Yearly Archives: 2012

Rents rise by 13% in sought-after suburbs

Rents in Australia’s most sought-after suburbs have increased by up to 13 per cent in the last year.

Tenants are paying up to $60 a week more for accommodation than they were 12 months ago, according to figures released by RUN Property on Saturday.

Fairfield in Melbourne had the highest leap in rental prices (13.4 per cent), followed by Edgecliff in Sydney’s eastern suburbs (12.6 per cent).

These were closely followed by hikes of 11.7 per cent in the Sydney north shore suburb of Cremorne and 11.5 per cent in Surry Hills in inner Sydney.

RUN Property CEO Rob Farmer said 24 suburbs in Sydney and 18 in Melbourne saw rent increases of more than six per cent for new tenants in January, compared with the same time last year.

“The popular suburbs close to beaches, major shopping centres or train stations continue to go from strength to strength for investment property,” Mr Farmer said in a statement.

The average rent rise across Melbourne when new tenants moved in was 5.4 per cent, bring the average rent up to $383 a week.

In Sydney, the average rent increase was 7.4 per cent, up to $545 a week, while in Brisbane, rents rose by 3.3 per cent bringing the average rent to $346 a week.

Thank you Sydney Morning Herald for this article

New rules to protect kids in high-rises

Apartments and multi-storey homes are about to get a little safer for children thanks to a rule change around windows in new buildings.

The Australian Building Codes Board has ruled that all windows in new homes and apartments that are more than two metres off the ground must be either fitted with window locks that stop the window being opened more than 125mm (12.5 cm), or must have reinforced screens to prevent children from falling from a height.

The changes will be included in the National Construction Code from May 2013.

The Australian Building Codes Board estimates that owners and builders will choose to fit 80 per cent of windows with locks, and the remaining 20 with reinforced screens. Its research priced window locks from $20 – $70 each, and strong screens from $130 a square metre, putting the average cost of a suitable screen at $130.

Ron De Vere, a project manager with the Australian Building Codes Board, says the decision was made after wide consultation with industry, and with fire authorities across the nation.

De Vere said an economic analysis that took into account the cost of installing locks and screens versus society’s cost of treating children who had fallen from windows showed that the broader cost-benefit of the changes was around zero.

However, “the board was swayed by the risk to children and the danger of children falling out of buildings”, he says. “It’s a bit like the pool safety issue, the child drowning … the value of a child’s life is so crucial.”

Danny Cass, a professor of paediatric surgery at the Children’s Hospital Westmead, has welcomed the changes saying the recognition that children could access windows and easily climb or fall out of them was a win for commonsense.

“Before, they thought a kid couldn’t climb that high but … they often pull things up to it, or beds are placed next to it,” Cass says.

Just a like a pool safety fence though, children will only be protected when adults remember to lock the windows and check that the reinforced screens are in good order.

The board backed away from an initial proposal to mandate window guards for windows two stories or above in all domestic dwellings.

It also a decided against that a proposal to increase to one metre the minimum floor-to-sill height of openable windows in rooms that are four metres from the ground outside.

The minimum floor-to-sill height will effectively remain at 865mm as the current provisions require a barrier of 865mm be in place to any openable window that is more than four metres from the ground, and it is common practice to place the bottom of the window at that height, using the wall itself to create the barrier.

The floor-to-sill height requirement will remain even where a lockable or removable device or screen is in use – in case the device or screen is inadvertently unlocked or removed. However, the minimum height from ground level at which the window-to-sill or barrier rule comes into play will drop from four metres to two metres after evidence showed serious injury can happen when a child falls from just two metres.

The changes will come into effect from May 2013, a timeframe the board says will allow industry to prepare for the changes.

An average of one child a week is taken to hospital in Australia after falling from a window. According to figures from the Children’s Hospital Westmead, 80 per cent of children who have fallen from a window have significant injuries, and four out of five children who fall from windows are aged under five. For information on keeping your kids safe near windows. Cass says the next challenge is making windows in existing housing and apartment stock safer for children. Cass is part of a working party on child falls at the Children’s Hospital Westmead. The group will meet again this month to explore further recommendations for existing properties.

Thank you Sydney Morning Herald for this article

The Finances of Litigation

Financing any form of litigation is extremely expensive and building defect litigation is no exception. In fact, because construction defect cases often involve multiple rounds of testing and investigation, additional expert fees can make this one of the most expensive forms of litigation.

Using Reserves

By their nature, building defect cases tend to arise early in the life of a scheme when capital reserves will be low or non-existent. However, if there is money in the sinking fund, this can be used to finance litigation to the extent that the claim relates to repair, replacement, restoration or maintenance of major components for which the sinking fund was established.

Bank Loans

Some banks will lend money to strata schemes to maintain and repair common property but so far this has not extended to financing defect investigations and litigation. Owners corporations and community associations are not permitted to give security for such loans and this makes financing litigation difficult.

Solicitor’s Finance

Unlike the current trend in America, construction defect lawyers in Australia are unlikely to finance testing and repairs or other outlays like barristers fees because of the constraints in Australia on contingency or success fees. The practice of advancing money for outlays or extending credit for work in progress is fraught with conflicts of interest on the part of the lawyer in terms of being objective about the advice to the client when the lawyer has a financial interest in the outcome.

Thanks to Teys Lawyers

Housing Review a major step forward

The NSW Government’s review of potential housing opportunities reported in the media today shows the government’s commitment to boosting housing supply and increasing affordability in a common-sense and transparent way, UDIA NSW believes. In what is one of the biggest steps forward for NSW housing supply for years, the Government has given a commitment to pursuing housing opportunities where the landholdings are, rather than designated growth areas that suffer major land fragmentation issues.

Late last year Planning and Infrastructure Minister Brad Hazzard made a public call to developers with large landholdings, close to infrastructure, to approach the State Government with their projects, in recognition that residential development in NSW had stagnated for many years. This month, the Government published online the results of that process: a list of 43 sites which are potential candidates for rezoning for urban development under the Review of Potential Housing Opportunities on Landowner Nominated Sites.

In the Sydney region, the sites are in the local government areas of Auburn, Blacktown, Camden, Campbelltown, City of Sydney, Hornsby, Liverpool, Penrith, Pittwater, Sutherland, The Hills, and Wollondilly. Regionally, the sites are in the local government areas of Cessnock, Clarence Valley, Hawkesbury, Port Stephens, Wingecarribee, and Wyong. Submissions closed on November 29 and the review process is predicted to be finalised in the first quarter of this year.

The projects are being assessed on three criteria, according to the Department of Planning and Infrastructure’s website:

  1. Housing delivery: The site is suitable for urban development and has viable prospects to produce houses in the short term.
  2. Infrastructure: Infrastructure and services for new communities will be delivered in a timely and efficient manner and at no additional cost to Government.
  3. Strategic setting: The proposal supports the broadly planned pattern of growth and urban policies.

The process is governed by a Chief Executives’ Review Committee, which is chaired by the Director-General of the Department of Premier & Cabinet. Recommendations will then be made to State Government. Consultation will take place with the relevant Councils to seek their feedback on the proposals. Today, in the Sydney Morning Herald, Minister for Planning and Infrastructure Brad Hazzard said many of the nominated sites were outside the growth centres and that the growth centres strategy had failed. “The lines on the maps for the growth centres are supposed to encourage development in those areas, but it has not worked and the corollary has been it deterred development outside these lines,” Mr Hazzard told the newspaper.

UDIA NSW believes this process shows the government is deeply committed to fostering housing growth and that it is also being transparent about the process and consultative with councils, which is essential. UDIA NSW Chief Executive Stephen Albin said says he believes the process is a realistic approach to fostering development where the landholdings are, rather than simply rezoning land in areas of fragmented ownership. “Our own research, which we have put to Government, clearly shows that the large sites where the landowners have been ready, willing but not yet able to develop are largely outside the growth centres,” he said. “It is clear, for the state to meet its future population and economic growth targets, that the process needs to take into account achievable development rather than operating off a wish-list that may not be viable or achievable.” “We support development that is led by the realities of the industry, whether it is inside or outside a growth centre – so long as it is commercially viable, sustainable, and supported by the appropriate infrastructure.” “As an industry group, we feel it is important to stress that this process is one that will benefit the state as a whole, in terms of housing affordability and economic growth.”

Thank you to UDIA NSW for this Article

Tenants’ groups push for renters to have a greater say on building management

TENANTS should be allowed to attend owners’ corporation meetings to give renters a much greater say in how their strata buildings are managed and maintained, tenants’ groups and strata experts have said.

There should also be changes to the legislation to stop the misuse of bylaws, such as banning pets from buildings, as part of the state government’s review of the strata laws, a leading strata law expert, Cathy Sherry, said.

As part of its review, the government last month launched an online forum to give people and businesses the chance to discuss and debate potential amendments to the strata legislation.

One of the big issues raised was inviting tenants to meetings held by the owners’ corporation.

Chris Martin, the senior policy officer with the Tenants’ Union of NSW, said strata bylaws were often the biggest problem faced by tenants, especially those banning pets in buildings or delays in repairs to common areas.

“About half the people living in strata [buildings] are tenants so generally we would be supportive of tenants being given more of a say,” he said.

He said one of the most problematic bylaws tenants came up against was the prohibition of pets. “Really it should be about the ability of a responsible adult to make a responsible decision,” Mr Martin said.

The last review of the Strata Schemes Management Act was carried out in 2004 and a review of the Community Land Management Act was last conducted in 2006, but the government said only “cosmetic reforms” were achieved.

Ms Sherry, a senior lecturer in law at the University of NSW, said there was good reason for tenants to be more active in the running of their building, especially if they have lived in it for many years.

“Tenants are often much more connected to the building than an absent investor-owner,” she said.

“Owners obviously need to have a say because they are the ones that own the buildings but there should also be a way to give renters a say, so perhaps that could be renters collectively getting one vote or a tenants’ forum.”

More than 2 million people now live in over 70,000 strata schemes in NSW and within 20 years, half the state’s population are expected to be living in strata and community schemes.

Alexandra Smith

Thank you for TEYS Lawyers for this article