as much as 20 per cent in coming years.

The main driver of this growth will be the introduction of a 10-year tourist visa for Chinese citizens, with the Australian Government now offering a similar visa to what has been available in America and Canada for a number of years.

Speaking at the Buyer’s Agent Chapter breakfast, Ong says immigration reform, including changes to the 457 visa, citizenship criteria and permanent resident visas, would have an impact on the types of property being bought by foreign residents as well as the duration it is held for. Immigration changes are now differentiating between the rights of permanent residents and the rights of citizens, in an effort to boost citizenship.

A new category of temporary parent visa is also being introduced this year while the contributory parent and parent visa Resident vs non-resident taxpayers

are still available, however with increased fees.

“The parent visa is still very cheap at $43,600, especially as the parents obtain pension rights after 10 years and the cost of this visa to taxpayers is more than $300,000,” she says.

Ong says a significant number of $5 million investor visas have been converted to permanent visas in the past four years; however refusals are increasing due to non-compliant investments.

“Temporary resident clients who are not able to convert to permanent resident status will need to sell properties within three months of leaving Australia.”

‘Whether an individual is in Australia for over 183 days ... is incorrect to determine residency’ – Sherry Tang, PricewaterhouseCoopers While taxes for foreign buyers of Victorian real estate increased in the 2017-18 Budget, Ong says buyers can apply for a discretionary exemption if the development is going to add substantially to the housing stock or will Resident

Non Resident

Capital Gains Tax

✔

✔

Entitled to CGT discount

✔

✘

Entitled to CGT

✔

✘

CGT withholding

✘

✔

Tax on rental income

✔

✔

Deduction for travel to inspect property

✘

✘

Offset against other income

Carry forward (if no income to offset against)

Treatment of rental loss Absentee charge

✘

Additional stamp duty on purchase

✘

32

The Estate Agent ❘ March 2018

✔ (limited to foreign investors)

✔

be a significant local employer. Property bought from the Department of Housing is also exempt from Foreign Investment Review Board (FIRB) approval.

Meanwhile, permanent residency status for immigration purposes does not mean an individual is a tax resident.

James Ye and Sherry Tang from PricewaterhouseCoopers told attendees individuals are taxed in Australia depending on their residency status, which is determined on a case by case basis. “Simply looking at whether an individual is in Australia for over 183 days a year is incorrect to determine residency,” says Tang.

The primary test for determining residency is whether the individual resides in Australia, taking into consideration the expected length of the visit, social and living arrangements and whether the individual is accompanied by family. Residency for tax purposes is also assessed on whether the individual was in Australia for more than 183 days in the year of income. Tang says the difference in tax requirements for residents and non-residents is significant.

“A resident for tax purposes is subject to Australian income tax on worldwide income while non-residents and temporary residents are only subject to income tax on income sourced from Australia.”

Ye says the implementation of a Common Reporting Standard (CRS) – an information sharing mechanism in terms of assets an individual holds around the world – will make it easier for global income to be located and tracked. To date more than 100 countries have committed to implementing CRS, including Australia, China and many of the world’s tax havens.

Training

Be rewarded for your experience Flexible learning options ensure members continue to develop professional knowledge and skills.

The Institute caters to all levels and styles of learning, offering the Agent’s Representative course, Certificate IV in Property Services (Real Estate) as well as Continuing Professional Development courses.

The REIV prides itself on offering a hands-on learning environment with access to industry experts as well as up-to-date content and materials.

Agents with a substantial level of practical industry experience

may be able to complete their Certificate IV through Recognition of Prior Learning (RPL).

RPL is the formal acknowledgement of a person's current skills and knowledge regardless of whether it occurred in a formal learning environment, and may reduce the amount of contact time required to complete the qualification.

For more information on completing the licence course please contact the REIV Learning and Development team on training@reiv.com.au, or 03 9205 6666

MARCH

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Auction 16th

9am–5pm

Property Sales Introduction to Auctioneering

Commercial 21st

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Residential Property Sales Documentation; Getting it Right

Commercial Property Management Fundamentals

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On their way: 2017 Cert IV in Property Services (Real Estate) graduates.

Advanced Owners Corporation Management

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Intermediate Residential Property Management

Auction

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Property Management

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9am - 5pm

Challenging Situations in Property Management - Your Role & Responsibilities

Property Sales 21st

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Residential Property Sales Documentation; Getting it Right

APRIL Agency & Risk 6th

9am - 12.30pm Managing Risk in Estate Agency Practice

13th

9am - 5pm

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9am - 12.30pm Managing Risk in Estate Agency Practice

Trust Accounting Refresher

Business Broking 16th

9am - 5pm

Business Broking Fundamentals

Commercial 4th

9am - 5pm

Commercial Property Sales Fundamentals

9th

1.30pm - 5pm

Commercial Property Management Options and Renewals of Leases

9th

9am - 12.30pm Pricing Commercial Property for Sale or for Lease

20th

9am - 5pm

Commercial Property Sales Documentation and Processes

27th

9am - 5pm

Commercial Property Management Fundamentals

Owners Corporation 30th

9am - 5pm

Introduction to Owners Corporation Management

Property Management

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9am - 5pm

Advanced Auctioneering

Commercial 2nd

9am - 5pm

Commercial Property Management Fundamentals

16th

9am - 5pm

Commercial Property Management Fundamentals

23rd

Essential Safety Measures for Commercial 9am - 12.30pm Property Managers

23rd

1.30pm - 5pm

The Agent’s role in Commercial Lease Documentation Identifying Common Errors and Mistakes

30th

9am - 5pm

Commercial Property Management Fundamentals

Owners Corporation 24th

9am - 5pm

Intermediate Owners Corporation Management

Property Sales 11th

9am - 12.30pm

Residential Property Sales Documentation; Getting it Right

14th

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Job Ready - Residential Property Sales

Property Management 11th

9am - 5pm

Preparing for and Presenting at VCAT

JUNE Agency & Risk 22nd 9am - 12.30pm Managing Risk in Estate Agency Practice

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Property Sales 29th

9am - 12.30pm

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Preparing for and Presenting at VCAT

Property Management

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Preparing for and Presenting at VCAT

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Residential Property Sales Documentation; Getting it Right Preparing for and Presenting at VCAT

The Estate Agent ❘ March 2018

33

Profile

Flexibility the key: Troy Guthrie says young agents need to be prepared to work outside normal parameters to achieve goals.

Troy carries on the family bloodline Troy Guthrie left a retail career to join his mum at a startup agency where his hard work has paid dividends

R

eal estate is a family affair for Troy Guthrie. In 2015, he left a successful retail career at Converse to join start-up agency Harcourts Ringwood where his mum Kathy is a director.

“My family has always been in real estate for as long as I can remember.

My mum worked for years in different roles in property management, sales and eventually agency general management, which gave me a great

understanding and appreciation of the industry,” Guthrie says.

A strong interest in property combined with experience leading sales teams in a client-facing environment made the decision to move into real estate a relatively easy one. Guthrie’s previous management experience has been beneficial in his new role, where he currently oversees the agency’s general operations and is the sales manager.

‘An even more important quality is resilience. It takes a while for things to start happening when you’re a new agent or new agency’ 34

The Estate Agent ❘ March 2018

Profile

“Our agency’s success to date has been largely attributed to a lot of hard work and a planned path of sustainable growth to ensure that our performance never falls short of the extremely high standards that we set for ourselves.

“Hard work is obviously a key component, but perhaps an even more important quality is resilience. It takes a while for things to start happening when you’re a new agent or new agency.”

more expensive areas due to lower density and higher quality homes, Ringwood has experienced rapid capital growth in recent years. This growth has resulted in Maroondah’s planning department zoning the suburb into two planning ideologies: urban Ringwood and suburban Maroondah.

The urban focus is on high density apartment and townhouse development in areas close to public amenities while the suburban plan

‘Auctioneering is half method and half art-form, and you definitely don’t know you can do it until you actually do it’ Operating in the highly competitive suburb of Ringwood, Guthrie says he is frequently competing against directors of established agencies for listings.

“The most important piece of advice that I received when starting out was, ‘The best results don’t come from the biggest agencies, or those that sell the most properties. The best result will come from the agent that works the hardest for their client’. That mindset has not only kept me with a very high listing percentage since, but has also allowed me to provide constant exceptional service and sales results for my clients.”

He says that while Ringwood North and Heathmont have historically been

aims to retain the suburb’s leafy heritage.

“This has created very high values for properties with development opportunity and soaring median prices for regular homes due to the expansion of a major shopping centre, redevelopment of the train station, a well-performing public school and direct access to the Eastlink – resulting in a new million-dollar suburb.”

While Guthrie says that exponential growth in the area started to slow in mid-2017, price growth has remained steady and is likely to continue this year.

“We don’t think that external factors will negatively affect the suburbs we

Transition: Troy Guthrie’s previous sales experience has been useful.

service, particularly due to the key infrastructure that makes Ringwood a developing satellite city.”

Auctions are an increasingly popular method of sale in the area with Guthrie saying many vendors are now deciding on an auction campaign before engaging an agent for appraisal or consultation.

Guthrie, who typically auctions one property a month and is the agency’s resident auctioneer, says high-profile homes in Ringwood have been achieving exceptional results under the hammer.

“Auctioneering was a natural fit for me. I learned that auctioneering is half method and half art-form, and you definitely don’t know that you can do it until you actually do it.”

In addition to auctioneering, Guthrie has worked hard to develop his industry knowledge and skills, completing the full licence course with the REIV. He says the Certificate IV provided a combination of general industry knowledge as well as an insight into how high-performing industry professionals think, work and act with an ethical mindset.

Guthrie’s association with the Institute continued after he graduated and he was approached to join the Young Agent’s Chapter last year.

In January, Guthrie was also appointed to the REIV’s Estate Agency Practice Committee, which considers the impact of industry issues, including best practice and legislative changes.

Guthrie says it can be challenging for agents new to the industry, and he worked two jobs in the early stages of his career.

“That would be my advice to young agents: be prepared to work outside of normal parameters to meet your goals.

In this industry, longevity is certainly key, so if you can figure out a way to just keep moving forward, things will eventually fall into place and everything gets much easier.”

Professional development remains a priority for Guthrie and he is currently studying a Diploma of Building and Construction at RMIT. The Estate Agent ❘ March 2018

35

Best Practice

Good repair means good repair full stop Property managers need to clarify their obligations for maintenance and repairs

By REIV Corporate Solicitor Peter Lowenstern

P

eter Deliopoulos could hardly have imagined when in 2008 he rented his run-down residential property in Port Albert to Vikki Shields he would be part of a legal drama with lasting ramifications for residential landlords.

In early June 2008 Ms Shields was living out of her car, struggling to find somewhere to live. She heard of the Port Albert property, knew it was in a very bad state but was desperate. One of the attractions was a shed with a concrete base, there was fencing and space for her greyhounds. The rent was $125 a week. In mid-June 2008 she moved in and paid $125 a week until she moved out nearly five and a half years later.

In June 2014, seven months after leaving the property, Ms Shields took Mr Deliopoulos to VCAT. She claimed $14,050 compensation for loss of amenity, alleging Mr Deliopoulos had failed in his obligation to ensure the property was maintained in good repair, both when she moved in and during the time she was there.

In late November that year VCAT dismissed her claim. Ms Shields had not established Mr Deliopoulos was in breach of his Residential Tenancies Act

Section 681 obligation to maintain the property in good repair.

In giving its decision VCAT noted Mr Deliopoulos was required to take reasonable steps to ensure the property was maintained in good repair. Nonetheless, Section 68 did not

Specify precisely in your managing authority your responsibilities for property maintenance and repairs require him to upgrade the standard of the place without there being an appropriate increase in the rent. On the basis of the evidence, VCAT found Mr Deliopoulos had fulfilled his obligations.

Backed by Victorian Legal Aid, Ms Shields lodged an appeal with the Victorian Supreme Court. At the April 2016 hearing, a ground of appeal was whether VCAT erred in the interpretation of Section 68 and had taken into account irrelevant considerations. In deciding VCAT had done so, the Supreme Court had this to say about Section 68: Sorry state: Landlords have a duty to ensure properties are in ‘good repair’ and maintained that way.

The duty imposed on a landlord to ensure rental premises are in good repair is strict and absolute. It requires a landlord to identify and rectify any defects of which they are aware or ought to be aware; The strict obligation imposed is consistent with the word ‘ensure’ in the section which court decisions over many years suggest is the equivalent of ‘make sure’; ‘Good repair’ means ‘tenantable repair’ or ‘reasonably fit and suitable for occupation’. It cannot ordinarily be qualified by the state of repair at the start of a tenancy, regardless of the state of repair. The obligation to maintain in ‘good repair’ creates a requirement to put premises in ‘good repair’ in the first place. The obligation cannot be watered down by charging low rent; The suggestion a landlord’s obligation may be qualified by either the condition of the premises when the tenancy starts or the level of rent charged is inconsistent with the legal duty to take reasonable care to put, and then keep, rental premises in a safe state of repair; The question of whether putting premises in good repair amounts to an upgrade is not relevant to whether they are being maintained in good repair. In many cases it will be inevitable carrying out repairs will upgrade the premises; The Residential Tenancies Act does not allow landlords and tenants to contract out of their RTA responsibilities. It invalidates any term of a tenancy agreement that tries to exclude, restrict or modify the application of the Act to the agreement, or the exercise of a right under the Act. The decision is likely to remain the leading case on residential landlords’ responsibilities for the state of repair and condition of rental properties for many years to come.

It is also a heads-up for residential property managers. The message is: be particularly careful about, and specify precisely in your managing authority, your responsibilities for property maintenance and repairs.

1. S ection 68 (1) provides: “A landlord must ensure that the rented premises are maintained in good repair.”

36

The Estate Agent ❘ March 2018

Best Practice

New ground rules: Court interpretation has stymied the early release of deposits.

Early release of deposits in chaos Court decision is bad news for Victoria’s real estate market

By REIV Corporate Solicitor Peter Lowenstern

A

recent decision of the Victorian Supreme Court1 has very likely sounded the legal death knell of early release of deposits in Victoria’s real estate market.

Early release of deposits has been an integral part of the real estate scene since August 1980. In the ensuing 37 years it has served Victorians well, saving them untold millions by avoiding bridging loans when selling properties and buying others. Now, that may be a thing of the past.

How did this happen? The litigation that brought the scenario about involved a complicated, commercial property deal in Melbourne’s CBD. The seller rescinded the deal, worth millions, when the buyer failed to settle on time.

In the ensuing court case, one of the questions was whether a special condition of the contract which involved termination of a lease was – in the quaint words of the Sale of Land Act2 – a “condition enuring for the benefit of the

purchaser …”, thus affecting the early release of the very substantial deposit.

The quaint wording describes a requirement to be met before there can be an early release of a deposit. It has been controversial from the time it appeared in December, 1980. What does it mean? While opinions abounded, no one could be quite sure. Now, 37 years on, the Supreme Court has provided the

The unanticipated outcome is there can be no early release of deposits in Victoria answer. It’s not welcome news.

In deciding the special condition was one “enuring for the benefit of the purchaser” the judge went to considerable length in explaining conditions in contracts. Basically, they fall into one of two categories: contingent conditions or promissory terms.

Promissory terms are either essential, intermediate or a warranty. An essential term is so important that if broken, the contract can be terminated. That’s where the unwelcome news comes into it.

Victorian real estate contracts invariably have an essential, promissory term requiring the seller to hand over title documents to the buyer at settlement3. And, even if the term is not written into the contract, it is so fundamental the law will imply it is included. Under the Sale of Land Act it is a “condition enuring for the benefit of the purchaser”. If the title documents are not handed over, the buyer can terminate the contract.

The unanticipated outcome is there can be no legal early release of deposits in Victoria, as things stand at present.

The essential requirement for it to occur – there is no “condition enuring for the benefit of the purchaser” – simply cannot be met.

It is naïve to think the early release of deposits will now cease. After all, how many sales are terminated because the seller is unable to hand over their title at settlement? But, until settlement arrives you simply do not know.

As an agent, you cannot ignore your statutory stakeholder obligations because you think it unlikely your vendor will not be able to hand over their title, come settlement time. Be mindful being a stakeholder means: retaining buyers’ deposits in your trust account until sales settle; early release of deposits cannot be ‘back-doored’ by transferring them to their vendors’ solicitors, conveyancers or other agents acting for their vendors; releasing deposits to their vendors, when contracts end because buyers default; and returning deposits, when contracts end because vendors default.

The Sale of Land Act nullifies arrangements made with an eye to avoiding stakeholder obligations. If there is to be effective early release of deposits, the Sale of Land Act will have to be amended.

1. Aurumstone Pty Ltd v Yarra Bank Developments Pty Ltd [2017] VSC 503 (29 Aug. 2017) 2. Section 27 (2).

3. Eg. The prescribed contract of sale of real estate, general condition 10.1 (b)(i).

The Estate Agent ❘ March 2018

37

Vale

Mornington ‘maestro’ mourned The Mornington Peninsula real estate community lost a valued and respected member with the passing of David Gardener.

Starting in the industry in the mid-1960s, David was soon offered a partnership by E. Jacobs and Lowe – a well-established and respected agency in Mornington. He became known as ‘the maestro’ auctioneer on the Mornington Peninsula with agents from across Victoria coming to watch his auction strategies.

David was closely involved in local REIV branch activities, including organising branch dinners and auction competitions.

In the early 1980s he was made a Fellow of

David Gardener October 5, 1933 – July 25, 2017 REIV 50-year Member the Institute – one of only a few awarded at the time.

“David was fondly remembered by all that worked with him, particularly for

his professionalism, good humour and meticulous attention to detail,” recalls current Jacobs and Lowe Director Peter Skewes.

After retiring from E. Jacobs and Lowe in the early 1990s, David began a ‘second career’ in real estate, teaching the Agent’s Representative and licensed courses at both Chisholm Institute and RMIT. He taught until retiring to Tasmania in 2003, although he continued as an accredited examiner for Victorian real estate courses, setting and marking examination papers until completely retiring at 77.

His son James says it wasn’t unusual for David to wake at 3am, make a cup of tea, and settle down to mark a batch of exam papers – often going back over a paper multiple times to find an extra mark to get a student ‘over the line’.

“The family were thrilled to receive David’s REIV 50-year member certificate just days before his passing,” says James.

Alexander leaves valuable legacy Barry Alexander was a man who valued and nurtured relationships, this was proven in the way he operated his Bright First National agency by the motto ‘do the right things where it counts’.

Barry Alexander September 28, 1954 February 4, 2018 38

The Estate Agent ❘ March 2018

The real estate industry and north-east community of Bright are mourning the loss of First National Principal, Barry Alexander.

A passionate Collingwood supporter, Barry was also known as the MC or “wordsmith”.

In 1987, Barry left his corporate life and career at SEC in Melbourne to relocate to Bright, after initially discovering the picturesque town on his honeymoon.

He took the plunge and bought the Hummingbird Coffee Shoppe with his wife Kay, and it was through coffee that Barry met the owner of the local real estate agency, Fred Neal. Fred later convinced Barry to sell up and embark on a career in real estate – an opportunity Barry welcomed with opened arms.

Barry and Kay bought the agency in December 1993 and the Alexander’s First National Real Estate sign was erected, one which is still displayed with pride 24 years

later. It was clear that Barry loved the real estate industry. As a regular attendee at First National Annual Conventions, he became an REIV member in 1994 before becoming President of the REIV Nth Eastern Country Branch. From 2003 – 2005, Barry played an integral role in the Murray Alpine Division as Vice Chair and later taking over the reigns as Chair during 2006/2007.

Outside of real estate, Barry was passionate about the Bright community and involved in numerous organisations and sporting clubs. Over the years he was President of the Lions Club and Bright Football Club, active on committees and a proud sponsor of local clubs and events.

With wife Kay, sons Regan and Cameron, and daughters-in-law Priscilla and Leah steering the ship at Alexander’s First National Real Estate, Barry’s legacy lives on. He will be remembered as a devoted husband and family man, respected businessman, loyal friend and an honest and reliable community worker.

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As a licensed estate agent to benefit from your past experience you can act on behalf of a ‘Oditi voluptat dolestiores • Thislapnis training is delivered with Victorian and qui dite nemporessit laccaessequi vendor, landlord, purchaser Commonwealth Government funding. tessed quid est quod que volupta or tenant in Victoria to sell,tectatur’ Eligibility criteria apply. lease or manage real estate The REIV believes in continually enhancing the skills and expertise of people working in the industry. or business. *Disclaimer: Successful completion of this program will provide you with the Certificate IV qualification required to apply for a real estate licence in Victoria.

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Find out more at www.reiv.com.au/takecharge Real Estate Institute of Victoria RTO 4042 T 03 9205 6666 The Estate Agent ❘ March 2018

39

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