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The new building defect bond scheme will start on 1 July 2017, allowing time for strata buildings to be inspected and for the industry and stakeholders to prepare for the changes. The reform aims to address the concern amongst apartment owners about poor building quality and problems with construction, by increasing accountability of builders and developers, enabling defects to be identified and repaired early and prolonging the life of strata buildings.

The building bond will apply to the construction of strata buildings exceeding three storeys and require a bond of 2% of the final contract price of the building to be lodged by the developer. The bond will be used as security to repair any defective work, which may be identified under the new requirements for defect inspections.

Under the defect inspection requirements, developers must appoint an independent building inspector to prepare an interim report detailing any defects in the building within a strict period of 15-18 months post completion of the works. A final report must be completed within 21-24 months, outlining any unrectified defects previously identified in the interim report, any defects present in rectification works completed since the interim report and the scope of work for rectification of those defects. If there are no defects or they have been rectified, the bond will be returned to the developer.

Further to this, a maintenance schedule prepared by the developer must be tabled in at the first AGM of the new scheme, informing owners of their maintenance obligations.

The Real Property Amendment (Electronic Conveyancing) Act 2015 introduces priority notices for electronic lodgment via the PEXA platform, effective from 1 October 2016. A priority notice notifies interested parties who search the register of a legal or equitable interest in the land and that an instrument or transaction is pending, removing the risk of the gap between settlement and registration.

The priority notice is effective for 60 days. Once the 60 days have passed, if there has been no application for extension, the priority notice will be removed from the title. Purchasers who have entered into a contract for sale of land have a caveatable interest in the land and should therefore consider lodging a caveat rather than a priority notice which has no automatic expiration date.

A priority notice will only be available for electronic lodgment through the PEXA platform, which can be effected at b+a.

Hocking Stuart (Richmond) Pty Ltd has been fined $330,000 in the Federal Court on 6 October 2016, after admitting to misleading and deceiving buyers in relation to 11 residential properties sold in 2014 and 2015 in which property prices were underquoted in the marketing and advertising of the properties.

The Federal Court stated that price was an essential piece of information for prospective buyers, who should be able to rely on correct information to make an informed decision and the price representations made by Hocking Stuart Richmond were intended to create the ‘illusion of a bargain’ which would cause significant inconvenience to many prospective purchasers. Underquoting can cause interested buyers to waste time and money on inspecting properties, obtaining property reports, attending auctions and cause them to miss the opportunity to purchase elsewhere.

The NSW Government has conducted a review into the Residential Tenancies Act 2010 (‘the Act’) as per statutory requirements. The report has recommended that tenants should be able to exit a leasing agreement more easily in cases where they have been a victim of domestic violence from a co-tenant. The review also reviewed the rights and obligations of co-tenants, arguing for clearer terms and protections for occupants of share households under an amended enactment.

The review also recommends that any amendment to the Act will better define the interest paid on bonds, water and utility charges, the way repairs are dealt with and a shift to online submission and databases for rental bonds, tenants, and notices.

An amendment bill will be lodged to parliament in early 2017.

The New South Wales Government has taken steps to phase out paper-based conveyances by 2019. By March 2017, financial institutions will be forced to lodge documents regarding mortgages online via the government’s e-conveyancing software. This will mean that financial institutions will no longer receive paper titles, with certificates being provided in a digital format.

By March the government hopes to have consulted with other interested parties, including realty and legal firms in order to lay down a path to a paperless future. With a 2019 deadline NSW is likely to follow closely in the footsteps of Victorian and Western Australian jurisdiction who already have similar e-conveyancing systems in place.

Congratulations to Pacific Bondi Beach apartments which last month was named the development of the year by Urban Taskforce. The site which was home to the former Swiss Grand Hotel and Resort, won for the way it fused together the beachside setting with a modern take on art deco. The 2016 Development Excellence Award judges also noted that the way the site integrated and added value to the local community was key to its success.

The New South Wales government has abolished a series of duties coinciding with the start of the new financial year. The duties affected by the new taxation scheme are Mortgage Duty, Business Assets Duty and Marketable Securities Duty.

New mortgages will not be liable to any duty with exemptions including all advances and refinancing on all old mortgages. For those that have already applied for advances or refinancing an old mortgage a duty of $5 will be payable, or an exemption applied for with the Land Property Information Office, respectively. Caveats will also not be liable to duty if on a mortgage executed from 1 July, or liable to $50 duty for mortgages executed prior to 1 July. In line with these changes is that no stamping nor marking will be required before registering any mortgage.

Duty will also not apply to certain business assets such as sale of business (excluding land), goodwill, intellectual property, licensing agreements with the Commonwealth or NSW, and gaming machine entitlements, if utilised within NSW. Duties will still apply to business interest in land and certain goods.

Marketable securities including shares in a NSW company or kept within the NSW register, and units in a unit trust scheme will not be liable to duty tax, however landholder duty may still apply to companies owning over $2 million in real property.

New Commonwealth tax requirements mean the NSW Office of State (“OSR”) revenue is now required to collect information in regards to transfer of freehold and leasehold realty and supply it to the Australian Taxation Office (“ATO”).

The OSR must supply transactional reports including land title information, transfer prices, settlement dates, identity of parties involved including their resident status. The submission of such details is intended to aid the enforcement of foreign resident property investment taxes, and with use in relation to the National Register of Foreign Ownership of Land Titles. However, will also be used in wider information-matching and compliance checking procedures by the ATO.

Current obligations by vendors and purchasers will remain the same, as the OSR will supply all information directly to the ATO.