What you need to do to be ready for the Industry Reforms
The property industry reforms and changes to the residential tenancies legislation come into effect on 23 March 2020. Find out what you need to do to make both yourself and your agency ready for these once-in-a-generation changes.
Renewal of certificates and licences
If you hold a certificate or a licence to work in the property industry, the industry reforms will change the way you renew your certificate or licence.
Make sure your certificate or licence is current as at 20 March 2020. If your renewal date is around this time, make sure you renew promptly.
You MUST submit your Application for Renewal or Restoration and pay the fee to NSW Fair Trading before 20 March 2020.
Are you a Certificate of Registration holder?
Under the new laws a Certificate of Registration is issued as a one-off certificate for a period of 4 years.
Within the 4 years granted, the certificate holder will be required to successfully complete the course of study to gain the qualification to apply for a Class 2 Licence. If the certificate holder does not obtain their Class 2 Licence within 4 years, the certificate will expire, and the holder cannot re-apply for a certificate for 12 months.
For current certificate holders you will be automatically granted a certificate to 23 March 2024 and not charged any further fees for the extension of your certificate.
For more information about real estate and property reforms visit the NSW Fair Trading website.
To understand which certificate or licence you will be transitioning to and find out the answers to the most frequently asked questions.
Important! If your certificate requires renewal on or before the 22nd March 2020, is not renewed/restored by 5pm on 20 March 2020 you will not be able to restore it, may not be eligible to work in the industry you will need to reapply and you may need to upgrade your to the new training requirements.
Have your licence details changed?
Licences will no longer be limited to a one-year term. You will have the choice to renew your licence for three- and five-year terms.
If your details have changed and need to be updated on your licence or certificate of registration, please complete the relevant form to correct your details and email it to the NSW Fair Trading Licensing team at firstname.lastname@example.org
Updates to the Licensee in Charge Nomination Form
An individual who holds a Class 1 Licence and wants to be recorded at NSW Fair Trading as the Licensee in Charge will need to nominate as the Licensee in Charge of the business as the licensee in charge (LIC) where:
- An individual carries on business under a Class 1 Licence, or
- A corporation operates under a corporation licence
From 23 March 2020 there must be a LIC for the business.
A corporation could either employ a single LIC for the entire business or appoint several licensees in charge for different parts of the business. However no more than one LIC can be in charge of the same part of the business.
New rules of conduct for agents and assistant agents
The real estate and property reforms introduce new rules of conduct which will apply to agents and assistant agents from 23 March 2020.
These new rules include:
- rental and sales money must be separated and deposited into different trust accounts
- rental monies received must be disbursed to the landlord at least monthly, unless special arrangements apply
- potential conflicts of interest are more tightly governed, with a $60 limit on the value of gifts and benefits that could give rise to a conflict.
For further information on the rules of conduct see the recent law reforms page on the Fair Trading website.
What you can do as Assistant agents?
From 23 March 2020, assistant agents may not enter into an agency agreement. This means that only a licensed agent can sign an agency agreement with a vendor or landlord.
We’ve been asked by some agents if these changes will prevent assistant agents from carrying out property inspections and preparing an inspection report, whether that be for sales or property management.
To clarify, there is nothing in the new laws that will prevent assistant agents from being able to continue to perform these duties.
However, the licensee entering into the agency agreement will need to ensure that the inspection is carried out properly and be satisfied that the contents of the inspection report are true and accurate.
For further clarification about the functions of assistant agents see the recent law reforms page on the NSW Fair Trading website.
New supervision guidelines
NSW Fair Trading have published new supervision guidelines which will come into effect on 23 March 2020. These guidelines will be issued under section 32 of the Property and Stock Agents Act 2002 (NSW) (which, prior to 23 March 2020, was called the Property, Stock and Business Agents Act 2002 (NSW)) and relate to the following topics:
- Licensee in Charge
- Requirement to prepare operational procedures
- Trust account procedures
- Identification check for the purposes of fraud prevention
- Ongoing dealings with parties to an agency agreement
- Sale of residential property – selling price and other representations
- Complaint handling procedures
- Employee supervision
- Gifts and benefits register
- Record keeping
For further clarification on these topics please download a copy of the NSW Fair Trading supervision guidelines here.
NSW Fair Trading also has a checklist for fraud protection. Click here to download a copy of the guidelines and scroll down to the checklist at Attachment 1.
Changes to residential tenancy laws
Managing agents need to be aware of the new residential tenancy requirements and know their responsibilities when managing rented properties in NSW. Visit NSW Fair Trading’s website for information on key changes to the residential tenancy laws.
New smoke alarm requirements
One of the key changes includes new obligations on landlords to ensure that smoke alarms installed in rented properties are working.
- Landlords and agents must ensure smoke alarms are repaired or replaced (within 2 business days). This includes replacing a battery
- Landlords or agents must:
- check smoke alarms every year to ensure they are working
- install or replace removable batteries every year (or for lithium batteries, in the period specified by the smoke alarm manufacturer)
- replace smoke alarms within 10 years of manufacture, or earlier if specified by the smoke alarm manufacturer.
- To inspect or assess the need for a smoke alarm repair or replacement, landlords or agents must give the tenant at least 2 business days’ notice.
- To carry out a repair or replacement of a smoke alarm, landlords or agents must give the tenant at least 1-hours’ notice.
Some exceptions apply to residential property in a strata scheme.
More information on the smoke alarm requirements, including new requirements for landlords and tenants, who can repair or replace a smoke alarm or change a battery, and requirements relating to properties in strata schemes is available on the NSW Fair Trading website.
These are significant changes to agency practice and all agents must be ware of these changes and have positioned themselves to comply with the new requirements – it will come as no surprise that penalties apply for non-compliance.
We encourage you to attend the Roadshow as this will keep you abreast of all the changes and will equip you with the skills to thrive in 2020. Register for the Roadshow today!