The Estate Agent - April 2017

THE JOURNAL OF THE REAL ESTATE INSTITUTE OF VICTORIA

REIV.COM.AU

AUCTION RECORDS Strong start to year MEMBER NEWS Business Brokers raise $16,000 for charity

THE ESTATE AGENT

APRIL 2017 VOLUME 81 NO.1

Rent rolls

The backbone of agencies

Rules to curb underquoting CAV explains reforms

Flying solo

Stepping out on your own

Leading the way Western Bulldogs coach Luke Beveridge and Kmart CEO Guy Russo on effective leadership

ï‚•

Contents

20 ‘You can’t become a high‑performing team unless you see the good – and the potential – in your people.’

Luke Beveridge, Western Bulldogs coach

Cover story INDUSTRY EXPERTS SHARE TIPS Speakers at REIV’s Ignite Leadership Exchange offer insights into inspiring their teams

Features

12 14 16 18 22

Rules and regulations to curb underquoting New laws to strengthen price quoting legislation will come into effect from May 1

Reforms to damage market Proposed changes to the Residential Tenancies Act fail to balance the rights of landlords with those of tenants

Rent rolls: adding value to agencies Solid rental portfolios are the key to success, many agencies find

Awards honour nation’s best REIA’s 12th National Awards for Excellence recognise the industry’s high-achievers

12

A dream calling for Sam A work experience stint was the beginning of a path to career success

18

22 The Estate Agent ❘ April 2017

3

Contents

5

President’s Report

7

CEO Report

9 Bulletin 14 Policy 24 Market Update 26 Profile 28 Training 32 Events Calendar 33 Member News

09

37 Best Practice

14

24

38 26

EA THE ESTATE AGENT

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

4

The Estate Agent â?˜ April 2017

Publisher REIV 335 Camberwell Rd, Camberwell, Victoria 3124 Editor Jasmine Walters jwalters@reiv.com.au

Advertising Rick Fiedler rfiedler@reiv.com.au 9205 6654

Cover image AAP

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 Xxxxxxxxx Joseph Walton President REIV

Strong start for auction market while future challenges loom

In demand: The state’s private sale and auction markets experienced one of its strongest starts in recent years with multiple auction records falling.

V

ictoria’s auction market had one of its strongest starts in recent years with multiple auction records falling in February and March.More than 3230 homes went to auction in February with close to 2580 selling under the hammer – the highest number of auction volumes and transactions for the month.

Buyer and vendor confidence was also evident in March with a record 3441 homes sold at auction. The metropolitan Melbourne clearance rate is sitting at 80 per cent for the year‑to‑date, which is even higher than the same period in 2015.

The strong start to the year followed a buoyant December auction market when almost 3900 homes were auctioned and 2954 sold – a record for December both in terms of volumes and sales.

The state’s private sale market has also been performing strongly in 2017 with the median days on market for

metropolitan Melbourne their lowest since 2010, at just 29 days in February.

Regional Victoria also experienced a solid decline in the number of days a home took to sell with a median of 51 days on market in February, down from 70 days for the same period last year.

‘The industry is facing disruption from new low-cost entrants and find‑an-agent comparison sites.’

While the first few months of 2017 have been busy for members, so too has it been a productive period for the Institute. We welcomed Gil King to the role of CEO in January, and given his strong advocacy background – both at the HIA and in Government – the Board and I are confident he is the best person to lead the REIV. It is a challenging period for the real estate industry with the Andrews’

Government undertaking the biggest review of property legislation in the state’s history. Proposed changes to five key pieces of property legislation will significantly impact on how property is bought, sold and leased – and the role agents play in these transactions.

The industry is also facing disruption from new low-cost entrants and find‑an-agent comparison sites. At the REIV’s annual two-day strategic planning session earlier this year, the Board and senior management team focused on how best to address these challenges in the years ahead. As part of our commitment to ensuring we remain relevant in a changing marketplace, the REIV will continue to deliver value to our members and represent their interests across multiple platforms.

Increasing professionalism across the industry remains at the forefront of the REIV and it was encouraging to see a high level of member engagement at the Continued on page 6

The Estate Agent ❘ April 2017

5

Xxxxxxxxx Report President’s

Continued from page 5

Ignite Leadership Exchange in March.

The event featured outstanding keynote presentations by Western Bulldogs coach Luke Beveridge and Kmart CEO Guy Russo, who have both turned around the fortunes of their respective organisations. As many attendees would agree, their insights into leadership, culture and change can be applied to real estate agencies and the broader industry. An overview of the event is available on page 20 of this issue.

It was also pleasing to see four Victorians recognised at the REIA’s Awards for Excellence. Former REIV President Neville Sanders received the prestigious REIA President’s Award, Karli Dunham was named Business Broker of the Year, Kristian Etherington was awarded the Commercial Property Manager of the Year title, and CBRE Victoria was inducted into the REIA Hall of Fame after winning the Commercial Agency of the Year Award in 2014, 2015 and 2016.

Congratulations to all winners for their success at both state and national levels.

Leaders: REIV President Joseph Walton, REIV CEO Gil King, AFL coach Luke Beveridge and Kmart CEO Guy Russo.

The REIV’s annual senior, novice and commercial auction competitions will begin next month. These competitions are an excellent opportunity for experienced and novice auctioneers to test their skills. This year’s Senior Auctioneer of the Year competition will trial a new format with the event held over two days in May and the winner announced at the REIV Awards for Excellence in October.

Finally it’s important to announce the recent passing of Past President Kris Callaghan. On behalf of the Board, I’d like to extend our deepest sympathies to his family and friends.

A highly respected and knowledgeable member, Kris served as REIV President in 1970‑1971.

A Life Member of the Institute, he will be greatly missed by all who knew him.

Selling your rent roll?

Talk to the experts!

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

Why not take the time now to have a confidential chat about the real value of your rent roll. We can then start mutually planning your exit sales strategy.

We have some genuine buyers ready right now to negotiate confidentially and discreetly.

BDH SOLUTIONS ROSS HEDDITCH

Ross Hedditch Telephone: 9380 5999 Mob: 0418 321 952 rhedditch@bdhsolutions.com.au bdhsolutions.com.au 6

The Estate Agent ❘ April 2017

REIV 1

CEO Xxxxxxxxx Report GIL KING CEO REIV

Industry faces legislative overhaul with multiple reviews

I

am pleased to write my first column for the magazine and to introduce myself as the new CEO of the REIV. It is exciting to lead the Institute at a time when the property industry is driving economic growth in Victoria.

The challenges and opportunities for the REIV are many. I am confident that my previous experience with the Housing Industry Association and as a regulator will provide a valuable resource to the Institute and its membership over the coming years.

One thing that remains a constant is the incredible experience of engaging with the membership base and hearing the issues at a grass‑roots level. I look forward to future events and opportunities to have those important conversations.

The real estate industry is an issues‑rich environment at present with multiple legislative reviews underway.

This includes the Consumer Property Law review, which encompasses the Sale of Land Act 1962, Estate Agents Act 1980, Owners Corporation Act 2006 and Conveyancers Act 2006.

While this review is ongoing with the final Options Paper already released, an amendment to the Estate Agents Act is set to come into effect on May 1, 2017.

The Estate Agents Amendment (Underquoting) Bill 2016 will dictate how agents quote and market residential property. The changes, which include the provision of an information fact sheet to buyers, will have one of the biggest impacts on agents – and the industry – in the past decade. Our industry is under incredible scrutiny at the moment with a strong market increasing buyer and vendor expectations of agents.

The new price-quoting legislation will be some of the most comprehensive in Australia and it’s important we continue to lead the way in improving the reputation and professionalism of our industry.

Advocacy focus: The real estate industry is under incredible scrutiny with two reviews underway.

It is unfortunate that we are fast approaching the introduction of this legislation without clear answers to

‘It’s important we continue to lead the way in improving the reputation and professionalism of our industry.’ many of the questions the REIV and its members are asking of Consumer Affairs Victoria. Of particular concern is the interpretation of ‘written offer’ currently being espoused, which we believe adds an unnecessary layer of bureaucracy to the process. Further details on price-quoting changes are available on page 12 of this issue.

The review of the Residential Tenancies Act is also ongoing with a comprehensive Options Paper released in January. The paper presented more than 100 options for consideration with the overwhelming majority of proposed reforms favouring tenants.

In conjunction with Consumer Affairs Victoria, the REIV held a number of consultation sessions across the state, which were well attended by members and their landlord clients. The REIV has been very vocal with our concerns and continues to meet with ministers from the Government and the Opposition.

It is crucial that members support our campaign to stop these damaging reforms, particularly in relation to proposed changes to termination provisions. The REIV has created a petition against the proposed reforms and I encourage members to sign it and distribute it to your landlord clients.

The petition can be found at reiv.com.au/rtareview. More information on the RTA review is available on page 14 of this issue.

The REIV is also working alongside Government in developing draft legislation to provide for long-term leases of more than five years. While the Institute supported the concept in principle, it is imperative that Continued on page 8

The Estate Agent ❘ April 2017

7

Xxxxxxxxx CEO Report

Continued from page 7

any future legislation has adequate exit provisions.

Land tax is another key policy item that will be addressed in the coming months with strong member views on the subject. The REIV has already raised the issue with a number of Opposition members and will continue to increase awareness of its significant impact on investors in the media.

In the year ahead the Institute will focus on improving our engagement and communication with members.

As part of this commitment, the REIV has begun work on a number of digital projects including updates to Propertydata.com.au. The refreshed offering includes an iPad/iPhone app which will allow agents to generate CMA reports on the road as well as access the REIV’s latest market insights.

The Institute will also be simplifying and streamlining property information available on the REIV website, including greater user functionality.

Policy agenda: The impact of land tax will be addressed in the coming months.

Frequent online webinars will also be integrated into our training offering, particularly around legislative updates.

With an Options Paper on reform of

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

8

The Estate Agent ❘ April 2017

the Estate Agents Act released earlier this month, another roadshow tour of all Victorian divisions is also in the pipeline.

Bulletin

NEW SUBURBS UNDERWAY

FAMILY VIOLENCE IN VCAT

One of the recommendations arising from the Royal Commission into Family Violence relates to ensuring victims of family violence are aware of their right to apply for a new tenancy.

Under Sections 233A, 233B, 233C and 233D of the Residential Tenancies Act, victims of family violence are able to make an application for a new tenancy, make an application to terminate the existing tenancy agreement and require the landlord to enter into a new agreement with them.

In addition, the Tribunal determines the parties’ liability under the terminated tenancy agreement.

The Victorian Government has released a VCAT family violence brochure that property managers should familiarise themselves with.

VPA

Within the next two years the Victorian Government will rezone 100,000 housing lots, creating 17 new suburbs in Melbourne’s key growth zones. The new suburbs in Melbourne’s west are Quandong, Tarneit Plains, Kororoit, Mt Atkinson and Plumpton.

North-west of the CBD will be Lancefield Rd Sunbury and Sunbury South, while Minta Farm, Pakenham East and McPherson will be established in the south-east. In Melbourne’s north, new suburbs include Lindum Vale, Beveridge North West, Beveridge Central, Donnybrook and Woodstock, Wollert and Northern Quarries.

CHANGES TO RESIDENTIAL ZONING ANNOUNCED

The Victorian Government’s Plan Melbourne has been amended with substantial changes to suburban residential zones and mandatory maximum height limits announced.

Under new rules, there will no longer be a cap on the number of dwellings per block; however garden space will be a mandatory percentage.

Blocks between 400-500sqm now require a 25 per cent minimum garden area, blocks between 501-600sqm require 30 per cent while blocks larger than 650sqm must have a 35 per cent

garden area. Mandatory maximum height limits have also been lifted in Melbourne’s middle ring, from nine metres to 11.

STAMP DUTY CONCESSIONS FOR FIRST HOMEBUYERS

For more information visit vcat.vic.gov.au/ renting

RED TAPE REDUCTION

The Victorian Planning Authority has extended its Streamlining for Growth program for another three years, simplifying council subdivision processes and reducing application timeframes for residential and employment land. The program is designed to ensure planning projects can progress without unnecessary delays.

The Victorian Government has announced a range of first homebuyer initiatives, effective 1 July 2017.

These include the removal of stamp duty for homes – both new and established – under $600,000 while scaled stamp duty reductions will also apply for homes between $600,000– $750,000. The First Home Owners Grant is being doubled, from $10,000 to $20,000, for buyers of new homes

in regional Victoria valued under $750,000. The increase will apply until 30 June 2020, when the FHOG scheme will be reviewed. There are also significant changes for off-the-plan concessions, which will no longer apply to residential investment and commercial properties.

For more information visit vic.gov.au/affordablehousing The Estate Agent ❘ April 2017

9

Bulletin

VACANT RESIDENTIAL TAX

Property owners in Melbourne’s inner and middle rings will be subject to a Vacant Residential Property Tax if they leave their property vacant.

Effective 1 January 2018, the tax will be calculated as one per cent on the capital improved value of the taxable property.

More information is available at reiv.com.au/news/ policy-issues

FREE INTERPRETER SERVICE AVAILABLE TO AGENTS

HODGES’ GLOBAL AWARD Hodges has been recognised at the prestigious New York Design Awards, taking out gold and silver in the ‘advertising – print’ and ‘graphic design – illustration and type’ categories. One of Melbourne’s oldest real estate agencies, Hodges is the only Australian agency to be internationally recognised in this way for marketing designs.

PDOL SITE Estate agents working with clients from a non-English speaking background can now access a free interpreter service. Provided by the Department of Social Services, the service is available to licensed agents working in residential property management and sales. Clients must be primarily Australian citizens or permanent residents.

Agencies are required to register online at tisnational.gov.au

RTA AMENDMENT FOR LONG-TERM LEASES

The Residential Tenancies Act (RTA) is being amended to include leases of longer than five years. CAV is developing a standard tenancy agreement in consultation with the REIV, which will be implemented in 2018. More information on the RTA review, currently underway, is available on page 14 of this issue.

VCAT CHANGE OF HEARING VENUES All VCAT Residential Tenancies List hearings in postcode 3977 have moved back to Frankston, from Dandenong, now that pressure has eased at this venue through the extra day a fortnight at Dromana. Applications with rental addresses in the 3977 postcode are affected and include Skye, Cranbourne, Sandhurst, Junction Village, Cranbourne South, Cranbourne West, Cranbourne North and Cranbourne East. VCAT rental applications for postcodes 3578 and 3762 – both in the Wandong/Kilmore region – have now been reallocated to be heard at Seymour. These hearings had previously been allocated to Melbourne.

For details, visit vcat.vic.gov.au/contact-us

10

The Estate Agent ❘ April 2017

PropertyDATA.com.au has rebranded and refreshed its digital service offering, delivering more responsive and customised data for users. Members can now generate CMA reports on the road using the new iPhone/iPad app, leveraging the REIV’s full suite of premium market intelligence.

Stay ahead of the compliance curve

PropertyData subscribers have access to a simple template to help agents easily select three comparable sales and produce the Statement of Information as required by the legislation.

Not a subscriber?

Contact us on 1300 303 383 or email propertydata@propertydata.com.au

PropertyData.com.au is a wholly owned subsidiary of the Real Estate Institute of Victoria Ltd.

Want to know more?

Contact our local customer service team 1300 303 383 | support@propertydata.com.au | propertydata.com.au

Wholly owned by

Quoting

New laws to strengthen price quoting legislation will come into effect from May 1.

Rules and regulations to curb underquoting

By Consumer Affairs Victoria

T

he Victorian Government is introducing changes to the Estate Agents Act 1980 to strengthen price quoting legislation in Victoria.

Effective May 1, 2017, the new laws will require agents selling residential property in Victoria to provide certain information about property prices to sellers and buyers.

Agents entering into a sales authority on or after 1 May must: Provide an estimated selling price that is reasonable and takes into account three comparable sales, unless this information is not available in the specified times and locations; and Prepare a Statement of Information and make it available at open for inspections, upon request from potential buyers and with any internet advertising.

If the sales authority was signed before May 1, agents are not required to prepare a Statement of Information. However, agents advertising the likely selling price of a property for sale on or after May 1 –

regardless of when the sales authority was signed – must use a single amount or a price range of up to 10 per cent, and must not use any qualifying words or symbols.

AGENT RESPONSIBILITIES UNDER THE NEW LAWS From May 1, agents will have new obligations relating to: The estimated selling price; Comparable property sales; A Statement of Information for prospective buyers; and Advertising prices, terms and symbols.

There are also new penalties for agents who fail to comply with the new legislation.

ESTIMATED SELLING PRICE An agent’s estimated selling price must: Be reasonable; and Take into account the sale prices of the three properties that the agent considers to be the most comparable to the property for sale, unless the agent reasonably believes

New laws: Agents will have new obligations relating to property prices. Credit: Consumer Affairs Victoria

12

The Estate Agent ❘ April 2017

that fewer than three properties were sold within the specified times and locations.

The estimated selling price must continue to be: Included in the sales authority in the approved form; and Either a single price – for example, $500,000 – or a price range of up to 10 per cent – for example, $500,000 to $550,000.

If the estimated selling price changes because it ceases to be reasonable, agents must inform the seller in writing and update the sales authority and all advertising – if the advertising is based on the estimated selling price.

COMPARABLE PROPERTIES A comparable property is one that is in a similar condition, standard and location to the property for sale.

It must have been sold in the last: Six months and be within two kilometres of the property for sale (if the property for sale is in the Melbourne metropolitan area); or 18 months and be within five kilometres of the property for sale (if the property for sale is outside the Melbourne metropolitan area).

When selecting the most comparable properties, agents must take into account the: Standard and condition of the properties; Location of the properties; and Date of sale of the properties.

STATEMENT OF INFORMATION Agents must prepare a Statement of Information for each residential property offered for sale.

The Statement of Information must be: In the form approved by the Director of Consumer Affairs Victoria;

Quoting

Pricing rules: When marketing a property for sale, agents may advertise the price as a single figure or a price range of up to 10 per cent.

Displayed at all open for inspections; Included with online advertising; and Given to a prospective buyer within two business days of a request.

The Statement of Information must include: An indicative selling price for the property – this may be a single price or a price range of up to 10 per cent; Details of the three most comparable properties, including the address, date of sale and sale price; or – if you did not take into account three comparable properties when setting the estimated selling price – a statement outlining that you reasonably believe there are fewer than three comparable sales within the prescribed period; and The median house or unit price for the suburb or locality – this figure must be for a period of between three and 12 months, and not more than six months old.

The indicative selling price is a price that is not less than: The agent’s estimated selling price; The seller’s asking price (if provided); or The price in any written offer rejected by the seller because it was too low.

If the indicative selling price changes, for example because the agent’s estimated selling price or the seller’s asking price changes, agents must update it in the Statement of Information.

ADVERTISING PRICES, TERMS AND SYMBOLS When marketing a property for sale, agents may advertise the price as a single figure or a price range of up to 10 per cent.

Agents must not use any words or symbols to qualify the price, such as ‘offers above’, ‘from’, or ‘+’.

If the agent’s estimated selling price changes, or the seller rejects a higher written offer because the price was too low, agents must remove or update:

Online advertising within one business day; and All other advertising as soon as possible.

ENFORCEMENT AND PENALTIES If agents do not comply with the new laws, they risk a penalty of more than $31,000 (200 penalty units).

For more serious offences – such as setting an unreasonable estimated selling price, or advertising a property below the estimated selling price – agents may also lose any commission received for the property sale.

The new underquoting laws complement the requirements of the Australian Consumer Law. Agents must continue to make sure that any pricing information provided is not misleading, or is not likely to mislead or deceive sellers and buyers.

For more information, visit the Understanding Underquoting page on CAV’s website.

The Estate Agent ❘ April 2017

13

Policy

Reforms to damage market Proposed changes to the Residential Tenancies Act fail to balance the rights of tenants with those of landlords

A

s part of its ongoing review of the Residential Tenancies Act, the Victorian Government released a comprehensive Options Paper titled Heading for Home in early January.

The Options Paper follows seven issues papers in the past 18 months – which the REIV responded to individually – as well as multiple Stakeholder Reference Group meetings late last year.

In forming our response to the Options Paper, the REIV held multiple consultation sessions across the state with property managers, landlords and senior Consumer Affairs representatives.

The REIV also surveyed more than 3800 landlords and property managers in February, gauging supply-side stakeholder views on a number of the proposed reforms. With more than 75 per cent of the 141 options favouring tenants and/ or rooming house residents, the REIV believes the paper fails to balance the rights of tenants with those of landlords.

14

The Estate Agent ❘ April 2017

Many of the proposed options will increase landlord costs and involve the loss of a number of important landlord rights.

While the REIV accepts reform of the Act is necessary, further consultation and amendments are required before any proposed legislation is drafted.

Outlined below are proposed options which are key areas of concern for members and landlords: Providing tenants with the right to extend fixed-term lease agreements for a subsequent period without approval from landlords. This option would severely reduce a landlord’s

CONSUMER PROPERTY LAW REVIEW – SALE OF LAND The second Options Paper in the Consumer Property Law review was released for public consultation in March.

Sale of Land and Business: Options for Reform looked at modernising the Sale of Land Act 1962 with reform targeting online auctions, contracts of sale and the removal of terms contracts and rent-tobuy arrangements for residential property.

Of concern are proposed changes to Section 27, including repealing the process

for early release of deposits. In our submission, the REIV has strongly opposed changes to Section 27. The Options Paper also considers relocating small business statement provisions to the Sale of Land Act and reviewing its contents to ensure information is relevant to prospective buyers. The final Options Paper in this review, which relates to the Estate Agents Act, was released earlier this month with submissions closing May 16.

Policy

right to end a lease at the conclusion of a fixed-term tenancy.

Introduction of additional minimum standards for rental properties.

While minimum standards for Victorian homes are already set out in the national building code, further minimum standards for rental properties would significantly increase costs for landlords, who would also be subject to a range of restrictions/ penalties if their rental property did not comply with minimum standards.

Removal of the Notice to Vacate for ‘no specified reason’, resulting in the loss of a valuable landlord right available in every other major Australian state.

Providing tenants with the right to make non-structural modifications to the rental property without landlord consent. This option does not require the tenant to restore the property to its original condition and will significantly impact on the value of the asset as well as the ability to relet or sell the property in a timely manner.

Reducing the time for landlords to dispute an urgent repair from 14 days to seven days. This proposed option would place unnecessary pressure on property managers and landlords when tenants can already undertake urgent repairs up to the value of $1800.

Requiring landlords to lodge a prescribed bond as security against future claims for non-performance or repairs, or failure to reimburse a tenant for repairs within seven days. The REIV considers this to be unnecessary given tenants have sufficient recourse through VCAT, which can order rent to be paid into a special account until repairs have been carried out or repaid.

An increased range of remedies for breach of repairs duty including prohibiting the landlord from charging market rent, freezing rental increases and prohibiting reletting. This is despite repairs only representing a minor number of VCAT cases in the past year.

Requiring landlords to provide their address to tenants for the provision of service documents. The REIV believes this option poses significant safety concerns for landlords.

Limiting the frequency of open for inspections and requiring landlords to compensate the tenant when more than two inspections are held per week.

‘This will result in significant expense for landlords with no incentive for the tenants to remove items quickly.’

New procedures for storage of abandoned goods with landlords/ property managers required to store all goods regardless of value for 28 days.

This will result in significant expense for landlords with no incentive for the tenants to remove items quickly.

The REIV continues to lobby the Victorian Government regarding our concerns and has urged members – and their landlord clients – to support this campaign by writing to their local MPs. For more information on the RTA Options Paper or to support the REIV campaign visit reiv.com.au/news/policy-issues/rta-review

Seeking difference makers.

REIV SURVEY OUTCOMES ❚ 80 per cent of respondents expect

rents to rise if landlord costs increase

❚ 17.5 per cent of landlords will exit the

market if landlord costs increase

❚ 88 per cent of respondents believe

landlords should retain the right to serve a Notice to Vacate for ‘no specified reason’ ❚ 91 per cent of respondents do not support increasing the Notice to Vacate for ‘no specified reason’ from 120 days to 182 days ❚ 84 per cent of respondents do not support tenants being able to keep a pet in a rental premises without landlord consent ❚ 14 per cent of respondents would support tenants being able to keep a pet in a rental premises if an additional bond was paid by the tenant ❚ 98 per cent of respondents do not support tenants being able to extend fixed-term tenancies without landlord consent or consultation ❚ 99 per cent of respondents do not support tenants being able to make modifications to a rental property without landlord consent ❚ 80 per cent of respondents do not believe landlords should be required to offer the tenant an option to enter into a payment plan when in arrears ❚ 50 per cent of respondents believe the proposed reforms will be extremely damaging for the market ❚ 43 per cent of respondents believe the proposed reforms will be beneficial for tenants and harmful for landlords

Our purpose is to create a place that facilitates personal growth.

To do this we’ve created a professional culture based around a core set of support areas. World class training, marketing support, recognition programs, leadership and technology. careers@obrienrealestate.com.au

franchise@obrienrealestate.com.au

1 3000 OBrien

obrienrealestate.com.au/franchise-opportunities

The Estate Agent ❘ April 2017

15

Property Management

Rent rolls: adding value to agencies

A

rent roll is often the backbone of many successful real estate agencies. However, growing and maintaining a rent roll has its challenges. Three senior property managers give their advice on how to build a rental portfolio.

Rose Koutoumas For Rose Koutoumas, Principal of First National Real Estate in Bentleigh, one word sums up how to build and maintain a successful rent roll: communication.

“Communication is basically the most important thing in any industry, especially real estate,” Koutoumas says.

“Especially communication with the landlord and the tenant.”

Koutoumas has built her rent roll organically. She launched her new agency two years ago with just five properties on the rent roll. In the past year, it has grown 40 per cent.

Koutoumas has plenty of experience, working for the one agency for 17 years before opening her own home‑based business, Complete Property Management.

However when her landlords and 16

The Estate Agent ❘ April 2017

tenants approached her for information regarding buying and selling houses, she expanded her business to include sales. First National was a “good fit” with her desire to run a friendly, family-focused agency where customer satisfaction is paramount.

“The roll has basically grown through referrals,” Koutoumas says.

“We now manage 60 properties. If anyone was to buy it (the rent roll), it’s pristine – no hidden agendas, no arrears.”

‘Build trust. Once you have happy landlords they will talk about it.

It’s like having a good hairdresser – we pass on the name.’

Koutoumas admits property management isn’t easy, advising agents need to “put in a lot of hard work”.

“You need to be part of your community so you know your community. Get involved, join activities and join clubs. Build trust. Once you have happy landlords they will talk about it. It’s like having a good hairdresser – we pass on the name.”

But she warns this is just the start.

Solid rental portfolio key to success “You must keep the relationships and the communication going,” Koutoumas says, adding that transparency is essential. “The public can see right through you if you’re not,” she warns.

“Do your homework beforehand so you know you are providing accurate information to the landlord. Focus on legislation and don’t take short cuts.

This is where your knowledge of the area and prices is important. Owners want the best possible price but you have a responsibility to give the correct information – you must educate them.

“Once a tenant is secured, you must manage the property, keeping the landlord up-to-date on the market and regulations. You are managing thousands and thousands of dollars so the responsibility is enormous.

And if you honestly believe in your business, it will grow.

“If the tenancy runs well, you have a happy landlord and a happy tenant. I’ve got tenants who are now landlords themselves.”

In her role as an REIV trainer, Koutoumas always explains one important rule to her “students”.

Communication – communicate with landlords, communicate with tenants, communicate with yourself.

Property Management

Zac Karvoun Alexkarbon Real Estate has built its rent roll from scratch to 800 properties in just five years.

Director Zac Karvoun says the decision for the North Melbourne agency to grow its rent roll organically was the right one.

“It’s the first important decision you must make – whether to start a new roll or invest in someone else’s, which can be very expensive,” he says.

For Karvoun, having a solid and expanding rent roll in his agency is a no-brainer.

When three friends – Alex Puglia, Charles Bongiovanni and Karvoun – started their own agency five years ago, it was natural for Karvoun to oversee the property management portfolio. It’s his passion.

An industry “veteran” of 23 years, he says the rent roll is no longer the “poor cousin to the sales department” in a business.

“Some agents don’t want one but when the market slows down, you have a reliable income. It’s the cream and if run properly, is a well-oiled machine.”

Karvoun was 17 when he started as an assistant to a real estate sales manager but quickly decided sales wasn’t for him.

“Property management is about long‑term relationships and customer service focus,” he says. “It’s changed so much from 23 years ago.

“I enjoy the landlord connection and the tenant connection; matching people up, whether it’s a doctor, flight attendant, plumber or student.

“Sometimes it’s about supporting people who need to rent because they can’t afford to buy and then there are tenants who choose to rent, even though they own four or five properties themselves.”

Karvoun’s advice is to remain focused and passionate. “You become intuitive

… it’s natural.” However, he says a great deal of hard work is essential and agencies need to do their research.

Clever marketing is also important.

“You need to have a target market and be willing to use what works in different areas, including social media. Again, do your research; there’s no point throwing advertising money around without success. We do a lot of DL card drops for brand awareness. We also do direct marketing to landlords who have existing properties.

“Make sure the photographs are good.

We use a commercial photographer to promote a property rather than snaps taken on a phone. A great photo with the right angles makes a huge difference.

“We also try to provide floor plans. It’s about giving an added service to your client and also providing prospective tenants with comprehensive information about rental properties.”

Karvoun says not all business is good business. “We don’t take on properties that are not to a certain standard. This means you attract a better return and a better tenant.”

Karvoun’s growing property management team of six are well trained and do their research including checking references thoroughly. He says they rarely get it wrong which is why the agency’s vacancy rate is only one per cent.

But he says agencies need to “give back” to staff by way of targets and bonuses.

“It’s important to listen to their (staff) feedback. We are a young company with young staff who can come up with ways of doing things better and more efficiently. You need to listen to their ideas.”

An REIV trainer and former chair of the REIV Property Management Chapter, Karvoun advises agencies to “go everywhere” when it comes to growing a rent roll. Alexkarbon manages

‘It’s about giving an added service to your client and also providing prospective tenants with comprehensive information.’

properties throughout North Melbourne as well as Essendon, Carlton, Northcote, Clifton Hill, East Richmond, Balwyn and Doncaster, with an average rent of $800 a week.

Tanya Di Loreto Running a rent roll in a regional area is considerably different to metropolitan Melbourne, says Tanya Di Loreto, Director of G.J. McDonald & Co. Real Estate in Geelong.

The agency’s rent roll predominantly covers all of Greater Geelong and the Surf Coast and is overseen by a property management team of 13.

Di Loreto, who has worked in property management for 13 years, says running an agency in a regional area can be seasonal. “Regional areas tend to have lower rental prices and higher commissions than metro areas,” she says.

‘A solid rent roll is important to our business as it is a steady cash flow when there is a market downturn in sales.’

“A solid rent roll is important to our business as it is a steady cash flow when there is a market downturn in sales. The long-term relationship built in property management filters through to business for the sales team and is a saleable asset when I decide to retire.”

Di Loreto says there is much more competition now for property management business because more agencies are recognising its value.

“Having a proven and motivated business development manager in your business and the staff to back up claims of service is essential.”

The quality of properties and tenants is also important, says Di Loreto.

“There are many challenges running a large rent roll but there are also many advantages,” she says.

The Estate Agent ❘ April 2017

17

Awards

Awards honour nation’s top performers The Real Estate Institute of Australia’s 12th National Awards for Excellence recognise the industry’s high-achievers

F

ormer REIV and REIA president Neville Sanders is one of four Victorians recognised at the Real Estate Institute of Australia’s 12th National Awards for Excellence, held in Canberra last month.

Sanders was awarded the REIA’s prestigious 2017 President’s Award for his significant contribution to the industry at both state and national levels. An REIV member since 1971 and Victorian president in 2013 and 2014, Sanders is the REIA’s immediate past president, serving at a national level in 2015 and 2016.

Current REIA president Malcolm Gunning says Sanders is a worthy recipient of the award. “With more than 50 years’ experience in the industry, he has most recently focused on owners’ corporations and is well deserving of this accolade.”

It was a back-to-back win for Victoria, with Neil Laws awarded the President’s Award last year.

Business broker Karli Dunham has been awarded the REIA’s Business Broker of the Year title for the second time, previously winning the national award in 2010. A director at Just Business Brokers.com, Dunham has dominated the Victorian business brokers category, winning the REIV award five times in the past decade.

Dunham says despite her success at state level, the REIA win came as a surprise.

“It is very exciting because there’s a lot more competition now and the quality of the competition is much stronger than when I first entered the industry,” she says.

Dunham says her success – at both state and national level – is even more special given that her company is a small business. “When I started in the industry I was a young female in a very male‑dominated industry, so it’s very encouraging to be recognised for the work you’re doing.”

‘When I started in the industry I was a young female in a very male‑dominated industry, so it’s very encouraging to be recognised for the work you’re doing.’

– Karli Dunham 18

The Estate Agent ❘ April 2017

Awards: (clockwise from top) Neville Sanders and Malcolm Gunning; commercial property manager Kristian Etherington; business broker Karli Dunham with REIV CEO Gil King.

An REIV finalist in 2013, 2014 and 2015, persistence has paid off for Kristian Etherington from Ray White Commercial Nunawading. Etherington took home the REIV Commercial Property Manager of the Year title in 2016 and has now been named the 2017 REIA winner.

He says it’s an honour to be

Awards

acknowledged by the broader industry.

“Being recognised on both a state and national scale within the same year in an increasingly competitive market is a huge career highlight for me and our firm.”

CBRE Victoria was also recognised at the national awards, inducted into the REIA Hall of Fame for Commercial Agency of the Year.

The agency has been a leader in the commercial space for a number of years, winning the accolade consecutively in 2014, 2015 and 2016.

REIV President Joseph Walton says Victorian agents continue to set new standards in professionalism, service and results.

“REIV members are consistently recognised at these national awards, with the calibre and quality of our state awards supported by independent industry judges from across Australia.

“Victoria’s winners are delivering a high level of service to their clients and have achieved success in their respective fields.”

Celebration: The REIA awards night (above); REIA Award recipients (left)

The Estate Agent ❘ April 2017

19

Cover Story

Industry experts share tips

Motivational speakers at REIV’s Ignite Leadership Exchange offer insights into inspiring their teams

Stu Morley

Keynote speakers: Kmart CEO Guy Russo and Western Bulldogs coach Luke Beveridge offer their advice on leadership, culture and change.

M

ore than 250 members attended the REIV’s Ignite Leadership Exchange, held at Etihad Stadium in March. The one-day event featured keynote presentations by Kmart CEO Guy Russo and Western Bulldogs coach Luke Beveridge. Attendees also heard from industry-specific speakers including highly respected real estate trainers Michael Sheargold, Fiona Blayney and David Peake.

REIV President Joseph Walton says the refreshed conference format had been crafted around member feedback, particularly in relation to timing, length and presenters.

“This year we saw real diversity in terms of conference attendees, with our younger members engaging with this year’s content and presenters.

“The presence of a speaker with broad public appeal such as Luke Beveridge certainly increased interest in the event,” he says.

20

The Estate Agent ❘ April 2017

GUY RUSSO If the CEO of Kmart and Target can teach you anything, it’s that when you don’t know something you should Google it.

In 2008 the former McDonald’s Australia CEO was hired to turn around

‘This year we saw real diversity in terms of conference attendees, with our younger members engaging with this year’s content and presenters.’ the fortunes of Kmart. At the time, Russo’s entire working life had been spent in the fast-food industry for the same global employer – the golden arches. When he took on Kmart, the company was a zero-profit retailer and had been for more than a decade. He openly admitted to staff that he wasn’t sure how he was going to change

that as he had no previous experience with big box retailers. So he Googled profitable big-box retailers and studied successful models including Walmart, Primark and H&M. “Business is making money with people and you need to understand the formula. At McDonald’s, price and real estate were critical to the success of a store. Kmart was turning over $4 billion in revenue but couldn’t make a dollar,” he says.

Russo removed high-low pricing at Kmart and condensed the volume of items being sold, from 200,000 individual items in 2008 to 50,000 items in 2012.

“Once you know what business you’re in, don’t complicate it. Kmart is a low-priced retailer and so it made sense for us to sell it at the lowest price the first time.”

The retailer now makes a profit of more than $400 million and is Australia’s most profitable

Cover Story

Expert advice: (clockwise from above) Real estate trainers David Peake, Fiona Blayney and Michael Sheargold.

department store. Last year, Russo also took over the role of CEO for Target which has experienced a reversal in its fortunes in the past decade.

In 2008, Target was making a profit of $400 million a year, however, last year the chain lost $200 million. Russo says the chain had focused on new online players, overlooking Kmart as a serious competitor. He says this also applies to the real estate industry, with more players competing for market share. “Agents shouldn’t worry about new players coming into the market, but you need to look at the players that are already here,” he says.

LUKE BEVERIDGE As coach of the Western Bulldogs, Luke Beveridge knows what it takes to build a high-performance team. With many parallels between sport and business, Beveridge says culture is essential to the success of a team or organisation.

“Culture needs to be underpinned by care, ethics, empathy and leadership and the team needs to be a participant

in the development of a business, rather than a recipient,” he says.

“The three essentials are language, care and inclusiveness – if you haven’t got that right then you haven’t got the right culture.”

Beveridge says it’s important that leaders recognise the potential of

‘You can’t become a high‑performing team unless you see the potential in your people.’ their employees and what they can achieve beyond their current roles.

“You need to explore the capabilities of your staff because you can’t become a high‑performing team unless you see the good – and the potential – in your people.”

Beveridge told attendees that the Bulldogs never segregate playing groups with often the most talented players charged with improving the least skilled or least experienced

players. Inspiration and imagery is also utilised at the Bulldogs with leadership portfolios focused on improving the education, spirit, professionalism and direction of the team.

Beveridge says the Bulldogs have adopted a team-first approach and aspire to the selflessness described in the Harry S. Truman quote, “It’s amazing what you can accomplish if you do not care who gets credit.”

Online feedback and subjective performance appraisals provide a non-confrontational and supportive environment with the team tolerant of mistakes.

“You need to tolerate mistakes because they are going to happen and your tolerance needs to match where you want to go in your business.”

As businesses are only as strong as their weakest link, Beveridge says leaders need to get new staff members to buy in to the organisation’s culture and ethos. “The pain of discipline is far better than the pain of disappointment.”

The Estate Agent ❘ April 2017

21

Young Agents

A work experience stint was the beginning of a path to career success

It’s a dream calling for Sam and he’s sold for life

S

am Goddard knew what he wanted to do in life when he was just 15.

Growing up in Geelong and boarding at Melbourne Grammar, working in real estate was always his dream. But it was Year 10 work experience at a local real estate agency that confirmed it.

“It’s all I ever wanted to do,” Goddard says. “I enjoy communicating with people on all different levels which is essential in this business.

I thought it would be something I’d be good at.”

And he has been proven right.

After leaving school, Goddard spent

22

The Estate Agent ❘ April 2017

12 months working at a Geelong real estate business before joining Abercromby’s in Armadale. He hasn’t looked back.

Five years later, he is now a Director of the freestanding boutique agency, specialising in high‑end properties.

Goddard recently sold a Toorak property for about $11 million, a far cry from his very first sale in the industry – a Geelong home that sold for $163,000.

“When I first started, the thought of selling a home worth millions seemed far-fetched,” he says.

Abercromby’s market includes

high‑end suburbs Toorak, South Yarra and Armadale – which Goddard says brings different challenges to his job.

“Selling properties is like putting together a big jigsaw puzzle. You need to get the timing right, get involved in your community, build the right networks and make a positive impact with your clients.”

He believes the key to his success is “being an honest communicator” and building relationships.

“You say what you are going to do and stick to it. It’s simple business … be clear and talk straight.”

Goddard says the market for top-end

Young Agents

Goddard says Melbourne’s premium market is performing well.

Luxury: Toorak has seen a spike in price per sqm

properties is strong, driven by local buyer demand. He has seen a surge in expats returning to Australia for their children’s education and looking to settle down.

“To some extent, a lack of stock has pushed up price. There has been a real spike in the price per square metre of the more opulent pockets. When properties go on the market, they often sell before auction.

“Privacy around sales is very important. Some are not even advertised. We have a database of contacts and we know what they are looking for so, on occasions, it’s about matching the right person with the right property.”

Goddard doesn’t dwell on his losses.

Sell it again, Sam: Sam Goddard says any missed listing is tomorrow’s opportunity.

When he misses a listing, he views it as potential business for the future.

This attitude and his business success has brought him to the attention of his peers. He was a finalist in the 2016 REIV Outstanding Young Agent of the Year and runner-up in the Domain Rising Star.

However, Goddard doesn’t take

‘Being an honest communicator ... You say what you are going to do and stick to it. It’s simple business ... be clear and talk straight’

anything for granted. He has a number of mentors, inside and outside the industry, and enjoys nothing better than hearing the stories of agents who have “made it to the top” in real estate.

“People call me the office sponge,” he laughs. “I’m always absorbing information.”

Goddard admits his work consumes much of his life, occasionally to the frustration of his girlfriend, but he does enjoy a round of golf (he is a member at Barwon Heads), catching up with friends and dining out.

He is happy to offer some advice to new starters in the industry. “You need to be willing to work hard and not look at short-term success.

“It’s not a sprint, it’s a marathon. I’ve only been working for five-and-a-half years which is just the start. Love it and have fun.”

The Estate Agent ❘ April 2017

23

Market Update

Outer suburbs lead the charge as prices soar 2016 closes with robust results across the board while December posts the strongest auction market on record

S

trong price growth was recorded across the city in the last three months of 2016 with the metropolitan Melbourne median up five per cent on September figures to a new record high of $770,000.

While growth was widespread in the December quarter, the city’s outer suburbs experienced the strongest price growth, up 5.8 per cent to a median of $605,500. This increase followed moderate growth of 1.1 per cent in September.

House prices within 10km of the CBD increased 4.6 per cent over the quarter to a median house price of $1,405,000 while suburbs in Melbourne’s middle ring now command a median of $900,500 – a 4.3 per cent quarterly increase.

Ringwood East recorded the city’s highest increase with house prices in the outer Melbourne suburb rising 25.5 per cent over the quarter to a median of $900,000. This was up from $717,000 in September.

Caulfield South was another top performing suburb in the December quarter with the median house price increasing 24.7 per cent to just over $1.8 million.

Significant price growth of more than 20 per cent was also recorded in Toorak, up 22.1 per cent to a median of $4,762,500; Brighton, up 22 per cent to $2,740,000; Armadale, up 21.8 per cent to $2,460,000; Broadmeadows, up 21.2 per cent to $481,000; and Prahran, up 20.9 per cent to $1,685,000.

Double-digit increases were also experienced further from the city with a number of outer suburbs among the city’s top growth areas. These included Ringwood North, Dromana and Upwey – all with median house price growth of more than 16 per cent.

House prices also increased in

24

The Estate Agent ❘ April 2017

‘Double-digit increases were also experienced further from the city with a number of outer suburbs among the city’s top growth areas.

These included Ringwood North, Dromana and Upwey’ Narre Warren South, Springvale and Mount Martha, all up by more than 14.5 per cent.

Melbourne’s desirable inner and middle suburbs continue to dominate the list of most expensive areas. Toorak retained its title as the city’s most expensive suburb, recording a median house price above $4.76 million.

A further nine suburbs recorded median house prices above the $2 million barrier, including Canterbury and Brighton with median house prices of $2,775,000 and $2,740,000 respectively.

Other suburbs making the most expensive list include Hawthorn ($2.47 million), Armadale ($2.46 million), Balwyn ($2.36 million), Malvern ($2.3 million), Caulfield North ($2.28

million), Camberwell ($2.07 million) and Glen Iris ($2.01 million).

Meanwhile, the strongest December auction market on record – in terms of both volumes and sales – assisted in boosting the number of million-dollar suburbs to 120.

In the December quarter, 13 new suburbs recorded median house prices of at least $1 million, including Cremorne, Collingwood, Mount Eliza, Cheltenham and Spotswood.

At the other end of the market, the city’s most affordable suburb in the December quarter was Melton South with a median house price of $285,000.

This was followed by Kurunjang and Melton West, both with median house prices under $400,000.

Market Update

Other suburbs offering affordability include Pakenham ($410,000), Sunbury ($412,000), Werribee ($415,000) and Wyndham Vale ($415,000).

Units and apartments also recorded strong price growth in the December quarter with the citywide median increasing three per cent to $563,500.

Apartments in Melbourne’s middle ring were the main driver of this growth, increasing six per cent over the quarter to a median of $623,000 – higher than the apartment median in inner Melbourne.

Apartment prices in Glen Huntly experienced the largest increase over the quarter, up more than 28 per cent to a median of $605,000.

Significant apartment price growth of more than 20 per cent was also recorded in Armadale ($704,000), Footscray ($455,000), Brunswick East ($638,000), Chelsea ($603,000) and Richmond ($646,000).

Pakenham, Bundoora and Dandenong

were home to Melbourne’s most affordable suburbs for apartments with medians below $350,000.

NO STALLING STAWELL AS THE FRONT-RUNNER Regional Victoria’s property market recorded solid price growth in the December quarter, with the statewide median house price increasing two per cent to $358,000.

Stawell experienced the state’s largest quarterly growth, with house prices up 12 per cent on September figures to a median of $215,000.

Double-digit quarterly price growth was also recorded in East Geelong, boosting the suburb’s median house price to $530,000, up from $480,500 in the previous quarter.

Other regional towns experiencing solid price growth in the last three months of 2016 include Hamilton, up 9.2 per cent to a median of $263,750; Wangaratta, up nine per cent to $327,000; Bendigo, up 8.2 per cent to $395,000; and Hamlyn Heights, up 8.2 per cent to $427,250.

In the 12 months to December, house prices in the coastal town of St Leonards recorded the state’s highest annual increase, up more than 25 per cent to a median of $478,750.

Ballarat North was another top performer with house prices increasing 15.9 per cent over the year to a median of $365,000.

Gisborne ($662,500), Highton ($565,000) and Castlemaine ($425,000) all recorded solid annual growth of at least 11 per cent.

Meanwhile, seaside towns continue to attract regional Victoria’s highest median house prices with eight of the most expensive areas located along the coast.

Barwon Heads is the state’s most expensive town with a median house price of $916,000 – significantly higher than the metropolitan Melbourne median.

At $752,500, Queenscliffe also recorded a median house price on par with its city counterparts as did Lorne ($730,000) and Jan Juc ($710,000).

Coastal areas also experiencing high median house prices include Torquay ($695,000), Geelong ($680,000), Newtown ($680,000) and Anglesea ($670,000).

In the December quarter the state’s most affordable town was Kerang with a median house price of $136,000.

Other towns offering value for money include the Gippsland towns of Morwell and Moe with median house prices of $165,000 and $169,000 respectively.

The Estate Agent ❘ April 2017

25

Profile

Regional agent Matt relishes the rich spread Bendigo offers the best of everything: affordability, great facilities, arts, transport links and a variety of properties

R

egional and rural real estate agents must be all things to all people … just ask Matt Bowles.

Bowles and his company have sold everything from small rural cottages under $100,000 to multimilliondollar homes, huge industrial and commercial premises to lemons from a backyard tree.

“In the country, we rarely get to specialise,” he says. “But that’s the attraction. The market is so diverse.”

Bowles joined DCK Real Estate in Bendigo 23 years ago and is now one of four agency directors, overseeing a staff of 44.

Real estate is something he always wanted to do with his career spanning 27 years. Growing up on a dairy farm north of Bendigo, Bowles moved to Melbourne when he finished school and studied for his real estate licence.

“It’s that old story of the children of dairy farmers choosing a career in anything but dairy farming … it’s hard work!” he laughs.

Bowles returned to Bendigo as a 19-year-old. He toyed with the idea of becoming a stock and station agent but his career took a different path. His first job in real estate was as a receptionist before moving into property 26

The Estate Agent ❘ April 2017

management and then sales. The Greater City of Bendigo has also grown over the years and now boasts a population of about 100,000 people.

Bowles says the local market is varied with prices differing considerably from suburb to suburb.

“It’s like comparing Toorak to Tarneit.

The upper end of the market in the older and more established parts is

‘It’s that old story of the children of dairy farmers choosing a career in anything but dairy farming ... it’s hard work!’ doing very well as are the homes close to the new hospital.

“But the median price for a three-bedroom, two-bathroom home is still between $400,000 and $430,000 which is very affordable.”

Bowles says rural and regional agencies have a diverse portfolio. In addition to the residential sector, there are smaller farmlets and lifestyle properties – everything from five to 50 acres – as well as commercial and industrial properties. DCK also runs a

substantial rent roll of both residential and commercial properties.

“Our work is quite vast and you need to be adaptable to this variety,” Bowles says. “Our market is 10 per cent auction and 90 per cent private sale which is quite different to most city markets.”

Bendigo’s proximity to Melbourne, its large-scale developments in health and the arts, and its widespread employment opportunities has seen it become a popular centre for buyers seeking a lifestyle change as well as a tourist destination.

“We are fortunate that unlike other regional centres which rely heavily on one or two large employers, we have a really good spread of employment opportunities across commerce, industry, health and education,” Bowles says.

He cites the new hospital, the $26 million theatre precinct which saw the former jail transformed into the Ulumbarra Theatre, and the Bendigo Art Gallery with its world-class exhibitions such as ‘Marilyn’ and ‘Grace Kelly’ as an example.

“Our new hospital has world-class facilities and is attracting more health professionals to the area. It has been incredible to see this dream become

Profile

Matt Bowles: Gets to be all things to all people ... but he draws the line at milking cows and rising at 4am to move the herd.

On a winner: Regional agent Matt Bowles says Bendigo offers everything he wants in work and life.

a reality. The theatre brings some amazing productions to the city as does the gallery. In fact we have had people who have visited Bendigo as tourists actually decide to settle here.”

The excellent transport facilities with a four-lane freeway and regular train service mean a large number of people commute between Bendigo and Melbourne for work.

“I have a friend who catches the 5.45am train from Bendigo and is in Melbourne before 7.30am,” Bowles says. “I love it (Bendigo) because it has

Supporting Estate Agents for over 35 years …experience is everything

‘I remember people at one sale pinching lemons off a tree in the backyard, so I put them up as a lot and sold them for $10!’ everything I need and is a three-minute commute to work.”

When Bowles is not working, he is busy ferrying his three children – aged between 10 and 15 – to their sporting pursuits. He also has various community roles. A former chair of

the Bendigo REIV Division, Bowles is on the Bendigo Health charitable foundation and often runs “charity” auctions. He also enjoys renovating and keeps a few sheep “around the place”.

Bowles has no regrets about not selling livestock but says he will auction pretty much anything.

“I have sold a few chooks at the odd clearing sale,” he recalls. “And I well remember people at one sale pinching lemons off a tree in the backyard, so I put them up as a lot and sold them for $10!”

Chartered Accountants & Business Advisors Structuring for Stakeholders Rent Roll Aquisition & Sale Valuation Trust Account Audits Planning for Growth, Retirement & Succession Internal Management Reporting Taxation Compliance GST & Income Tax Advisory Proud Sponsors of the

t: 03 9820 6400

e: hcm@hallchadwickmelb.com.au

www.hallchadwickmelb.com.au

The Estate Agent ❘ April 2017 HCM8801 REIV AD 180x64mm.indd 1

27

7/04/17 9:40 AM

Training

Kickstart your career Traineeships allow agencies to develop and upskill staff TRAINEESHIPS REIV traineeships offer Agent’s Representatives the opportunity to complete the Certificate IV in Property Services (Real Estate) while they continue to build practical skills in the workplace.

Agent’s Representatives have up to 24 months to complete the full licence course, delivered through a combination of workplace training, REIV trainer support, learning materials and workplace visits. The flexible training option allows Agent’s Representatives to develop their professional careers while continuing to gain hands-on real estate experience.

Trainees will have full support through monthly access to an experienced and qualified REIV trainer-assessor.

The REIV will work with the trainee and employer to customise a suitable training plan.

REIV Learning and Development Manager Rae Wilson says traineeships can also be an effective way for employers to attract and recruit staff.

“Traineeships allow agencies to develop and upskill existing staff to meet the needs of a growing – or changing – business.”

REIV traineeships are also available for those new to the industry, allowing new employees to complete the Agent’s Representative units as part of the full licence course.

To be eligible for a traineeship, an Agent’s Representative must work in the industry on a full or part-time basis for a minimum of 13 hours a week.

Fees are dependent on an individual’s eligibility for Victorian Government funding through Skills First. Employer incentives may also be available.

For more information on REIV traineeships, contact the REIV’s Learning Department on 9205 6666

WEBINARS As part of the REIV’s commitment to greater professionalism within the industry, online training webinars will be delivered regularly to members from mid‑year.

Agency & Risk May 29

The weekly webinars will run for an hour with content tailored to a range of real estate fields, including commercial and residential sales, property management and contracts of sale.

The online seminars will be delivered by experienced real estate professionals, who remain active within the broader industry.

REIV Learning and Development Manager Rae Wilson says the webinars eliminate the need for members to travel long distances, often involving a great deal of time out of the office and considerable expense.

“A web-based seminar is an easy and accessible way to deliver training to our membership,” Wilson says.

For more information on upcoming webinars visit www.reiv.com.au

Business Broking 9am–12.30pm

Managing risk in estate agency practice

Auction

August 28-30 9am-5pm

Job Ready – Business Broking

Commercial

May 16

9am-5pm

Introduction to Auctioneering

May 8

9am-5pm

Commercial property management fundamentals – Part II – Lease administration

July 3

9am-5pm

Introduction to Auctioneering

May 15

9am-5pm

Commercial property management fundamentals

July 18

9am-12.30pm

Voice control fundamentals

May 18

9am-5pm

Commercial property sales documentation and processes

August 31

9am-5pm

Introduction to Auctioneering

28

The Estate Agent ❘ April 2017

Training

Primetime (continued)

Commercial (continued) June 5

9am-5pm

Commercial property management fundamentals – Part II – Lease administration

June 26

9am-5pm

Commercial property management fundamentals

July 5

9am-5pm

Commercial property management fundamentals – Part II – Lease administration

July 12

9am-12.30pm

Essential safety measures for commercial property managers

July 12

1.30-5pm

Commercial property management- rent reviews

July 19

9am-5pm

How to list commercial property for lease

July 26

9am-12.30pm

Commercial property management options and renewals of leases

July 26

1.30-5pm

The agent’s role in commercial lease documentation – identifying common errors and mistakes

August 2

9am-5pm

Leasing Commercial Property

August 9

9am-5pm

Commercial property management fundamentals

August 16

9am-12.30pm

Pricing commercial property for sale and for lease

September 22 9am-5pm

August 23

9am-5pm

Commercial property management fundamentals – Part II – Lease administration

Property Sales

September 6

9am-5pm

How to list commercial property for lease

June 5-8

9am-5pm

Job Ready – Residential property sales

September 13 9am-5pm

Leasing Commercial Property

June 14

1.30-5pm

Residential Sales Documentation – Getting it Right

September 20 9am-5pm

Commercial property management fundamentals

September 1

1.30-5pm

Residential Sales Documentation – Getting it Right

September 11-13

9am-5pm

Job Ready – Residential property sales

Leadership and Management

June 16

1.30-5pm

Navigating culture and conflict

June 22

1.30-4pm

Coaching for Success

June 29

9.30-11am

Workplace Stress

Property Management May 1

9am-5pm

Advanced residential property management

May 19

9am-12.30pm

Residential property management – Tips & Insights

May 22-25

9am-5pm

Job Ready – Residential property management

June 22

9am-5pm

Intermediate residential property management

June 23

9am-5pm

Preparing for and presenting at VCAT

July 28

9am-5pm

Advanced residential property management

August 14-17

9am-5pm

Job Ready – Residential property management

August 24

9am-12.30pm

Residential property management - Tips & Insights Preparing for and presenting at VCAT

May 3

9am-12:30pm

MODULE 2: Personal Leadership: Learning to Lead

Series: The difficult D’s of RPM

May 17

9am-12:30pm

MODULE 3: Business Leadership: The Leader as 'Change Agent'

May 3

9am-12.30pm

Death, divorce, door keys

May 31

9am-12:30pm

MODULE 4: Cultural Leadership: The Leader's role in 'Shaping the Environment'

May 10

9am-12.30pm

Drugs, domestic violence, dangerous situations

9am-12.30pm

9am-12:30pm

MODULE 6: Performance Leadership: The Leader's role in Achieving results

May 26

June 28

Disputes, declining applications, databases, difficult people

June 1

9am-12.30pm

Dogs, damage

Owners Corporation May 17

9am-5pm

Intermediate Owners Corporation Management

June 14

9am-5pm

Advanced Owners Corporation Management

June 21

9am-5pm

Introduction to Owners Corporation Management

August 1

9am-5pm

Intermediate Owners Corporation Management

August 22

9am-5pm

Advanced Owners Corporation Management

September 7

9am-5pm

Introduction to Owners Corporation Management

May 2

9-11am

Emotional Intelligence (self)

May 19

9-11am

Emotional Intelligence (others)

June 2

9:30-11am

Personal Efficiency

Primetime

SKILLS FIRST PROGRAM The REIV encourages individuals with a disability to access subsidised training through the Skills First Program. Victoria’s training and TAFE system was overhauled recently through Skills First. This new approach to training sets a high benchmark for training quality and supporting the courses most likely to lead to employment. The Certificate IV in Property Services (Real Estate) is one of the courses available with subsidised training available to eligible students.

For more information contact the REIV’s Learning Department on 9205 6666.

reiv.com.au –

your first source for REIV events in 2017 The Estate Agent ❘ April 2017

29

Future Leaders

Stepping out on your own Having a solid plan and reliable support are important when starting your own agency

F

or agents looking to start their own agency or join a franchise, you’ll need at least $200,000 in the bank and a sound business plan, according to Harcourts Group CEO Sadhana Smiles.

Speaking at the REIV’s Future Leaders Forum, Smiles says agents need to be continually upskilling themselves to prepare for the next challenge in their professional career.

“I’m a big believer in training and we need to be able to upskill our people for the next five years. Our clients are demanding higher levels of service and it’s all about meeting the clients’ expectations.”

After getting her start in the industry as a receptionist, Smiles is now one of Victoria’s most successful women in real estate, overseeing the state’s largest franchise group.

She says buying power is the biggest difference between joining a franchise and starting an independent agency.

“The buying power they bring to the table, along with stable leadership, systems and process is what they give you.”

In exchange, Smiles says it’s the role of the franchisee to gain market share in a particular marketplace, increase the brand profile and grow profit.

Smiles recommends writing a one‑page business plan before starting your own business, outlining the agency’s vision, purpose, key focus areas and results targets.

“Have a plan – write goals and stick them on a shower wall or somewhere you’re going to see them every day.”

Having someone to hold you accountable and provide support, such as a mentor, is also important, she says.

Dean O’Brien, co-founder of the successful O’Brien Real Estate brand, presented on the benefits of independent agencies.

The O’Brien brand started in Berwick in 2010 but has since grown to encompass 17 offices, predominantly 30

The Estate Agent ❘ April 2017

Clockwise from left: Craig Nichol, Alex Morgan, Dean O’Brien, Thomas Georgiou, Alex Ashton and Sadhana Smiles.

located in the city’s south-east.

O’Brien says there is no such thing as great timing in real estate with shopfront location and quality staff

essential to the success of a brand.

“It’s exciting growing your own business – you learn a lot of lessons but you also make a lot of mistakes,” he says.

He says the brand is focused on people and this is reflected in its motto – “the quality of our service stems from the importance we place on the people behind the network”.

“You need passion and great people behind you,” he says. “You need to realise what your employees’ potential is and take them on the journey.”

O’Brien says there are two stages of business – growth and return – and it’s impossible to be in both at the same time.

He adds that there’s more to being a business owner than the ability to list and sell property, as this often accounts for less than 10 per cent of what you do as leader.

“Partnerships are really important because the demand on a single person is huge and things can go wrong on a daily basis.”

‘Partnerships are really important because the demand on a single person is huge and things can go wrong on a daily basis.’

TIPS FOR STARTING YOUR OWN BUSINESS Franchise versus independent ❚ What matters is how the consumer feels about the brand that you work for ❚ Consumers see the brand – not whether an agency is a franchise or independent ❚ Are consumers connecting with your people/brand/marketing? ❚ Franchise fees will vary but typically about eight per cent of commission will go to the franchisor Opening your own office – what’s next ❚ Full licence – Certificate IV in Real Estate (Property Services)

❚ Register business name on the

Australian Securities and Investments Commission (ASIC) ❚ Register business with the Business Licensing Authority (BLA) ❚ Funding – Macquarie Bank recommends between $250,000 and $400,000 working capital ❚ Partnership – agreed entry and exit strategy ❚ Decide on branding and marketing ❚ Know your market share and the market share of your competitors

Fundraiser

Raising awareness: (From left) Jim Lourandos, Campbell Brown, Colleen Danaher, Barry Besanko and Geoff White.

Giving to stay living Business Brokers Christmas Lunch raises funds for prostate cancer awareness

A

record attendance at the REIV’s annual Business Brokers Christmas Lunch saw more than $16,400 raised in support of prostate cancer awareness.

Held at the Box Hill Golf Club late last year, the event featured presentations by E.J. Whitten CEO Barry Besanko and former AFL great Campbell Brown.

The sold-out event was attended by more than 100 members with proceeds from the charity auction – run by Phil Defegly – donated to the E.J Whitten Foundation.

The E.J. Whitten Foundation, in memory of Ted Whitten Snr, is currently seeking funding to continue

pinpoint trials at the Epworth Hospital.

Attendees heard more than 20,000 new cases of prostate cancer are diagnosed in Australian men every year, with 3500 of those men dying.

Besanko says 40 per cent of men who have their prostate removed will get secondary cancer.

The pinpoint trial aims to prevent men from undergoing unnecessary treatments by detecting usually undetectable prostate cancer cells post‑surgery.

‘We want to inspire all men to look after themselves.’

Bidding for good: Record number of attendees dig deep to raise cash for prostate cancer awareness.

Besanko says there’s a need for men to have regular PSA blood tests as curable prostate cancer has no symptoms at all.

“We want to inspire all men to look after themselves by having a blood test from the age of 40 if you have a family history of prostate cancer or from the age of 50 if you don’t,” he says.

To donate, please visit www.ejwhittenfoundation.com.au The Estate Agent ❘ April 2017

31

Events

ECONOMIC GURUS TO SHARE INSIGHTS The Australian and global economies, emerging real estate trends and the nation’s changing demographic will be the focus of the 2017 REIV Commercial & Industrial Economic Forecast lunch.

Held at Crown Promenade on July 28, the annual event will feature presentations by National Australia Bank’s Chief Economist Alan Oster and social researcher Mark McCrindle.

With 25 years’ experience at NAB and 15 years in the Federal Treasury, Oster is one of Australia’s eminent commentators on national and global economic trends.

An award-winning social researcher and best-selling author, McCrindle is regularly commissioned to deliver strategic advice to boards and executive committees of some of Australia’s leading organisations.

His presentation will provide a snapshot of the key trends redefining our society and the real estate industry, outlining the key influencers and decision drivers for today’s consumers.

Speakers: National Australia Bank’s Chief Economist Alan Oster (left) and social researcher Mark McCrindle.

C&I ECONOMIC FORECAST LUNCH 2017 When Friday, July 28 12:00pm – 3:00pm

Cost Includes Individual members - $154 Two-course lunch and Members table - $1,386 drinks Individual non-members - $198 Non-members table - $1,782

Where Crown Promenade

For further information, visit REIV.com.au

Your REIV events calendar for 2017 MAY

JULY

09

Senior Auctioneering Competition – Heats

18

Geelong Division Meeting

10

Senior Auctioneering Competition – Final

20

Valuation Chapter Seminar

18

Mornington Peninsula Division Lunch

25

Property Management Seminar

26

Buyer’s Agents Chapter Breakfast

28

Commercial & Industrial Chapter Breakfast

JUNE 02

Young Agents Chapter - Future Leaders Forum

06

Bendigo Division Meeting

21

Graduation Day

09

Commercial & Industrial Novice Auctioneer Competition – Heats

27

Southern Division Meeting

15

Novice Auctioneer Competition – Heats

16

Commercial & Industrial Novice Auctioneer Competition – Final

22

Novice Auctioneer Competition – Semi-final

29

Novice Auctioneer Competition – Final

AUGUST

reiv.com.au

Your first source for REIV events in 2017 Please note that dates are subject to change.

Topics and speakers are added online as information becomes available.

32

The Estate Agent ❘ April 2017

Member News

MARKING MILESTONES More than 70 REIV members have celebrated significant membership milestones this year, signalling an ongoing commitment to both their careers and the industry. Almost 50 members marked 10 years with the

10 year David Aiello Allan Barrett Gail Barrett Wayne Barrett Glenn Bartlett Donna Bennett Josie Borg Peter Bremner Edward Brown Jamie Butterworth Simone Butterworth Jarrod Carman Chauntel Considine Sujith Cooray Lee Di Giovine Jenny Donaldson

Institute, 17 individuals have been members for two decades and five have achieved 30 years as members.

Graham Love (pictured) and Peter Maxwell celebrated 40 years while Leo Bloumis marked half a century.

Karli Dunham Jeanine Dwyer Brett Fitzpatrick Helen Foote Roula Fotinatos Glenn Hardman Susan Holly Steve Holmes Chris Kloppenborg Rick Lander Jerry Last Jonathan Lewis Anne Mackie Blair Main Danielle Martin Tom May Paul Meehan

George Nastas John Oakley Philip Prowse Andrea Ranca Peter Rijs Lizzie Roberts Diane Saunders Erol Savas Jim Stamatis Nikkie Stamatis Dimitri Tantanis Andrew Tracey Gary Van Someren David Vaughan Hayley Weston Damian Wilson

50 year Leo Bloumis

40 year Graham Love Peter Maxwell

30 year

Peter Dickinson Mark Granter

20 year Tony Armeri Jason Beveridge Joanne Boothroyd Nick Breheny Anthony Cardinale Louis Christou Robert Clifford Peter Cook Stan Coolegem

Graham Love

John Newman Sandy Rennie Wayne Sweeney

Robert Cunningham David Devlin Michael Edgar Brad Hollingsworth Paul Kounnas Matt Nichols Paul Nuske Michael Smith

Your life your fund

Get some

good advice

from the super professionals for the real estate industry.

We’ve been managing super for Australia’s real estate employees since 1975, so it’s fair to say we know what we’re doing.

Braden Walters, REI Super member

Call us on 1300 13 44 33 for low-cost advice on your super options, or visit www.reisuper.com.au/super/advice

The information provided does not constitute financial product advice. However, to the extent that the information may be considered to be general financial product advice, REI Super advises that it has not considered any individual person’s objectives, financial situation or particular needs. Individuals need to consider whether the advice is appropriate in light of their goals, objectives and current situation. Members should obtain and read the Product Disclosure Statement for REI Super before making any decisions. REI Superannuation Fund Pty Ltd ABN 68 056 044 770, AFSL 240569, RSE L 0000314, REI Super ABN 76 641 658 449, RSE R1000412 MySuper unique identifier 76641658449129. November 2016. REIS 52533

REIS 52533 estae mag half page ad_1.indd 1

The Estate Agent ❘ April 2017

33

5/04/2017 1:55 pm

Member News

CONNECTING MEMBERS WITH EACH OTHER Chapter and Division Committees are an integral part of the REIV membership structure and help develop Institute policy, best practice and networking opportunities.

Divisions provide members with access to information and support in local areas with 17 divisions located throughout Victoria. Regular division meetings address local issues as well as build fellowship and camaraderie in the broader industry.

To participate in a division meeting, please contact your local Chairperson. REIV Chapters develop best practice across a range of specialist real estate fields. Each Chapter will hold events throughout the year, which are focused on

issues relevant to that specialisation.

Members can join a Chapter by updating their preferences online or alternatively, by contacting the REIV Membership Department on 03 9205 6666.

Each Division and Chapter has the opportunity to elect a representative to the REIV Members Council, raising issues that are impacting on agents in a particular region or specialisation.

The REIV’s Chapter and Division committee members for 2017-2018 are outlined below.

REIV DIVISIONS

Ballarat

Geelong

Goulburn Valley

Chair Christine Segaert, Extra Mile Realty, Ballarat

Chair Samantha Davison, G.J. McDonald & Co. Real Estate, Geelong

Chair Michael Blake, Youngs & Co Pty Ltd, Shepparton

Maryke Kendall

Melbourne Central Chair Jacob Caine, Caine Real Estate, East Melbourne

Sunraysia Chair Tony Roccisano, Roccisano Real Estate, Mildura

Mornington

Murray Alpine

Otways

Southern

Wimmera

Bendigo

Chair Andrew Meehan, Nicholas Lynch Rentals Pty Ltd, Mornington

Chair Gerard Gray, Dickens Real Estate, Bright

Chair Bruce Ludeman, Ludeman Real Estate, Warrnambool

Chair Courtney Thursfield, JPP Buyer Advocates, Patterson Lakes

Chair Tim Coller, Coller Rathgeber Property Group Pty Ltd, Horsham

Chair Andrew Murphy, Mawby Property, Bendigo

Elaine Bourke Geoff Crowder Michael Phillips Linda Wooley

34

The Estate Agent ❘ April 2017

Frank Hellier Ian James

Matt Bowles Bradley Hinton John Keating Jacinta McIvor Thomas Maher Craig Webster Darryn Mawby

Member News

REIV CHAPTER

Auction

Business Brokers

Buyer Agents

Valuation

Owners Corp

Chair Adam Docking, MJ Docking & Associates

Chair Colleen Danaher, Danaher Realty

Chair Ian James, JPP Buyer Advocates

Amin Badawi Brian Budd Jamal Dabab Robert Hurst Norberto Izsak Catherine Kimpton Anthony Latessa Natalie Sirianni

Mark Brilliant Bernard Corser Mark Errichiello Richard Kerr Mark Ruttner Janet Spencer Kim Easterbrook Melissa Opie

Chair Sam Tamblyn, Urban Property Australia Transaction Management Pty Ltd

Chair Michael Nardella, AA Michael Nardella Real Estate Pty Ltd

Luke Banitsiotis Adrian Butera Ryan Di Natale Michael Hall Harry Li Raoul Salter Cameron Way Phil de Fegely

Dimitrios Derzekos (Jim) Paul Evans Darrell Simpson Julian Valmorbida Damian Lynch

Commercial & Industrial

Residential Sales

Chair Tim Mitchell, Miles Real Estate

Chair Leigh Maher, Oak Estate Agents

Michael Di Carlo Ben Foster Gavan Lethlean Simon Regan Wendy Thomson Richard Simpson

Ying Wang (Kristy) Christopher Ewart Tim Heavyside Adam Joske Andrew Meehan

Norman Mermelstein John Ross Alex Starr

Property Management Chair Sam Nokes, Jellis Craig (Armadale) Sabina Aldouby Leah Calnan Nicole Jensen Rose Koutoumas Georgina Tobolov Clementina Tralongo Sophie Lyon

Young Agents Chair Thomas Georgiou, Beckett (Australia) Pty Ltd Jason Allen (Jay) Troy Guthrie Jonathon O’Donoghue Emily Rutherford Courtney Thursfield

RECRUIT, RETAIN, UPSKILL Leverage the REIV Traineeship program to develop new and existing staff.

REIV Traineeships are an effective and efficient way for your staff to complete their CPP40307 - Certificate IV in Property Services (Real Estate) while continuing to build practical skills in your workplace. In addition, your business may be eligible to benefit from Commonwealth Government incentive programmes which aim to assist employers to take on trainees.

Contact us on: 03 9205 6666 or training@reiv.com.au | RTO 4042

This training is delivered with Victorian and Commonwealth Government funding.

The Estate Agent â?˜ April 2017

35

Tenancies

Cleaning up after drug use Decontaminating properties affected by methamphetamines can be tricky as damage is not always visible

W

ith the manufacturing of drugs in rental properties an increasing concern for Victoria Police and property managers, regular inspections may not be sufficient to deter offenders. While most cannabis-related property damage is obvious, Steven Penn from TACT Bio‑Recovery and Meth Lab Testing Australia says methamphetamine damage is not always visible.

“Agents won’t necessarily be able to identify if a property is contaminated simply by looking at it, as more often than not you can’t see it,” he says.

“You can walk into a pristine home in showroom condition and get methamphetamine residue swab levels way above the recommended safe level.

On the other hand you can walk into a trashed home thinking it’s been used as a drug house and it returns clear results – it’s not always obvious.”

Penn has first-hand experience with properties affected by methamphetamines with his company attending, testing and remediating more than 80 properties in the past five years. These range from inner-city high-rise apartments to rural homes in remote areas.

He says not all meth-contaminated properties have been used for manufacturing drugs, with the majority of properties he remediates known as ‘user sites’. While the recommended safe level is 0.5ug per 100cm2, a property can easily become contaminated above this level purely from someone smoking methamphetamines on the premises.

Similar to passive cigarette smoke, the smoke residue will permeate the walls and contents of the property.

However, because meth is a solvent‑based drug it tends to eat into the paint, plastic surfaces and fittings.

Penn says meth residue can also start to rust door hinges, corrode taps and door handles and sticks to everything.

“Meth residue will remain in a 36

The Estate Agent ❘ April 2017

property until it is physically removed, transferring from item to item and in turn, contaminating new items brought into the property,” he says.

Penn says there are two general approaches to decontamination, depending on the level of contamination.

“For sites where lower levels of methamphetamine are detected, we generally apply a triple wash, triple rinse procedure. The application process is often time and labour-intensive.

“It can take days or even weeks to treat an entire house, and may warrant the removal of the internal wall linings (plasterboard).”

However, the majority of contaminated properties will require a chemical methamphetamine

‘Meth residue will remain in a property until it is physically removed, transferring from item to item.’

Damage: Methamphetamine residue can permeate the walls and contents of the property.

neutralisation process. This can often be achieved in under eight hours and does not involve the removal of plasterboard.

However, in worst-case scenarios the removal of plasterboards is the only option to remediate the home.

Penn says landlords are ultimately responsible for cleaning contaminated properties and in some instances, the owner may also be legally responsible if inhabitants become ill after entering or living in a contaminated home.

Best Practice

A recent case serves as a timely reminder to agents to review the indemnity limits under their professional indemnity insurance policy.

Be covered for the day the decision goes against you

By Nancy Rainbird, Claims & Compliance Manager at Realcover

T

he case in question involved a commercial property comprising a convenience store, nightclub and another smaller business.

The buyer claimed the property was sold to him under misleading circumstances.

ALLEGED MISREPRESENTATIONS The buyer, who was a commercial property investor and already owned another property on the same street, made an offer of $5.925 million before auction.

He told the court the agent had told him an offer of $5.92 million had been received and, on this basis, the auction had been cancelled.

He also explained he had calculated the yield of the property by reference to the rental return being more than six per cent, and this formed the basis of his offer. In addition, due to representations by the real estate agent, he was satisfied that the three existing tenants were “good payers”.

It later transpired the nightclub tenant had not paid rent for some time and there was a rent abatement agreement in place between the seller and that tenant.

The real estate agent told the court that he was not the leasing agent and had no knowledge of the rent

abatement agreement. The agent also said that he didn’t make statements to the effect that the tenants were “good payers”.

The court made a finding of fraud against the agent and damages (with interest) were assessed at more than $3 million (against the agent and his fellow defendants).

FINDING OVERTURNED On appeal, the decision was

overturned on the basis that there was no specific evidence to back up the buyer’s claims that certain representations were made.

The court of appeal also found that agents should only be held liable to the extent that their misrepresentations contribute to the loss.

The buyer has now filed an application for leave to appeal to the High Court and the decision is pending.

WHAT’S YOUR LIMIT? The appeal decision overturning the finding of fraud is a welcome one.

However, as the original judgment shows, it could have easily gone the other way – leaving an agent drastically out of pocket, because the amount of the judgment was in excess of the indemnity limit under many professional indemnity insurance policies.

Realcover strongly advises all agents to review their indemnity limits.

HOW TO AVOID SIMILAR CLAIMS To avoid falling victim to similar claims, agents should: ❚ Verify the amount of rent for any

tenancy before including it in promotional material. Alternatively, do not include it at all. ❚ Avoid making statements about the capacity of a tenant to pay the rent, unless proof is available. ❚ Verify the details of any rental arrears in writing. ❚ Outside auction conditions, make purchasers sign a statement saying they have made their own inquiries and aren’t relying on oral, written or implied representations on matters that may have influenced their decision

to make an offer. ❚ Avoid untrue statements about other

offers or reasons why a property is being taken off the market.

DISCLAIMER: While care has been taken in preparing this article, and the information in it has been obtained from sources that Realcover believe to be reliable, Realcover does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose that the article may be used. Realcover accepts no liability for any loss or damage (whether caused by negligence or not) resulting from the use of this article.

The Estate Agent ❘ April 2017

37

Best Practice

Keep tenants safe by ensuring gas appliances are regularly serviced by a qualified technician. By Michael Weber from Energy Safe Victoria

A matter of life and death

A

ustralia has an excellent safety record when it comes to gas appliances. The industry is well regulated, with a strict testing regime, however for gas appliances to continue to function correctly they need to be regularly serviced by a qualified technician. This is especially important for rental properties where the landlord indirectly holds the balance of their tenants’ health in their hands.

The greatest concern with gas appliances is carbon monoxide (CO) spillage from poorly maintained gas heaters and indoor open-flued water heaters (the replacement of some types of indoor water heater is now banned in bathrooms, toilets, bedrooms and combined living/sleeping areas).

The incomplete combustion of natural and LP gas can produce CO. It is highly poisonous, invisible, odourless and very difficult to detect with the human senses. If CO were to build up in the blood supply it would interfere with the body’s ability to supply itself with oxygen and is therefore dangerous to the health of occupants. Carbon monoxide poisoning may present itself as shortness of breath, nausea, headaches or flu-like symptoms.

Under normal operating conditions with well-maintained gas appliances in correctly ventilated rooms, combustion products are safely discharged via the flue or chimney. However high levels of CO can spill into the living space if one or more of the following conditions exist in the rental property: ❚ A gas appliance is faulty or poorly maintained; ❚ The flue is partially or totally blocked; or ❚ The heater is not adequately ventilated.

To maintain a safe living environment in rental properties, ensure gas 38

The Estate Agent ❘ April 2017

appliances – especially the gas heater and indoor open-flued water heaters (should one be installed) – are serviced by a qualified gasfitter who will conduct the appropriate tests for appliances.

Ventilation within the property is as important as gas appliance maintenance. With the drive towards more energy‑efficient homes, tightly sealing doors and windows can reduce the available ventilation to little or none.

This lack of ventilation along with the increased performance of rangehood fans and bathroom exhaust fans creates

‘Ventilation within the property is as important as gas appliance maintenance.’ negative pressures, allowing exhaust gases to be drawn back into the house instead of being discharged.

Energy Safe Victoria recommends property managers organise a qualified gasfitter, who will use specialised carbon monoxide detectors capable of measuring very low concentrations of CO, to service and test appliances every two years. The gasfitter will advise property managers of the best course of action if CO is detected.

A comprehensive gas appliance

checklist has been developed for rooming houses (refer to the Energy Safe Victoria website at esv.vic.gov.au/ technical-information/gas-appliancesand-equipment/rooming-house-gassafety-check) and is being considered for application with rental properties.

While there are no mandatory requirements for rental properties, the Residential Tenancies Act requires a landlord to ensure the rented premises are maintained in good repair.

This includes gas appliances and installations in the property, even though there are currently no specific gas servicing requirements or timeframes.

The Residential Tenancies Act is now up for review and a number of issues relating to gas appliance servicing are being considered. They include: ❚ Adapting minimum standards for safety checks as for rooming houses to two-yearly safety checks on gas installations and fittings and five‑yearly safety checks on electrical installations and fittings; ❚ Providing a minimum health, safety, amenity standards for vacant premises. That is, all fixed electrical and gas appliances are serviced by a licensed practitioner as recommended by Energy Safe Victoria or another prescribed period; ❚ Servicing appliances. Energy Safe Victoria recommends landlords should ensure a safety check for all gas and electrical appliances is carried out at agreed intervals and at least every two years, and appliances are deemed safe at point of lease; ❚ Servicing appliances. Regulations would require any gas or electrical installations and fittings be serviced by a licensed professional at least once every two years, and records of these checks must be kept; and ❚ Rental agreements to clarify responsibility for particular maintenance.

Energy Safe Victoria does not endorse the installation of carbon monoxide alarms as a method of reducing the threat of CO poisoning in houses, but strongly promotes regular maintenance of gas heating appliances.

•

Don’t put your tenants at risk - testing of gas heaters and appliances every two years protects from Carbon Monoxide poisoning

•

One in ten appliances serviced during the last 12 months have required repair or replacement parts due to hazardous carbon monoxide spillage

•

Trust the Victorian experts: -

Safety guaranteed Victoria’s largest market share State of the art safety equipment Peace of mind Flexible appointments Insider knowledge We understand Property Managers better No subcontractors Agents kept up to date on service progress



2017

AWARDS FOR EXCELLENCE Nominations open

Nominations close

Finalists announced

2017 Awards for Excellence

Saturday, 1 July 2017

Friday, 11 August 2017

Thursday, Thursday, 21 September 26 October 2017 2017

2017 Commercial & Industrial Marketing Awards

Saturday, 1 July 2017

Friday, 11 August 2017

Friday, 1 September 2017

Find out more at

reiv.com.au/awards2017

Winners presented

Thursday, 14 September 2017