When Experience Counts

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The last week has proven to be the kick-start in the market that we’ve been waiting for, with the combined efforts of the Taylor Nicholas network selling 100% of our listings under the hammer at auction with the total value exceeding $10 million.

Other agency results don’t necessarily show the same level of optimism with many withdrawing their listings prior or passing in on the day.  This highlights the importance of entrusting your property with a long-standing, knowledgeable agent who has experienced every possible market condition.

All the week’s properties sold well above their reserve prices with one achieving a massive 22.5% increase of $900,000 above expectations.

If you have a non-residential property in Sydney and would like to talk to one of our property experts, visit our website to locate your closest Taylor Nicholas branch for an obligation-free discussion on how we can provide certainty with your property needs.

UNIT ENTITLEMENT – HOW IS IT CALCULATED?

15-17 Chaplin Drive, Lane Cove (22)

If you are an owner of a strata unit you would more than likely have come across the term “Unit Entitlement”. Many people believe that it is based on the size of the lot, it’s not! The haphazard way of determining the entitlement on smaller schemes may have put you at a disadvantage.

When developers register a strata plan, each lot is given a unit entitlement based on what the developer believes is an estimate of the market value of that lot at that time. They are not necessarily required to have a formal valuation although typically, large staged strata schemes do.  Allowing a developer to make the decision has left the door open for potential mistakes to be made or worse, gives shady characters the power to disproportionately allocate the unit entitlement (they may have kept a unit for themselves).

The unit entitlement is generally used for:

– The amount you have to pay for levies
– The voting power you have in the strata scheme
– Your share in common property
– Right to share in compensation monies paid by any public authority resuming the whole or part of the common property
– Right to share in distributions of surplus monies in the owner’s corporation’s administrative or sinking fund

As you can see, the unit entitlement is a very important number. If it was incorrectly apportioned,  you could be paying higher-than-necessary strata fees, or on the other hand your voting power and possible share proceeds could be significantly lower than what you would actually be entitled to.

The NSW Civil and Administrative Tribunal (NCAT) can make an order to reallocate the unit entitlements of a scheme if at the time the plan was registered they were unreasonable or became unreasonable over time (for example the land was rezoned).

For more information, see section 183 Strata Schemes Management Act 1996.

You may also be interested in our previous blog, Major Changes to Strata Laws.

To contact us, visit our website for contact details of your local Taylor Nicholas office.

 

Major Changes to Strata Laws

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Collective Sale and Renewal

On 1st July 1961 the NSW Conveyancing (Strata Titles) Act came into force with the first strata being registered in Burwood. 55 years on and we now see a lot of strata buildings become very tired with minimal refurbishment and updating. On 28th October, 2015 the NSW Parliament passed legislation in relation to strata schemes in NSW. This new reform makes it possible for owners in a strata scheme to jointly end the strata scheme so the site can be sold or developed. The reforms are intended to promote urban renewal of our ageing strata schemes. The changes allow for only 75% of the owners to be in agreement to end a strata scheme. Current laws require a unanimous support to end the strata scheme.

Steps for Collective Sale and Renewal

Strata schemes will have to follow a process to ensure all owners are treated fairly and equally and will at least compensate the owners for the market value of their lot plus moving costs.

Firstly 50% or more of the Owner’s Corporation must support the idea or negotiations can go no further. The Executive Committee must first consider a proposal for the collective sale and renewal process. It will then call a general meeting to be considered by all owners.

A committee will need to be elected to investigate and develop the proposal. The committee can engage professionals including lawyers, accountants and property professionals to assist in preparing the proposal. The collective plan is to assure lot owners make informed decisions on the sale of their property. It will show the amount each lot owner will receive, the proposed settlement date, plans for moving out of the building and also detail costs that the Owner’s Corporation will be liable for.

Finally the proposed purchaser or developer must give a full and frank statement as to the intended use of the property for consideration by the Land & Environment Court.

Lot owners will have at least 60 days to consider the proposal and seek advice. For the plan to be approved it needs at least 75% of owners to agree or the plan will lapse after 12 months.

Final consideration is given by the Land & Environment Court. The court will decide whether the process has been followed and try to resolve any disputes through mediation. The court will also look at each owner’s entitlement is just and equitable and adheres to the principles of the “Just Terms Compensation”.

This new law comes into effect in the second half of 2016. Should you be interested in discussing the full potential of your strata scheme contact the experts at your local Taylor Nicholas office.

Joint Tenancy V. Tenants in Common. What is the difference?

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Land Ownership. Joint Tenancy V. Tenants in Common

When acquiring property with friends, family or business associates make sure you are aware of the differences between the two forms of legal ownership, Joint Tenancy or Tenants in Common. The default agreement tends to be as Joint Tenants though the difference is enormous.

There is one major difference between the two. If your ownership in the property is as a Joint Tenant you can not will or gift your share of the property to say your wife or children. Your share of the interest in the land will transfer to the surviving Joint Tenant(s). Tenants in Common on the other hand, do no posses a right of survivorship and any interest in the property passes according to the terms and conditions of their will.

Joint Tenancy

Joint Tenants must obtain the interest in the property in the same transaction and at the same time. All Joint Tenants have an equal interest over the whole of the property and cannot have exclusive possession to any part. Even though the interest in the property cannot be willed or gifted to another it can however be transferred.

Tenants in Common

Tenants in Common can hold either equal shares or the shares can be apportioned to reflect each owner’s contribution. It is therefore necessary for the share holding of the individual to be recorded. Similar to a Joint Tenancy, a Tenant in Common has an equal right over the whole property and not exclusive possession of any part. If you enter into this type of ownership it would be sensible to draw up a contract as to how the other shareholder(s) can dispose of their share, stating they must offer it to them first perhaps. The contract should also include an agreement as to the management and maintenance of the property.

Both types of ownership have benefits depending on your situation. Before entering into a contract for sale of land, we advise you discuss what type of ownership is most suitable to you with your solicitor.

Thinking of Selling or Leasing your property? Contact the professionals that have the experience, local knowledge and track record. Taylor Nicholas, your Prime Property Specialists.

Asbestos & The Workplace – Do You Comply?

WORK HEALTH AND SAFETY (WHS) ACT 2011 COMPLIANCE REQUIREMENTS FOR ASBESTOS

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Asbestos was widely used in building materials before 1987 so if your property was built or renovated before 1987 it most likely contains asbestos.

Every non-residential building built prior to 2004 must have an Asbestos Audit

If Asbestos is discovered on site, a register and management plan must be kept on site:
The Safe Work Australia Code was adopted by the NSW Government and has requirements and legislations for WHS in the workplace. This Code sets out the responsibilities of a Person Conducting a Business or Undertaking (PCBU) for dealing with Asbestos in the Workplace.

Asbestos Survey Requirements:
For a building to be compliant, an Asbestos Survey needs to be completed. It must now identify asbestos in the following forms:
•    Asbestos that is loose and friable
•    Asbestos Containing Material (ACM), whether friable or non friable/stable.

What if a Survey identifies Asbestos?
If Asbestos or ACM is identified in a building, the building will need to create an Asbestos Register and obtain and implement an Asbestos Management Plan (AMP).
These compliance documents need to be kept on site so they can be accessed by appropriate trades people, inspectors and occupiers.

Who Should Comply?
•    As from 1st January, 2012 a ‘responsible person’, responsible for Asbestos compliance, are defined as:
•    The owner of the premises;
•    A person who has, under any contract or lease, an obligation to maintain or repair the premises
•    A person who is occupying the premises
•    A person who is able to make decisions and changes to the structure and use of the workplace.
•    An employer at the premises
•    A person with management controls over the workplace, for example, a property management group or agent.

Should you require any further information on this or any other business property needs, call your local Taylor Nicholas office.

Make Sure 10% Of Your Property’s Value Doesn’t Go To The Tax Office!

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In a bid to assist in the collection of foreign residents’ Australian tax liabilities,  from 1st July, 2016 the Australian Tax Office will direct ALL purchasers of certain types of property to withhold 10% of the purchase price and pay it directly to the ATO.

In summary any property sold worth over $2 millon will be deemed as an overseas investment unless the vendor applies for a clearance certificate. To avoid this tax implemented by the ATO, all Australian residents and Australian resident entities’ are required to provide the purchaser with a clearance certificate prior to settlement. A clearance certificate is valid for 12 months from the date of issue and may be used for multiple transactions. Each vendor of the property has to provide their own clearance certificate to ensure no money is withheld.

A vendor may not be the only one to loose out, if you are a purchaser who does not receive a certificate and does not withhold the 10% of the purchase price, you will be liable for that amount payable to the tax department. It will surely also have attached penalties and interest as well.

Asset types
The following asset types are captured by the legislation:

Real property

  • Taxable Australian real property with a market value* of $2 million or more
  • Vacant land, buildings, residential and commercial property
  • Mining, quarrying or prospecting rights where the material is situated in Australia
  • Lease premiums paid for the grant of a lease over real property in Australia

Other assets

  • Indirect Australian real property interest in Australian entities whose majority of assets consist of the above asset types
  • Options or rights to acquire any of the above asset types

*In many cases, the market value of a property will be the purchase price. Where the purchase price has been negotiated between the vendor and the purchaser, acting at arm’s length, the ATO will accept the purchase price as a proxy for market value.

In most cases a certificate will be easily available to obtain. It will either be issued automatically or in the case where there are data irregularities or exceptions the certificate could take 14 to 28 days to be manually processed.

There may be issues if you have not filed a tax return for many years, or have a tax debt. The tax office may see the sale of the asset as a way to recoup that debt. This new tax may affect the increasing number of home owners who get together with their neighbours, to sell their property as a development site. This may be seen as a profit making scheme and may be seen as a capital gain.

It is almost certain that vendors will be caught short with these new rules. If you want certainty and are thinking of selling or leasing your property, contact the agents with over 25 years knowledge and experience in real property.

A Sad Loss with Record Results

One of the first properties Taylor Nicholas added as a management 25 years ago was a 9,764 m2 industrial site in Alexandria owned by a private investor.  Taylor Nicholas has managed this building consecutively over the last 25 years and recently negotiated the sale of this building for $18.5 million. This followed a recent spate of sales of other properties also managed by Taylor Nicholas including buildings at Auburn, Mona Vale and Lane Cove. While it is a sad day when we sell a management property, the record results we achieved for each vendor make us very proud.  These properties alone added $33.475 million to a record month in November for Taylor Nicholas.

Taylor Nicholas’ extensive Property Management experience and vast industry knowledge provides their owners with the peace of mind in knowing that their asset is being cared for to a high standard while ensuring their property’s value is maximised – something the abovementioned Landlords-come-Vendors can now personally attest to.

The current shortage of stock on the market provides an opportunity to achieve fantastic prices. If you are interested to learn what your property may be worth or if you have an investment property and would like to learn more about Taylor Nicholas’ management services, make contact with your local Taylor Nicholas office today. Visit our contact page for more details.