21 Jul 2014
Words Carla Cook

Into the POA Age

Highlighted in the media over recent times has been various State level reforms and the area of Management Rights and Property Law generally is no exception. For the moment, I would like to concentrate on POA as this reform is well?advanced with an expectation that POA will commence during the second half of this year.

Momentum for reform in the area of real estate licensing was gathered when discussion of a national, harmonised approach to occupational licensing laws was commenced.   Not only would such a collaborative approach have affected the area of interest to many readers here, but also those involved in, for example, the electrical and plumbing industries. For various reasons, a nationwide approach was not achieved however Queensland progressed with amendments to PAMDA, to bring about the forthcoming introduction of POA into the legal landscape.

So what will change?

Of particular significance is that two facets of PAMDA will be reformed in POA being in relation to the creation of binding residential contracts and also, the regulation of real estate agents and property managers. We have noted a number of key aspects below.

Residential Contracts

• Those that have entered into a contract for sale of residential property will have experienced the effects of PAMDA regarding the presentation of contracts to buyers, in a set order. We have warning statements that serve a purpose and presentation requirements that provide termination rights for non?compliance. POA will replace such regulation with a monetary penalty in place of termination rights, and a 'particular matters' written statement in place of an approved form warning statement. The latter will effectively achieve the same objective as the approved form warning statement. As a result, expect some re?drafting of the commonly adopted Real Estate Institute of Queensland Residential Contracts to provide for a 'particular matters' statement.

• Cooling?off periods will remain a part of residential contracts however, should a buyer wish to terminate during this period then a mere written statement to that effect will replace the strict legal notice requiring citation of legislation.

Real Estate Licensing and Property Management

• Many readers will hold a resident letting agent licence and be aware that restrictions in utilising this category of licence for conducting business in more than one complex can be difficult, due to the 'contiguity' principle. POA assists resident letting agents by removing the contiguity requirement however, the requirement to have an office in one of your complexes becomes necessary. As a result, office areas being granted by virtue of an occupation authority may become more prevalent in new developments to facilitate flexibility.

• The above point results in those with a resident letting agent licence being able to live off?site however, operators must keep in mind that POA does not influence existing contractual obligations established by your management rights agreements. Therefore, a requirement to live on?site is not removed because of POA.

• The ability for an operator to take leave and appoint a substitute licensee has seen amendment being that where you are absent for longer than thirty consecutive days, an application to the Office of Fair Trading will be required and approval will again be necessary where you want leave in excess of twelve weeks in a twelve month period. The only limitation to the grant of OFT approval will be that twenty six weeks in a twelve month period is the longest period that can be approved.

• There is no statutory change to absences for less than thirty days.

• A new approach to letting appointments is being taken under POA, whereby assignment clauses will become less important as a new manager upon assignment will be obliged to issue lot owners within fourteen days, notice of the their management. Lot owners will then have the benefit of a thirty day termination period as opposed to the current ninety day period maximum.

Like any reform, you take the good with the bad but the overarching principle in all business dealings remains unchanged, a solid relationship is invaluable.

Incidentally, and as of December last year, the Council Of Australian Governments decided to wind?up the National Occupational Licensing Authority that was established to oversee the harmonisation process I alluded to earlier. Maybe a harmonised approach to occupational licensing will occur in the future, but it would appear that this could only be the result of staggered action at the present time.

If you would like further information on the reform then please contact either David Burrough or Peter Spranklin on 07 3220 1144.