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    Buying or Selling Property

    In order to secure the sale of a property, a common condition of the Contract for the Sale of Land/ Strata Title is that the seller will receive a deposit from the buyer.

    This deposit is generally 10 per cent of the selling price, but this can vary case by case.

    When a deposit is required, the seller nominates who holds the deposit (usually the seller's agent) in trust until settlement.

    The seller's agent may comply with a request that the deposit be placed in a separate interest earning account if they are satisfied the deposit exceeds $20,000 or that the transaction is not to be settled within 60 days.

    The seller's agent cannot release a deposit without the agreement of all parties.

    If a deposit is required but not received by the nominated date then the seller can terminate the contract and proceed with any other offers.

    The role of the conveyancer is to ensure that any encumbrances such as a mortgage, caveat or writ will be paid out or satisfied at or prior to settlement.

    You will be asked to nominate a conveyancer to represent your interests in transferring the property to your name at the time the Contract is agreed to.

    What is the role of the real estate agent that represents the buyer?

    The role of the real estate agent representing the buyer includes:

    • Identifying the buyer’s requirements.
    • Identifying suitable properties that may or may not be currently for sale.
    • Researching previous sales price statistics for the selected properties.
    • Determining all matters relevant to possible transactions e.g. title searches, the legality of structures and the legality of the use of the property.
    • Drafting any special conditions to a proposed contract.
    • Arranging inspections.
    • Conducting negotiations for the selected property.
    • Obtaining the property at the lowest possible price.
    • Accurately defining the subject matter of the sale i.e. what is included in the sale.
    • Preparing the Offer and Acceptance and drafting any appropriate special conditions.
    • Presenting a written offer and negotiating sale price.
    • Explaining the Contract for the Sale of Land by Offer and Acceptance and the Joint Form of General Conditions for the Sale of Land.
    • Explaining the effect of any variations to the Contract that may be requested by the seller or the buyer e.g. extensions of time for finance approval or settlement.
    • Monitoring the contract from sale to settlement, especially the satisfaction of any special conditions.
    • Arranging and attending the pre-settlement inspection.
    • Liaising with the settlement agent/solicitor and other parties to facilitate settlement.

    Can I authorise a real estate agent to act on my behalf?

    Yes, in the same way that you can authorise a real estate agent to represent you in the sale of a property, a real estate agent can represent you in the purchase of a property.

    The primary purpose of retaining an agent would be for his/her negotiation skills thereby purchasing the property at the lowest possible price.

    You would agree to a fee with the associated level of service that is required.

    The real estate agent would not receive a fee from the seller.
    Since August 2009, sellers of residential properties have been required by state law to have at least two RCDs installed in the property. These safety devices must be fitted at the meter box (main switchboard) or distribution board for the residence by the settlement date. 

    The same law applies to owners with rental properties. Any residential property being leased must have RCDs fitted prior to the time the property is leased.  

    These devices can save people from electrocution. RCDs can also protect against fires which can start from small leakages of current from wires with damaged or perished insulation. Any licensed electrician can supply and fit the RCDs on the switchboard to a property. 

    There can be an exemption where the buyer will be demolishing the property. In such cases the seller should obtain a notice of intended demolition from the buyer prior to settlement. The notice will state the new owner’s intention to demolish the premises within six months after the settlement.

    The Electricity Regulations 1947 set out the Penalty for not installing RCDs: 
                      (a)    in the case of an individual — a fine of $15 000;
                      (b)    in the case of a body corporate — a fine of $100 000.

    In addition to this RCDs requirement, there is also a requirement to have hard-wired smoke alarms, no more than ten years old, in all residential properties being sold or made available for lease. The common battery operated smoke alarms will no longer be sufficient. 

    In situations where a hard–wired alarm cannot be fitted (such as flats or units with concrete ceilings that won’t facilitate new wiring), then long-life lithium battery operated smoke alarms must be installed. 

    For more information about RCDs visit the Energy Safety website.  

    For more information about smoke alarms please visit the Department of Fire and Emergency Services website. 


    What is the process when there are multiple offers on a property for sale

    There is no right or wrong procedure.

    It is important to remember that it is always a seller’s right to assume that any offer received from a buyer is their best offer.

    If the seller has several offers to consider then the seller may ask the agent to inform the buyers that there are multiple offers and that the buyers have until a specified time to present their best offer.

    The seller could also decide to only negotiate with one of the offers.

    What is a 48 hour clause?

    This is a condition that the buyer and seller can agree to include in a contract for the sale of land.

    It is normally inserted when the buyer wants to make an offer that is conditional upon the buyer selling their own property i.e. if the buyer does not sell his house then the buyer will not be obligated to buy the seller’s house.

    The seller may like the buyer’s offer but is aware of the uncertainty of the buyer selling their property and the length of time that this may take.

    To guard against the risk, the seller proposes that they have a special condition whereby the seller will continue to market the property and if an alternative offer is received by the seller then the buyer will have two business days (48 hours) in which to make their offer not conditional upon the sale of the buyer’s property.

    If the buyer does not waive the condition of selling their own home, then the seller can terminate the contract and then enter into another contract with the alternative buyer.

    REIWA does provide a standard clause for its members to use.

    Buyers and sellers are encouraged to fully understand any 48 hour clause before agreeing to it

    What do I look for when doing the final inspection prior to settlement of the property I am buying?

    The purpose of the final inspection is to ensure that the property is in the same state and condition that it was in immediately prior to signing the contract.

    The seller in the Joint Form of General Conditions at section 9.1(e) has made a representation to the buyer that the property at settlement will be in the same condition as it was in immediately before the Contract Date.

    The purpose of the final inspection is not to find minor faults with the property and then expect the seller to fix those items.

    The buyer, prior to submitting an offer, should have made themselves familiar with the state and condition of the property and noted any discloses by the seller through their real estate agent about the state and property.

    The buyer would also be looking to ensure that the seller has complied with any special conditions on the contract. For example the seller may have agreed to repair a cracked wall.

    I have just found out there are unapproved structures on the property prior to settlement, what do I do?

    The answer depends upon whether the seller knew the structure did not have local government approval.

    If the seller did not know then the contract would proceed to settlement without any further obligation upon the seller.

    If the seller did know but did not disclose that fact to the agent to in turn relay to prospective buyers then the contract would proceed to settlement. In this instance the buyer could take action against the seller to recoup any damages they incurred as a result of the seller not disclosing relevant information.

    Settlement is delayed, what are my options?

    Section 4 of the Joint Form of General Conditions provides contractual conditions for the event of a delay in settlement through setting out the rights and obligations of the buyer and seller depending on whether it is a buyer or seller delay.

    What happens if finance is not approved by the date on the contract?

    On the assumption that you have used the REIWA standard contract, the contract continues on until either the seller terminates the contract or the buyer satisfies the finance condition and notifies the seller.

    When can I have the keys to the property once it’s settled?

    This is addressed in section 6.5 of the Joint Form of General Conditions for the Sale of Land.

    Essentially the buyer is entitled to the keys at settlement or on possession.

    If immediately prior to settlement the seller occupies the property as the seller’s principal place of residence then the seller may remain in occupation until 12 noon on the day following settlement. If that is the case then the buyer will not be entitled to the keys until 12 noon on the day following settlement.

    The Joint Form of General Conditions for the Sale of Land which forms part of the Contract are additional conditions to those already incorporated or written into the Contract for the Sale of Land/Strata Title by Offer and Acceptance.

    The Joint Form of General Conditions for the Sale of Land largely clarifies areas where there is the potential to have a legal dispute about the contract, the property, or the settlement of the property.

    The Joint Form of General Conditions for the Sale of Land is reviewed every few years by the Law Society of Western Australia and the Real Estate Institute of Western Australia.

    A Selling Agency Agreement is a written agreement whereby the agent is authorised by the seller/owner to find a buyer for a particular property. The agent is required by law to have written authority.

    REIWA produces standard Selling Agency Agreements for use by its members. These agreements are worded to equally protect the rights and obligations of the seller/owner and the agent.

    The Selling Agency Agreement will detail the name of the seller/owner, the property details, the agreed fee for the agent finding a buyer, terms and conditions detailing the rights and obligations of seller and agent, and any agreement relating to the seller contributing towards the costs of marketing the property.

    REIWA's standard exclusive agency agreements have received authorisation from the Australian Competition and Consumer Commission.

    First Home Owners Grant

    To be eligible:

    • At least one of the applicants must be an Australian citizen or have permanent residency in Australia.
    • None of the applicants must have previously owned a home anywhere in Australia. If an applicant's spouse or de-facto partner has previously owned a home, no grant will be available.
    • Applicants must occupy the home purchased as their principal place of residence.
    • Except in the case of legal disability, applicants must be natural persons (that is not a company).
    • Everyone with an interest in the home is considered an applicant.

    As part of the Intergovernmental Agreement on the reform of Commonwealth-State Financial Relations, the states and territories established the First Home Owners Grant (FHOG) in June 2000 to provide financial assistance to Australians buying their first home.

    The FHOG was introduced on 1 July 2000 to offset the effect of the goods and services tax on home ownership. It is a national scheme funded by the states and territories and administered under their own legislation.

    Under the scheme, a one-off grant of either $10,000 or $3,000 is payable to first home owners that satisfy all the eligibility criteria.

    $10,000 will be paid to eligible first home buyers signing a contract to build or purchase a new home and owner builders that commence laying foundations for the construction of a home.

    First home buyers signing a contract to purchase an established home will be eligible to receive a $3,000 grant.

    A copy of the Act can be purchased from the State Law Publisher, 10 William Street, Perth.

    When can I lodge an application?

    An application for the Grant may be lodged any time after a contract to buy or build is made; or the foundations are laid on an owner built home, provided the application is lodged within 12 months of the completion of the transaction.

    Where can I obtain application forms?

    • From Approved First Home Owners Grant (FHOG) Participants
    • From the State Revenue Department; or
    • By visiting firsthome.gov.au

    What evidence do I need to provide with my application?

    The following documentary evidence will need to be provided to establish your eligibility for the Grant.

    • If you were born in Australia - a certified copy of your Birth Certificate or Australian Passport.
    • If you are a Naturalised Australian, a copy of your Certificate of Australian Citizenship or Australian Passport.
    • If you are a permanent resident - a copy of your Permanent Resident Visa.
    • If you are purchasing an established home - a signed copy of the Offer and Acceptance or Transfer of Land document.
    • If you are contracting to have a home built - a signed copy of the Building Contract.
    • If you are an owner builder - evidence of the actual costs to you and evidence confirming the home is ready for occupation.

    What are the penalties for false or misleading statements?

    Making a false or misleading statement in connection with an application for a Grant carries a penalty of up to $20,000, and you may be required to repay the Grant, interest and other costs.

    Where can I lodge the application?

    Through Approved FHOG Participants or through the State Revenue Department.

    What can I do if the Commissioner rejects my application?

    If you are not satisfied with the Commissioners decision to reject your application, you may lodge an objection.

    The objection must:

    • Be in writing
    • State fully the grounds on which you rely
    • Be lodged within 60 days of the decision

    Should you not be satisfied with the Commissioners determination of the objection, you may have the matter referred to the Local Court on appeal.

    Are there any conditions attached to how the Grant may be used?

    No. If you are eligible, there are no conditions as to how the Grant funds may be used.

    When will the Grant be paid?

    When lodging through the State Revenue Department the Grant will be paid:

    • In respect of an established home after the applicants interest is registered on the title; and
    • In respect of a contract to build or an owner builder after the date the home is available for occupation.

    When lodging through an Approved First Home Owners Grant (FHOG) Participant the Grant will be paid:

    • In respect of an established home on or after the settlement date;
    • In respect of a comprehensive building contract, on or after the final progress payment; and
    • In respect of an owner built home, on or after the date the property is ready for occupation.

    An Approved FHOG Participant is a body (usually a financial institution) that has an arrangement with the Commissioner to receive and process applications.

    Does my income affect the Grant?

    No. The Grant is not means tested. The income of applicants is not taken into account when establishing eligibility for the Grant.

    Does the value of my home affect the Grant?

    No. Provided your home is valued at $7,000 or more. There is no valuation ceiling on the home you purchase or contract to build.

    What type of dwelling qualifies for the Grant?

    Any dwelling that is suitable as a residence. It can be a single dwelling, duplex, flat, townhouse etc. It must be connected through the land, to water and sewerage services. A houseboat or caravan is not eligible. The Grant will not be available for renovations to an existing building or for the purchase of vacant land.
    Goods and Services Tax

    Further information on the Goods and Services Tax can be obtained by contacting the Australian Tax Office on 13 24 78 or by visiting ato.gov.au.

    At an auction where the Goods and Services Tax (GST) is applicable to the proceeds of the sale, such as commercial property, the price paid will contain GST if the auction is conducted on a GST-inclusive basis and the vendor is registered.

    However it is possible that auctions may be conducted on a GST-exclusive basis whereby the "knock down" amount will be the value excluding GST.

    If the vendor is registered, GST will need to be added to obtain the sale price.

    It is important that the auctioneer advises the buyers whether the vendor is registered or not and whether or not the auction is being conducted in a GST-inclusive or GST-exclusive basis and whether the Margin Scheme has been used.

    Yes. Eligible first home buyers will receive assistance of $7,000.

    You will be eligible to apply if you;

    • are buying or building your first home.
    • are an Australian citizen or permanent resident.
    • intend to make the home your principal residence.
    • start living in the home within a reasonable time.

    The payment will be the same regardless of your income or of the area in which you are buying.

    It does not matter if you are buying a new or established home. The benefit will only be paid for the purchase of your principal place of residence - not for a holiday house or investment property.

    The payment will be available if you enter into a binding contract to buy an existing home or build a new home. It will also be available to owner builders.

    The Margin Scheme provides relief to property transactions by allowing a reduced amount of the Goods and Services Tax (GST) to be paid. It applies to the supply of freehold interests in land, strata units and long-term leases.

    The GST is normally applied to the full sale price of taxable goods and services, however a property developer who is registered for GST may choose to only apply the GST to the margin.

    The margin is the difference between the sale price (including GST) less the original purchase price of the development site or, in the transition, the difference between the sale price and the valuation of the property (including works in progress) as at 1 July 2000.

    The Margin Scheme ensures the GST is payable only on the value added by the developer. It also reduces the GST component applicable to the sale of new residential property sold by developers after 1 July 2000 who are registered for GST.

    The Goods and Services Tax (GST) is a 10 per cent tax on most goods and services supplied in Australia since 1 July 2000.

    The consumer bears the cost of the GST through the pricing structure of the goods and services they purchase. However it is the seller of the goods and services that is responsible for remitting the GST collected from sales, to the Australian Tax Office.

    GST will apply to many (not all) types of property transactions. However, the treatment of property for GST purposes depends on whether it is private residential, commercial residential, commercial property or a farm.

    Should all commercial property owners register for GST?

    Goods and Services Tax (GST) will apply to the sale of all commercial property by a registered entity, such as commercial property owners with annual turnover (including rental income) greater than $50,000.

    Commercial property owners who generate turnover (including rental income) less than $50,000 may choose to register for GST. A property owner must group all of his or her enterprise together to determine whether to register for GST.

    If an unregistered commercial property owner also does not have an Australian Business Number (ABN) to include on rental invoices issued to a tenant, then there is a risk the tenant will be required to submit part of the rental payments directly to the Australian Taxation Office (ATO).

    In this situation the unregistered commercial property owner may consider the merits of just applying for an ABN. For further information on the implications of GST and PAYG, owners should contact their financial advisers.

    Will GST apply to strata levies?

    A body corporate with an annual turnover of $50,000 or more must register for GST. A body corporate with an annual turnover of less than $50,000 may choose to register.

    A registered body corporate will be required to include GST in the amounts levied on proprietors. The body corporate will be entitled to input tax credits for the GST included in costs such as electricity, management, cleaning, repair and maintenance services. It will also be required to lodge a Business Activity Statement for each tax period.

    Will GST apply to the sale price of commercial property?

    GST will apply to the sale of all commercial property by a registered entity, such as commercial property owners with annual turnover (including rental income) greater than $50,000. Entities that generate turnover (including rental income) less than $50,000 may choose to register for GST.

    GST will apply to commercial property sales that are settled on or after 1 July 2000. The seller must pay GST on the full amount of the sale value of the commercial property unless the seller is eligible for and chooses to use the margin scheme.

    Will GST apply to commercial property rentals?

    GST will apply to leases of commercial property entered into from 1 July 2000.

    Transitional provisions cover leases entered into prior to 1 July 2000. Full details of the transitional provisions are available from the ATO.

    Will GST apply to the sale price of farm land?

    The supply of farmland will be GST free if the supplier has carried on a farming business on the land for at least five years before the sale. In addition, the purchaser of the farmland must intend to operate a farming business on the land.

    If the farmland is used for a different purpose, an increasing adjustment will be required to be made.

    A large farm may be subdivided into a number of smaller farms and sold off. These supplies would be GST free provided each of the farms can operate separately.

    Will GST apply to the sale of a going concern?

    The supply of a going concern (including a business) is GST-free in the following circumstances:

    • The purchaser must be registered or required to be registered for GST.
    • The supplier must carry on the business until it is sold.
    • All of the things required for the continued operation of the business must be supplied.
    • Both parties must agree in writing that the supply is a going concern.

    Can the buyer of a commercial property claim a credit for the GST included in the sale price?

    If the buyer is registered for GST, then the buyer may be able to obtain an 'input tax credit'. The claim will depend on whether the seller has applied the margin scheme to calculating the GST liability.

    Prior to making an offer to buy commercial property the buyers of commercial property should determine how the GST has been calculated.

    Will GST apply to the sale price of a residential investment property?

    Generally Goods and Services Tax (GST) will not apply to the sale of existing residential property irrespective of whether it is a family home or an investment property. However GST will apply to the sale price of newly constructed homes, including investment properties, sold by a developer who is registered for GST.

    See Margin Scheme for details on GST relief for developers.

    Will GST apply to the rental income from a residential property?

    No. GST does not apply to residential rents.

    Will GST apply to the outgoings associated with the Lease?

    GST will apply to most of the outgoings. Some of the exceptions include rates and taxes, and financial services such as bank fees and interest charges.

    Will the GST component of (income) tax deductible expenses associated with owning an investment property also be allowed as a deduction?

    Owners should seek qualified advice. Generally however, the entire cost (including GST) will be allowed as a deduction for income tax purposes where you are not entitled to claim input tax credits.

    Do owners of residential rental properties require an ABN?

    The Australian Tax Office has announced that owners of residential rental properties will not need an Australian Business Number (ABN), even if there is some minor business use of the property by the tenant.

    There will also be no requirement for residential rental property owners to quote an ABN to any organisation that is providing residential accommodation for its own employees, such as the Defence Housing Authority.

    If a residential property owner wants an ABN they are entitled to one as an enterprise, but they do not require one for PAYG purposes.

    Will GST apply to the proceeds of the sale of the family home?

    No, the Goods and Services Tax (GST) will not apply to the proceeds of the sale of existing residential real estate, including the existing family home, unless the home was built by an owner-builder in the course of their enterprise in which case it will be the sale of new residential premises i.e. a taxable supply.

    Will GST apply to the sale of homes by the original owner builder?

    In the majority of cases, persons who sell homes they built themselves (owner builders) are not subject to GST. The exception to this is owner builders who construct a dwelling in the course or furtherance of their building enterprise and who would be required to register for GST.

    Will GST apply to all expenses associated with owning a residential property?

    GST will apply to most expenses associated with owning an investment property (such as repairs and maintenance, management fees, accountancy costs, postage costs and advertising) unless the acquisition of the goods or services is from an unregistered entity.

    However there are two important exceptions; GST will not apply to rates and taxes, and financial services such as bank fees and interest charges, associated with owning a rental property.

    Will GST apply to the sale price of an existing home?

    No, GST will not apply to the sale price of residential properties that are not new.

    Will GST apply to the supply of vacant residential land?

    GST will apply to the sale of vacant residential land notwithstanding that it may have been sold previously if the entity selling the land is registered or required to be registered for GST.

    The supply is made in the course or furtherance of the entity’s enterprises, the entity makes the supply for consideration and the supply is connected with Australia. However the parties to the sale of land may consider the application of the Margin Scheme to reduce the amount of GST payable on the sale.

    Will GST apply to the sale price of newly developed vacant residential land?

    GST will apply to the sale of newly developed residential land by developers who are registered for GST.

    Will GST apply to the price of newly constructed homes?

    GST will apply to the cost of building a new home and to the supply of a new home purchased directly from a developer. GST will be included in the contract price for the construction of a new home. The GST will replace existing sales taxes.

    Will GST apply to real estate agent's management fees?

    Yes. GST will apply to the agreed fees that real estate agents will receive, including letting fees, sales commissions and property management fees.

    Will GST apply to fees for services provided by real estate agents?

    Yes. GST will apply to the agreed fees that real estate agents will receive, including the sales commission and property management fees.

    Will GST apply to the Letting Fee that the owner pays the real estate agent?

    Yes. GST will apply to the agreed fees that real estate agents will receive, including letting fees, sales commissions and property management fees.
    Real Estate Agents
    No, there is no period of time in which you can change your mind after appointing a selling agent.
    A sales representative is a person who has been authorised by the Department of Commerce Consumer Protection, after achieving the required educational requirements, to conduct real estate transactions on behalf of a real estate agent.
    Under common law the duties of an agent include:

    • To perform obligations under the agency contract and follow instructions
    • To perform duties with due care and skill
    • To act in good faith in the principal's interest
    • Not to divulge confidential information acquired in the course of the agency appointment
    • To keep clients money separate from the agent’s money and to account to the principal for monies received or expended on the principal's behalf

    The agent needs to be informed about all the information you know about the property.

    If you know that something does not work e.g. a bathroom exhaust fan or an improvement to the property that does not have council approval, then you must inform the agent.

    The agent will have an obligation to relay all relevant information to prospective buyers prior to them entering into a contract.

    The agent will include relevant information in the contract so that there can be no misunderstandings e.g. the dishwasher is not included in the sale of the property.

    Prior to entering into a Selling Agency Agreement it is important you understand the level of service the agent will be providing for the agreed selling fee.

    While it is reasonable to expect that sellers will be price sensitive, it is very important to understand what you will be receiving for the agreed fee.

    Ask questions about the marketing that will be undertaken like, who will be conducting the promotion of the property (the agent you are dealing with or one of the team members?), the frequency of home opens, and the level of feedback from the agent.

    It is also important to understand the agent’s view of the market price of the property and how that has been obtained.

    While a high price sounds attractive, if your property is priced above market value then it is unlikely to sell and the marketing and promotion could be a waste of money.

    The service of a real estate agent will be dependent upon the type of agency appointment.

    The types of agency appointment are;

    • Acting on behalf of a seller
    • Acting on behalf of a buyer
    • Acting on behalf of an owner

    The services of an agent acting on behalf of a seller may include:

    • Inspecting the property.
    • Providing a market appraisal.
    • Researching comparative sales evidence.
    • Research the Certificate of Title and any documents relating to encumbrances.
    • Provision of a marketing plan that would consider the price, the most suitable type of promotion and the attributes of the property.
    • Recommend ways to optimise the appeal of the property.
    • Recommend the most appropriate types of advertising.
    • Determine and research any existing tenancy arrangements.
    A real estate agent is a person who has received a licence from the Department of Commerce Consumer Protection to enter into various contractual relationships for real estate transactions.

    An act of the Western Australian Parliament- the Real Estate and Business Agents Act 1978 (the Act) makes provisions with respect to the regulation and supervision of certain persons acting in respect of real estate transactions or certain business transactions.

    These real estate transactions include:

    • Introducing buyers to owners who wish to sell property.
    • Introducing property to buyers who wish to purchase property.
    • Management of property that is available to lease.

    Only people who have received a licence can assist in the buying selling and management of property that they do not own.

    To be granted a licence a person must have:

    • Completed formal educational requirements whereby the duties and obligations of the Act are fully understood.
    • Be of good character and repute and be a fit and proper person to hold a licence.
    • Have attained the age of 18 years.
    • Possess sufficient material and financial resources to enable the agent to comply with the requirements of the Act.

    What fee is paid to the real estate agent for the service provided?

    Government regulations do not fix fees charged by real estate agents. The level of fees is by agreement between the real estate agent and principal.

    The fee will be dependent upon the quality and quantity of the services that the principal requires and are appropriate to the property for sale.

    The aim is to ask for and receive those services that you are most comfortable with, and those which are most likely to find a buyer or tenant for your property in a reasonable period of time, at a reasonable cost, and at the best possible price.

    Will different agents quote different fees for the same type of service?

    Yes, because there is no limit on the maximum fee that you can agree. However, to compare the fees of various agents you need to compare the services that are being agreed. Your agent will discuss the range of services available to you, and suggest the most appropriate package to match your requirements.

    How do I know I am receiving value for money for the agreed service?

    Research on a national basis shows that more than 90 per cent of sellers are more concerned with getting the right service from a professional, reputable agent than simply agreeing to the lowest price. Remember that with agent’s services - as with most things - you get what you pay for.

    How do I agree upon a fee?

    There is no government regulation as to the maximum fee that an agent may charge for his/her services.

    The agent and the owner/seller must agree to the fee and it will be dependent upon the services the seller hires the agent to supply.

    The agreed fee may be typed or in writing, but must be initialled by the owner/seller.

    When is the agreed fee paid to the agent?

    The agreed fee is paid;

    • Where the service is the sale of a property or a business, then the agent's selling fee is paid at settlement.
    • Where settlement is defined as the legal entitlement to the property passing from the owner to the buyer, or upon the buyer taking possession of the property.
    • Where the service relates to the management of property, the agreed fees are normally paid monthly.

    What do I do if I am not happy with the fee that I have agreed?

    Firstly, you should discuss your concerns with the real estate agent or sales representative.

    If you consider the behaviour of the agent in the process of agreeing to the fee has been unjust, then you may contact the Department of Consumer Protection on 08 9282 0777 or REIWA on 9380 8200.

    Can REIWA suggest a suitable fee to pay for an agent's service?

    REIWA does not supply any guidelines as to the level of fees that could be paid to a real estate and/or business agent for their service.

    REIWA does not monitor the fees charged by its members.

    Furthermore, it could be deemed a breach of the Competition and Consumer Act for REIWA to be suggesting what fees could be suitable.

    Fees are set by market forces. REIWA can only suggest that people compare the fees and service offered between several real estate agents before enlisting their service.

    What is the role of the real estate agent that represents the buyer?

    The role of the real estate agent representing the buyer includes:

    • Identifying the buyer’s requirements.
    • Identifying suitable properties that may or may not be currently for sale.
    • Researching previous sales price statistics for the selected properties.
    • Determining all matters relevant to possible transactions e.g. title searches, the legality of structures and the legality of the use of the property.
    • Drafting any special conditions to a proposed contract.
    • Arranging inspections.
    • Conducting negotiations for the selected property.
    • Obtaining the property at the lowest possible price.
    • Accurately defining the subject matter of the sale i.e. what is included in the sale.
    • Preparing the Offer and Acceptance and drafting any appropriate special conditions.
    • Presenting a written offer and negotiating sale price.
    • Explaining the Contract for the Sale of Land by Offer and Acceptance and the Joint Form of General Conditions for the Sale of Land.
    • Explaining the effect of any variations to the Contract that may be requested by the seller or the buyer e.g. extensions of time for finance approval or settlement.
    • Monitoring the contract from sale to settlement, especially the satisfaction of any special conditions.
    • Arranging and attending the pre-settlement inspection.
    • Liaising with the settlement agent/solicitor and other parties to facilitate settlement.

    Can I authorise a real estate agent to act on my behalf?

    Yes, in the same way that you can authorise a real estate agent to represent you in the sale of a property, a real estate agent can represent you in the purchase of a property.

    The primary purpose of retaining an agent would be for his/her negotiation skills thereby purchasing the property at the lowest possible price.

    You would agree to a fee with the associated level of service that is required.

    The real estate agent would not receive a fee from the seller.
    Renting Residential Property

    Can tenants make urgent repairs?

    Urgent repairs are defined by the Residential Tenancies Act and fall into two categories: repairs that are necessary for the supply or restoration of an essential service and other urgent repairs.

    Essential services are listed as electricity, gas, a functioning refrigerator (if one is provided with the premises), waste water management treatment and water generally, including the supply of hot water.

    Arrangements for repairs that are necessary to supply or restore an essential service must be made with a suitable repairer within 24 hours.

    Urgent repairs are those that are not necessary for the supply or restoration of an essential service, but may nevertheless cause damage to the premises, injure a person or cause undue hardship or inconvenience to the tenant e.g. a broken window.

    Arrangements for these repairs must be made within 48 hours.

    In every tenancy, if the need for urgent repair is required other than as a result of a breach of the agreement by the tenant the following must be adhered to:
    • The tenant is to notify the owner or the property manager of the need for urgent repairs as soon as practicable.
    • The owner is to ensure that the repairs are carried out by a suitable repairer as soon as practicable after that notification.
    • If within 24 hours (in the case of repairs for the supply or restoration of essential services or 48 hours in the case of other urgent repairs), the owner or property manager cannot be contacted, or the owner fails to ensure that the repairs are carried out by a suitable repairer, the tenant may then arrange for the repairs to be carried out to the minimum extent necessary to effect those repairs.
    • If a tenant arranges for repairs to be carried out, the owner must, as soon as practicable reimburse the tenant for any reasonable expense incurred by the tenant in arranging for those repairs to be done.

    REIWA forms are copyright for use by REIWA members only. However, the Department of Commerce administers the Residential Tenancies Act.

    You can find relevant information by visiting the Department of Commerce website or by phoning 1300 30 40 54.

    REIWA has a free telephone service for members of the public if they have any questions about buying, selling or renting property. This number can also be called if you have a concern or wish to register a complaint about a REIWA agent. 

    The REIWA Public Information Line is open Monday to Friday each working week, between 9am and 12pm and then again between 2pm and 5pm. You can phone them on (08) 9380 8200. 

    You can also visit the Department of Commerce's website or phone them on 1300 30 40 54 for answers to your queries. 

    How do I break a periodic lease?

    If you have a periodic lease then all you need to do is provide 21 days notice in writing to your property manager or landlord. Your lease will then end 21 days later.

    If doing this by ‘snail mail’, it’s best to add a couple of days extra. So you might, for example, give 23 days notice just to be sure and for courtesy.

    How do I break a fixed-term lease?

    A fixed term lease is more complicated as there is no automatic right of termination. To break a fixed term lease you would initially seek the owner’s permission (via property manager if your accommodation is professionally managed).

    The lessor is the owner of the property so you would approach the property manager if your accommodation is professionally managed through an agency.

    Usually the owner will agree to a termination at a point in time when an alternative tenant commences a new lease. In other words, the owner is looking for a smooth swap with minimum fuss and no cost.

    If the property owner is confident you are able to move out and new tenants are able to promptly move in, then they might agree to a no fuss, no cost, break-lease. However, they are under no obligation to do this.

    The Residential Tenancy Agreement is a legal contract and the owner is entitled to ensure their financial position is no worse off as a result of a tenant breaking their tenancy agreement.

    If you are thinking of breaking a fixed-term lease it is best to only do so if you have compelling reasons and have factored-in the possible cost of that decision.

    While it is possible to find accommodation while you are outside of Australia, it would be easier to apply for properties when you are in Australia.

    When you first arrive consider taking on some short term accommodation so that you can determine which areas are best suited to your lifestyle and budget.

    Other useful documentation would be a rental reference from your current agent/owner and evidence of your recent past income, i.e. wages and salaries. If you have been paying a mortgage, then a record of those mortgage payments would assist in satisfying the agent of your payment history.

    Character references are not essential but can be helpful where appropriate, such as from a parent, tutor, guardian, employer, Justice of the Peace (Notary Public), GP, local police officer, Member of Parliament or church elder.

    If your application is successful and you progress to signing a lease agreement, you will need to prove your identity with a classic Proof of Identity 100 point check.

    Usually this means providing evidence such as a current passport, drivers licence, bank statements, utility bills in your name, citizenship certificate or a combination of these or other documents to establish your bona fides. Take a moment to familiarise yourself with the Proof of Identity 100 point check official requirements.

    Ingoing costs to rent a property in Western Australia would generally be two weeks rent in advance, a security bond equivalent to four weeks rent and sometimes the option fee.

    This is a standard agreement whereby the owner agrees to allow the tenant to occupy the owner’s property under specified terms and conditions.

    When a written agreement is used after 1 July 2013 it is mandatory that the lease as prescribed in the Residential Tenancies Regulations is used.

    This form can be identified by “Form 1AA”. The Lease has three parts - Part A, Part B and Part C.

    The wording of Parts A and B cannot be altered or deleted. Further agreement cannot be reached that certain sections will not apply.

    Part A specifies the variables:
    • The identity of the tenant, owner and the property.
    • The type of tenancy (fixed or periodic).
    • The amount of the rent, when and how it will be paid.
    • How many people are permitted to occupy the premises.
    • If pets are permitted.
    • Who is to pay for water consumption.
    • The amount of the security bond.

    Part B addresses the general rights and obligations under the lease.

    Part C is where the owner and the tenant come to an agreement on other conditions that may apply to the lease that have not been addressed in Parts A and B.

    The additional conditions in Part C cannot go against the conditions in Parts A and B, must not be illegal, cannot go against the Residential Tenancies Act nor the Regulations and must not breach the Fair Trading Act.

    The Residential Tenancies Act (RTA) is legislation by the Western Australian Parliament to regulate the relationship between owners and tenants.

    It was first established in 1987, but was modernised, updated and amended in 2013.

    It establishes the rule of law to ensure the business relationship between the property owner and the tenants is fair and reasonable to both parties. It applies rights and responsibilities on both parties that must be adhered to.

    The most recent amendments to the RTA came into effect on 1 July 2013.

    Property managers have the right to request an Option Fee with a tenants application to rent a property.

    Some owners require this fee, whilst others don’t. Essentially an option agreement grants a right but not an obligation.

    It works like this;
    • If the rent is under $500 per week, the Option Fee is $50.
    • If the rent is between $500 and $1,200 per week, the Option Fee is $100.
    • If the rent is $1,200 per week or more, then the Option Fee is capped at $1,200.

    The only exception to the above schedule is that if the property is above the 26th parallel (basically from Carnarvon and north, including the Pilbara and Kimberley), then the Option Fee cannot be more than $50 or $100 per week.

    For all homes from Carnarvon south, including metropolitan Perth, the Option Fee of $1,200 applies to rentals of $1,200 per week or more.

    If an application is successful, the owner grants the applicant the right but not the obligation to enter into a Lease Agreement. The Option Fee is for that right.

    The applicant then has an agreed period of time to decide whether they want to sign the lease. A person may wish for an Option Fee because a suitable property has been found but the person is waiting upon their partner to also view the property.

    If the applicant enters into the lease then the Option Fee goes towards the rent. If the successful applicant decides not to enter into the lease then the option fee is retained by the owner.

    If an application is unsuccessful, then the money paid for an Option Fee will be fully refunded.

    Where should I look for properties?

    These days most people use reiwa.com to find properties available to rent, however rentals can also be found in local newspapers.

    If you find a property that attracts your interest contact the real estate agency to learn about opportunities to view the property in person.

    What do I do once I find a property I'm interest in?

    After viewing the property you can then make an application for it using standardised forms. These will be provided by the property manager.

    The application form for a Lease Agreement will require you to confirm your identity, provide references and referees where applicable, provide evidence of your financial status and to commit to the terms of the agreement as explained to you by the owner or property manager.

    The application also provides you with the opportunity to put forward any special conditions you want included in the lease agreement as well as consider any special conditions the owner may want to include in the lease agreement.

    You may be asked to pay an Option Fee during the application process.

    What happens after I have sent through the application?

    Once the owner or property manager has considered your application, usually within one or two days, you will be contacted and advised of the outcome.

    If successful, you can then make arrangements to meet with the property manager to sign a Lease Agreement.

    You will also be required to pay two week’s rent in advance, plus a security bond. If you are permitted to keep a pet then your security bond can be increased by an extra $260.

    The tenant’s security bond is lodged with the Bond Administrator which is a section of the State Government’s Department of Commerce.

    Your rights and responsibilities are covered by the Residential Tenancies Act.
    Owners who manage their properties privately often underestimate the time and expertise this takes, especially if they fall foul of the Residential Tenancies Act (RTA) and end up in legal difficulties.

    A property manager is usually local to an area or has a long working relationship and familiarity with it. This is a huge advantage when it comes to appraising the rent.

    It also means that the property manager can review the rent from time to time in the context of what’s happening in the market and by using specialised data from REIWA that is not always available directly to the public.

    Other benefits to hiring a property manager are:
    • Property managers are trained in the application of the RTA and therefore can advise owners and tenants of their rights and obligations.
    • Property managers have a ready supply of tenants and the means to check references, credit ratings and tenant databases.
    • Property managers are trained to report in detail on the condition of a home and have the expertise and experience to maintain the home at a satisfactory and safe standard.
    • Property managers fulfil the duty of care for your asset.
    • Professional managers are skilled at supplying accounts and details of income and expenditure so that your taxation return can be completed.
    • A property manager is a skilled negotiator, communicator and go-between for you and the tenant. This professional distance can be a relief and advantage if things get tricky.
    • Most property managers charge a percentage of the weekly rent as their fee, which is fully tax deductible at the end of the financial year.

    When hiring a property manager approach those who attract your interest and talk to them about their fees and services.

    It is a deregulated market so take the time to shop around for the right agency and business model that meet your requirements.

    What security standards can I expect with my rental?

    Property owners must provide you with a minimum level of security in relation to doors and windows.

    The standards began on 1 July 2013, however, owners have until 1 July 2015 to make sure that their properties comply. It is a two year phase-in period.

    The standards ensure all external ground level doors have deadlocks.

    Deadlocks are not required if the doors are matched with lockable security screen doors of Australian Standards. In this situation, regular locks are sufficient on the inner door.

    Windows must have reasonable locks or latches to ensure they cannot be opened from the outside.

    A porch light must be present near the main entry door and operational from inside the dwelling.

    The property I am renting does not have window locks and I am concerned I cannot obtain contents insurance. Does the owner have to provide window locks?

    Many insurance companies will provide contents policies for tenants in homes that do not have window locks. Make sure you read the fine print in these policies to be certain they meet your needs.

    Prior to entering into a tenancy agreement it is important to look at the security features and determine if they are suitable.

    We recommend you shop around to find an insurance company that suits your circumstances and satisfies your requirements.

    I believe I have been unfairly discriminated against. Where can I complain?

    If you believe that you have been denied a lease or had a lease terminated on unreasonable grounds, including but not limited to your gender, race, age, disability, sexuality, political or religious beliefs, ethnicity or marital status, then you can lodge a complaint with the Equal Opportunity Commission.

    I don't agree with the final inspection and the proposed deductions to be made from my bond. What can I do?

    It is mandatory that at the start of the lease for the property manager to prepare a property condition report. The property is checked to determine if everything is working and clean and to note any existing damage or wear and tear, such as scuffed walls or a chipped bench top.

    At the final inspection when vacating a property the inspection happens one last time and a final property condition report is prepared and given to you within 14 days of the termination of the tenancy.

    The property should be in the same condition as shown on the original property condition report (with the exception of fair wear and tear).

    If the owner has any concerns then you would be approached in order to reach a resolution. If you don’t agree with the deductions to be made from your bond and you cannot resolve the issue with the owner through the managing agent, then the dispute would have to be resolved in the Magistrates Court.

    The magistrate would listen to both sides, examine any documents (property condition reports) and hand down a decision.

    To learn more about this process visit the Department of Commerce’s website.

    My landlord has defaulted on the mortgage and the banks have taken the property back. What do I do?

    Under the Residential Tenancies Act tenants must be given a 30 day notice if the bank has taken possession of the property because the owner has defaulted on mortgage payments.

    In this instance, you will have 30 days to find another rental or make other arrangements.

    During this 30 day period the tenant will not be required to pay rent.

    I think I'm 'blacklisted' on a tenancy database. How can I check this and change it if it's wrong?

    There are several tenancy databases that property managers can use around Australia.

    Mostly they make a note of those tenants who might have a really poor history in the rental housing system, e.g. if people have left a property owing the owner more money than is available in the Bond or if a court order terminated any previous residential lease agreements, this can be noted against their name.

    When property managers are considering applications from prospective tenants they will check names against these nation-wide databases to protect the interests of the owner.

    If you are found to be listed on a database you will be advised through a formal notice.

    If you believe the information is wrong, outdated or misleading you can raise this directly with the particular company that owns and maintains the database.

    A legitimate 'black mark' will remain on the database for a three year period before being removed - similar to demerit points if you are a licensed driver.

    How frequently can the rent be increased?

    Rents cannot be raised more than six monthly.

    With a fixed-term lease, if the owner is going to increase the rent during the term of the lease it must be in the contract as a condition of the lease.

    It can either refer to an increase of a dollar amount, such as $10, or alternatively it can stipulate a method of increase, such as the Consumer Price Index. Only one method per rent review is permitted.

    If a tenant is on a periodic lease, the owner must give a 60 day notice period of the new rental price provided that the rent had not been increased in the previous six months.

    It is advisable for owners to add two or three days on top of the mandated 60 day notice period to allow for postage delivery when using ‘snail’ mail.

    Can a tenant withhold rent?

    No. If the owner does not honour his or her obligations under the lease agreement the tenant is not legally able to withhold rent.

    If a tenant withholds rent, they may be issued with a Notice of Breach of Agreement.

    What happens if the tenant does not pay the agreed rent?

    A basic obligation of a tenant is to pay the rent. If rent is not paid by an agreed date, the tenant is in breach of the lease and the owner or property manager can seek to end the tenancy.

    The tenancy may be ended through two alternatives.

    Firstly, not less than one day after the rent should have been paid, the owner may issue a Breach Notice or Non Payment of Rent Form. This notice requires the tenant to pay all outstanding rent within 14 days.

    If after 14 days the rent remains unpaid, the owner may issue a Notice of Termination for Non Payment of Rent. This notice seeks to terminate the tenancy agreement and requires the tenant to leave the property within seven days.

    Secondly, not less than one day after the rent should have been paid, the owner may issue a Notice of Termination for Non-Payment of Rent. The notice warns the tenant that unless the outstanding rent is paid within the next seven days, the owner or property manager may apply to the court for an order to terminate the tenancy agreement.

    It is advisable for owners to add two or three days on top of the mandated 14 and seven day periods to allow for postage delivery when using ‘snail’ mail. Tenants can reasonably expect this courtesy also.

    How often can a real estate agent carry out routine inspections?

    Not more than four times each year. Inspections must be held between 8am and 6pm. Tenants must be advised if the inspection is before midday or after midday.

    How much notice must a real estate agent/owner give for inspecting the property?

    Not less than seven days or more than 14 days.

    The property I am renting is for sale. How much notice should the owner/agent give to me for prospective buyers to inspect the property?

    The Residential Tenancies Act states that the owner or agent may enter the property for the purpose of showing the premises to prospective purchasers, at any reasonable hour and on a reasonable number of occasions, after giving the tenant reasonable notice.

    This can be in writing or by mutual agreement, such as a phone conversation or a person to person chat.

    In other words, this is not expressly defined but common sense and courtesy must prevail.

    What is the Bond and how does it work?

    Tenants are required to pay a Tenants Security Bond in order to protect the owner in the event of damage or unpaid rent.

    If, at the end of your lease, there is damage to the property or you are behind in some rent payments then the owner will claim that money from the Bond.

    The Bond is paid at a rate of four times the weekly rent e.g. a home renting for $450 per week will require a bond of $1,800.

    The Bond is not kept by the owner or the agency, but deposited with a central Bond Administrator through the State Government Department of Commerce. There it is protected until the end of your lease.

    Once tenant and owner have agreed to the lease ending and the property is returned to the owner in the same state and condition (with the exception of fair wear and tear) outlined in the initial Property Condition Report, a Bond Statement will be drafted.

    A Joint Application for Disposal of Security Bond form is then signed to allow the Bond to be released from the Bond Administrator.

    Where there might be an unresolved dispute between tenant and owner over unpaid rent or damage, the Bond is held by the Bond Administrator until the matter is settled in the Magistrates Court.

    How long should it take to have the Bond returned?

    Once the Form 4 Application for Disposal of Security Bond has been signed, no further deductions may be made from the Bond.

    The document is then lodged with the Bond Administrator who would then be able to refund the security bond to the tenant within seven to 10 days. The Application Form permits bank details to be entered so that an electronic transfer can be made.

    It should be noted, however, that it can often take more than 10 days for the Bond Administrator to refund the money. If the Bond refund is being unreasonably delayed, tenants should contact the Department of Commerce directly to raise concerns.

    How much pet bond can be charged?

    The Residential Tenancies Act allows a further $260 to be collected in Bond if the tenant is permitted to keep a pet or pets on the premises that are capable of carrying parasites that can affect humans.

    The Pet Bond can only be applied to the cost of any fumigation of the premises that may be required at the termination of the tenancy.

    Most often this would apply to cats and dogs but is not confined to these animals alone.

    If the fumigation cost exceeds $260 then the tenant would be responsible for any excess. Pet Bond can only be charged once, irrespective of the number pets being allowed.

    What is the Lease Agreement?

    The written lease agreement sets out the terms and conditions of the lease.

    The owner and the tenants agree on matters such as the amount of rent per week, when the rent will be paid, the method of paying the rent, the number of people who can live in the premises, whether pets can live at the premises, the length of the lease and payment of electricity and water consumption.

    View a sample copy of REIWA's Residential Tenancy Agreement.

    What are the periodic and fixed term leases?

    The length of the tenancy is considered during the negotiation of the lease agreement. 

    A fixed term lease guarantees a specific period of time for the tenant to reside in the premises. During this period the owner does not have any right to terminate the tenancy unless a breach of the terms and conditions of the lease occurs. 

    The other type of lease is a periodic tenancy. This tenancy has no defined end date. The tenancy can come to an end through either the tenant providing 21 days written notice or through the owner providing 60 days written notice.

    What happens to a fixed 12 month lease if the property is sold before the lease is up? 

    A fixed term lease stays in place when a property is sold. Tenants have the right to remain in the property until the end of the lease. The new owner takes on the same lease rights and obligations of the previous owner.

    If a property has sold, how much notice does the owner/agent have to provide the tenant with on a periodic lease? 

    The Residential Tenancies Act requires a period of written notice to be given of no less than 30 days.
    Statistical Concepts

    What is vendors discounting?

    Vendors discounting is a measure of the percentage of overall vendors (sellers) who drop their original listing price to secure a sale e.g. “around 61 per cent of vendors dropped their price in the March quarter”.

    What is an average discount?

    An average discount is a percentage measure of the average discount agreed to by vendors in a period e.g. “in the March quarter the average discount experienced by vendors who dropped their price was 6.3 per cent”.

    What is an overall market discount?

    In any period, such as a quarter, some vendors will discount for a sale, some will achieve the list price and some will exceed it.

    When you add all three together you will find a different figure to the average discount because it includes met prices and exceeded prices.

    An overall market discount is usually a more modest figure than the average discount e.g. “the average discount in the March Quarter was 6.3 per cent, however the overall market discount was just three per cent”.
    Detailed sales record data is available to the public on reiwa.com on our Products page.

    Whilst this is not a free service, purchasing data represents a small investment in research for what is often your biggest investment in life.
    REIWA includes the following property types within its definition of houses and units with the accuracy of sales volumes and medians dependant on the property classification designated by Landgate data:

    • Houses – house, group dwelling (a detached dwelling on a strata lot) and duplex (irrespective of title arrangements due to land component more akin to houses)
    • Multi-residential dwellings – all other attached dwellings including triplex, quadruplex, townhouse, villa, unit, apartment and flat.

    Other than the inclusion of duplex in the house category (which are semi-detached to the adjourning property), REIWA endeavours to align with the Australian Bureau of Statistics (ABS) definition of a house.

    This definition states a house is a detached dwelling irrespective of land title arrangements and units capturing attached dwellings that are classified as ‘Other’ by the ABS.

    All land sales analysis include both green and strata titled lots.

    Can REIWA provide information on the projected growth rates for various suburbs?

    REIWA is not an investment advisor and is therefore unable to provide specific investment advice on the future performance of any areas in terms of property values.

    Where can I find suburb statistics?

    View relevant statistics, information and market data on the suburb you're interested in by searching our Suburb Profiles.

    What data does REIWA use to calculate its median prices?

    REIWA uses transfer of title data from Landgate as the basis for calculating various statistical parameters.

    It is important to appreciate that medians are calculated using price data based on the sales contract date rather than the settlement date.

    However the sales data is not available from Landgate until after settlement has occurred which delays the timing of REIWA releasing its analysis.

    What is a median price and why do we use it?

    The median price is the middle price in a series of sales.

    If there are 15 sales recorded in a suburb and these are arranged in order from lowest to highest value, then the eighth sale is the median price. In the case where there is an even number of sales in a series, the median is the average of the middle two prices.

    Whilst the median provides a general indicator of the trend in property prices for the majority of the market in a suburb, care should be taken when applying the results to an individual property as prices may be influenced by a range of unique factors including age, house and lot size and condition.

    What is the difference between a median and average price?

    An average price is different to a median as it is calculated by adding up the value of all the sales and dividing it by the number of sales.

    Median prices are generally used in property analysis rather than average prices because median prices are unaffected by a few unusually high or low prices that may skew averages.

    Whilst the median is regarded as presenting a more accurate measure of true market activity, sample size is also important with 30 sales considered a reliable sample.

    Below this, the sample may be subject to bias and present undue volatility.

    What is a preliminary median and why is the final median different?

    When REIWA publishes its initial figures on reiwa.com and in the Property Report, it is important to understand these are preliminary medians as they are based only on a proportion of the data available, generally around 65 per cent for the most recent quarter.

    As the balance of the data is received from the Landgate Information over the subsequent months after the initial release, in many case the median whether it be for the quarter or for the year will invariably change, hence the subsequent publication of final medians when the next quarter is released.

    For example, in the March Quarter 2006, Perth's preliminary median for the quarter was $353,000 but as the balance of the records are added from the latter part of the quarter, the final median for the March Quarter increased to $365,000.

    Factors influencing an increase between preliminary and final medians include:

    • more affordable properties often have shorter settlement periods, hence the data is received earlier, and
    • in a rapidly rising market as experienced during 2005-06, prices increase monthly and therefore later records are generally of a higher value.

    What is the different between 'quarterly' medians and 'year to' medians?

    Various media present a variety of median prices. REIWA publications present both:

    • Quarterly medians which represent the median sales value for a particular quarter. Publication of this figure is generally restricted to overall markets such as Perth, Mandurah, Greater Bunbury and other regional centres, local government areas or sub-regional areas within the Perth market such as the Western Suburbs or Rockingham-Kwinana.
    • Year to or annual medians represent the median of all sales transactions that occurred over a 12 month period. Suburb data is often presented at this level, particularly in the Property Report as there are often insufficient sales or compositional variations of the property traded within each quarter that make quarterly reporting and the associated percentage changes potentially volatile.

    Why are there different ways that percentage changes are quoted?

    Percentage changes are presented in various ways in the media. REIWA presents percentage changes in the following ways:
    Quarterly change is the comparison of the median of one quarter with the previous quarter.

    Generally this is restricted to larger overall markets such as Perth and regional centres.

    This is not to say it cannot be applied to suburbs assuming there are adequate sales volumes to provide a representative sample. Industry practice usually restricts reporting of median sales price to volumes of 30 or more sales.

    Annual or Year on Year change can be expressed either as:

    • the annual change between the medians in the same quarter for two subsequent years or;
    • the annual change between medians for the year to date data compared with the previous year to date data. This is what is typically presented in the Property Report for suburbs.

    Average Annual Growth Rates for five and 10 years are only calculated using annual medians and represent the average compound growth over the respective period.

    It is therefore important to understand what data is being presented in the first instances, whether it is quarterly or annual and then the nature of the change being presented.

    Why does the annual percentage change presented in the Property Report differ if I compare this year?

    When REIWA releases suburb data in the Property Report, it is important to appreciate that this is preliminary data and the annual percentage change is therefore preliminary.

    The percentage change is calculated using final data from the previous year and therefore is not appropriate to calculate the change using the median published in the Property Report a year ago. This was also preliminary data and has invariably changed.

    The revised median for the previous year is available in our Suburb Profiles.

    What are the upper and lower quartiles?

    Other statistical parameters that may be reported in the media or in REIWA research from time to time include the upper and lower quartiles.

    These are derived in a similar way to calculating the median by placing all records for a period in value order and identifying the values that represent:

    • the top of the bottom 25 per cent of the market (the lower quartile), and
    • the bottom of the top 25 per cent of the market (the upper quartile).

    Use of quartiles and the relative movement in values of the quartiles between quarters or over the year help us to understand which part of the market is moving relative to the median.

    The lower quartile tells us that 25 per cent of the market was priced at or below the lower quartile value whilst the upper quartile indicates the top 25 per cent of the market was priced above the upper quartile.

    It follows then that the remaining part of the market between the two quartiles represents 50 per cent of the market and includes the median value.

    There are also a variety of measures used to express price movements. These include the quarterly change between quarterly medians and annual changes which may compare either one quarter with the same quarter in the previous year or a year-on-year change which compares annual medians.

    Annual medians are also used to calculate five and 10 year Average Annual Growth Rates which represent the compound growth rate over the respective period.
    Strata Title

    On the few occasions an unanimous resolution is required, all proprietors are required to vote and must vote in the affirmative.

    Like a resolution without dissent, those proprietors not attending the meeting or who did not provide a proxy for the meeting shall have 28 days to make up their minds.

    Mortgagees must also be given the opportunity to vote in which case they would replace the proprietor in the voting process.

    Source: Understanding Strata Titles by John Angus

    As the term implies, the resolution cannot be achieved at a general meeting even if only one proprietor objects, either at the meeting or if not in attendance personally or by proxy, in writing within 28 days after the meeting.

    This resolution is most frequently used when amendments are required to the Schedule 1 by-laws of the strata company.

    For example, if an exclusive use by-law or a lease of common property is required, a resolution without dissent is necessary.

    Proprietors do not have to be financial to vote.

    Source: Understanding Strata Titles by John Angus

    By definition, this form of resolution means a simple majority of proprietors who have paid all due levies at the time of the meeting, when voting on the issues being considered.

    This form of resolution is all that is required to conduct the normal business of general meetings and council meetings.

    For example, when accepting the previous year's income and expenditure reports and minutes or approving income and expenditure budgets for the future year, an ordinary resolution is all that is required.

    That is, if there are 10 proprietors represented at the meeting who collectively constitute the quorum, only six are required to vote in favour of the motion to achieve the simple majority.

    Source: Understanding Strata Titles by John Angus

    A special resolution means that when passing the resolution at a general meeting there must be at least 50 per cent of lot proprietors who hold a minimum of 50 per cent of unit entitlement voting for the motion.

    It cannot be 25 per cent or more lot proprietors, or proprietors of a lot with 25 per cent or more of their respective unit entitlement, voting against the motion, either at the meeting or, if not either in attendance personally or by proxy, in writing within 28 days after the meeting.

    This form of resolution is required in certain circumstances, for example if amendments are to be made to the Schedule 2 by-laws of the strata company.

    The Act will nominate if a special resolution is required.

    Proprietors must be financial in order to vote.

    Source: Understanding Strata Titles by John Angus

    Common property means all the land and buildings outside the boundaries of the lot but contained within the external boundaries of the original parcel as depicted on the strata plan.

    In larger complexes common property is likely to include the building structures and land surrounding.

    Contrary to the understanding of many, common property is not owned by the strata company as such, but by all the proprietors together, as tenants-in-common in proportion to their respective unit entitlement.

    Source: Understanding Strata Titles by John Angus

    A management statement is a document which contains by-laws.

    These by-laws are prepared by the original proprietor so that the document can be lodged at the Department of Land Administration with the strata plan or survey-strata plan and are then registered together.

    The type of by-laws which can be included within a management statement are referred to in Schedule 2A of the Act.

    A management statement cannot be registered after the strata plan has been registered.

    The by-laws as contained within the management statement do not have to be approved at a general meeting. They exist as soon as the document is registered.

    Source: Understanding Strata Titles by John Angus

    The rules, ordinances, regulations or codes are referred to as 'by-laws' and are set out in schedules, referred to as 'Schedule 1' and 'Schedule 2' within the Strata Titles Act.

    They are the rules of the strata company designed for the well-being of those who live within the complex and the operation and function of the strata company.

    By-laws automatically come into force upon registration of the strata company and are referred to as standard or statutory by-laws.

    By-laws can be amended, added to or repealed.

    Source: Understanding Strata Titles by John Angus

    Purple Title refers to land held as Tenants in Common, the shares being in the same number as the units.

    Separate title may be issued for each unit. The land cannot be divided or partitioned though because of the “unity of possession".

    The sketch and lot number is for the whole of the land in the plan or diagram.

    The Certificate of Title states the number of undivided shares contained and the sketch of the land used to be shaded purple - thus "purple title".

    Strata Title originated in Australia and is a means whereby ownership in part of a building is held or transferred.

    A Strata Title is most often used in the case of home units or a block of flats, although this is increasing in the case of commercial office property.

    The land in a Strata Title comprises the strata below and above the surface of the land as well as fixtures. The fact that land includes airspace above the surface is the concept which underlies the modern Strata Title.

    A strata plan of subdivision also divides the airspace above the surface, i.e. it divides vertically as well as horizontally.

    The strata plan of subdivision is a plan of the home unit building.

    Common property is owned by a body corporate created by the legislation and comprising all of the lot owners.

    Wastewater and effluent disposal

    What is greywater?

    Greywater is wastewater which comes from the bath, shower, bathroom wash basins, clothes washing machine, laundry trough and kitchen sink.

    Western Australia is experiencing water restrictions due to low rainfall and the critically low levels of surface water storage. Many people are interested in conserving water by reusing their greywater.

    Greywater may be used via manual bucketing or an approved greywater system.

    Greywater characteristics will vary according to the number of household occupants, their age, health, water use patterns and the household fixtures from which the greywater is drawn.

    What are the requirements for greywater use?

    The Code of Practice for the Reuse of Greywater in WA further explains the requirements for greywater use, and provides information on required design and performance requirements for people seeking to have new products approved.

    If you are applying greywater manually, the following guidelines should be adhered to:
    • Apply greywater in several locations to prevent pooling
    • Only bucket greywater to areas that are inaccessible to children and pets.
    • Don’t use greywater from the washing of nappies or soiled clothing.
    • Don’t use greywater if a member of the household has an infectious disease.
    • Don’t put greywater on edible plants or fruit.
    • Don’t store greywater.
    • Don’t over water. Too much greywater can clog the soil, causing pooling and the development of grey/green slime areas.
    • If you are installing a greywater reuse system, it needs to be of a design approved by the Department of Health and properly installed.

    What is the installation process?

    If you wish to install a system you must lodge an Application to Construct or Install an Apparatus for the Treatment of Sewage with the Shire. This is to ensure that the system is of an approved design, manufacture, and is properly sized and located.

    It is an offence to install a wastewater system without an approval and it is also an offence to commission the system prior to final inspection and approval to use from the local government.

    The Western Australian Government provides a rebate to help people to be more water wise by offering rebates on a variety of products, including greywater systems.

    Information on this can be obtained from the Department of Water website.

    What are composting toilets?

    Composting toilets receive and treat human waste using natural decomposition processes, usually without the use of a water flush system.

    Some composting toilets have electric or wind driven heating/drying units to assist with the process

    A well maintained composting toilet should not smell or create a nuisance.

    Wastes are retained for a sufficient period of time so that they are broken down to a safer, more stable and less offensive product.

    This material is not sterile and should be handled with care.

    Material from composting toilets must be buried and is not permitted to be used for the growing of fruit or vegetable plants

    What are the conditions of approval?

    Each composting toilet has a set of conditions of approval available from the Department of Health, and the manufacturer will also be able to provide information on the operation and use of their systems.

    Systems vary in their size and whether they are approved for permanent or intermittent use.

    Some composting toilets can accept food scraps in addition to human waste, as this may assist in the composting process, but not all systems can do so.

    Familiarise yourself with the list of approved products.

    What are the system arrangements?

    There are two basic system arrangements. Some composting toilets are batch systems while others are of a continuous composting design.

    The continuous system generally has a large single chamber which waste moves through as it decomposes. They are designed to allow for a minimum detention time to allow wastes to break down before the compost is removed. They should not be overloaded.

    The batch systems have more than one receiving receptacle, and more can usually be obtained if required. When the receptacles are full, they can be removed for the composting period or rotated.

    What is the process for installing composting toilets?

    System installations are only permitted with local government or Department of Health approval. The Department of Health assesses larger development proposals.

    If you wish to install composting toilets and associated greywater systems you need to lodge an Application to Construct or Install an Apparatus for the Treatment of Sewage with the Shire. This is to ensure that the systems are of an approved design and manufacture, are properly sized and suitably located.

    For more information, please read the Guidance on Applying for Department of Health Approval of an Onsite Wastewater System.

    It is an offence to install a wastewater system without an approval and it is also an offence to commission a system prior to a final inspection and approval to use from the local government.

    What are Aerobic Treatment Units?

    Aerobic Treatment Units (ATUs) are a multi stage alternative to conventional septic tanks and provide an improved quality of effluent treatment.

    The chlorinated effluent from ATUs may be used to surface irrigate garden areas but can only be used below grassed areas. It is not approved for any use in vegetable gardens.

    Due to environmental concerns, usually associated with the potential degradation of environmental water bodies, some developments are required to use a wastewater system which is capable of removing phosphates.

    Some ATUs are approved as Phosphate removing. These ATUs may use an in-system phosphate removing process or an approved phosphate binding amended soil in the irrigation area.

    The type of phosphate removing system can affect the choice of effluent irrigation methods available e.g. amended soil systems cannot be used with drippers

    ATUs must be serviced regularly to ensure that they are operating effectively and that the quality of the final effluent is maintained.

    What is the process for installing Aerobic Treatment Units?

    System installations are only permitted with Shire of Augusta Margaret River or Department of Health approval. The Department of Health will assess larger development proposals.

    Persons wishing to install Aerobic Treatment Units or septic tank systems need to lodge an Application to Construct or Install an Apparatus for the Treatment of Sewage with the Environmental Health unit.

    It is an offence to commence construction of a wastewater system without an approval and it is also an offence to commission an illegally installed system or to commission a system prior to a final inspection and approval to use from the local government.

    For more information please read the Code of Practice for the Design, Manufacture, Installation and Operation of Aerobic Treatment Units.

    What are septic tank systems and how do they work?

    Most unsewered developments in Western Australia use septic tank systems to treat and dispose of sewage. These generally consist of two water tight tanks (or one large unit) and two sets of drainage receptacle e.g. leach drains or soak wells.

    When wastewater passes through the septic tanks, heavier solids sink to the bottom and undergo bacterial digestion. This reduces the quantity of solids and also changes its composition to sludge, which builds up in the bottom of the tank.

    Materials such as grease and oil float to the surface in the tanks to form a crust over the liquid. The remaining liquid, called effluent, flows from the tanks into the drainage receptacles to soak into the surrounding soil where it may undergo further natural treatment processes.

    What is the process for installing a septic tank system?

    System installations are only permitted with local government or Department of Health approval. The Department of Health assesses larger development proposals.

    If you wish to install septic tank systems with leach drains/soakwells or an Aerobic Treatment Unit you will need to lodge an Application to Construct or Install an Apparatus for the Treatment of Sewage with the relevant Local Government Authority.

    This is to ensure that the system is of an approved design and manufacture, is properly sized and is suitably located.

    It is an offence to install a wastewater system without an approval and it is also an offence to commission a system prior to a final inspection and approval to use from the local government.

    Onsite treatment and disposal of effluent systems will not normally be approved if a property can be reasonably connected to sewer. As they are designed to retain the solids in household wastewater, septic tank systems require routine maintenance.

    For more information about septic tank systems please read the Department of Health's information about Understanding Septic Tank Systems.

    What is the process for decommissioning septic tank?

    When a developed property is connected to sewer, usually under the infill sewerage program, any onsite effluent disposal systems such as septic tank and leach drain/soakwell systems will eventually require decommissioning.

    This means that the contents of the tank are pumped out (by an approved contractor) and the system is either removed or backfilled.

    If the system can’t be removed, the tanks should still be pumped out and the bottom of the tanks can be broken up and the system backfilled with sand.

    As there are costs involved in both decommissioning a septic tank and connecting to sewer, householders are not automatically required to decommission tanks when they connect to the sewer.

    Under the Health (Treatment of Sewage and Disposal of Effluent and Liquid Waste) Regulations 1974 , decommissioning is required when:
    • The property is sold
    • The use of the development changes e.g. from a residence to a child care centre
    • Building extensions may encroach on minimums setback requirements from the system.

    Septic tanks which have not been decommissioned should not be paved or built over without approval from the relevant local government.

    Under the Code of Practice for the Reuse of Greywater in Western Australia, disused septic tank systems can be converted into the primary treatment tank for a greywater system.

    The existing drainage receptacle (e.g. soakwells or leach drains) must be replaced with an approved greywater system.
    Foreign Investment

    If you are deemed to be a foreign person by the Australian Government, you will need prior approval from the Foreign Investment Review Board before you can purchase real estate in Australia.

    For the most up to date information about what type of property you are eligible to purchase as a foreign investor, and the process for seeking approval, visit www.firb.gov.au.

    More information

    REIWA has a free telephone service for members of the public if they have any questions about buying, selling or renting property. This number can also be called if you have a concern or wish to register a complaint about a REIWA agent. 

    The REIWA Public Information Line is open Monday to Friday each working week, between 9am and 12pm and then again between 2pm and 5pm. You can phone them on (08) 9380 8200. 

    You can also visit the Department of Commerce's website or phone them on 1300 30 40 54 for answers to your queries. 

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