On 15 August 2016 the NSW government implemented new real estate regulations. The Amendments to the Property, Stock and Business Agents Regulation 2002 require real estate agents to keep a written record of any inspections of the property, and to provide the written record to interested parties who request a sales contract.
There is a $4,400 penalty for not providing the written record to someone to requests a sales contract so we have put together the below guide on how to minimise your work and maximise consumer savings.
The requirements can be complex, but following the below steps makes avoiding the penalty easy!
1. Prepare the PDF
Prepare a template on your office letterhead of a letter to an inspector. It should request the details shown below. Hold this template as a PDF to have ready to send to any building or strata inspector.
In the case of a strata property, you should also provide the PDF to the vendor`s solicitor in case the report is arranged through them.
Ensure that the inspector returns the completed template before they complete the inspection.
Template for letter to inspector:
We require to following information for our records:
1. Your contact details;
2. The date on which the inspection is due to occur;
3. Whether the inspection was commissioned by the vendor, a prospective purchaser or a selling agent;
4. Whether the report is available for repurchase by other prospective purchasers; and
5. Whether you are insured to carry out the inspection under a policy of professional indemnity insurance
We believe this should be provided on the inspector’s letterhead for two reasons:
1. To reduce your administration – the last thing we would want to be doing as an agent is chasing inspectors for these details; and
2. There appears to be a slight risk in point 5 regarding insurance. Unless you are an expert in reviewing insurances we would leave it with the inspector to advise their insurance status.
2. Attach to Sales Contract
Merge the returned PDF to the front of the sales contract and provide this merged document to anyone who requests a sales contract. These emails will constitute the written record required to ensure your compliance.
One frequently asked question we get from agents is “what about parties who already have the contract before the inspection took place?”. The wording is not clear on this but we have spoken to the relevant Department and they have advised that if they are still interested you should send them the written record. If we were agents we would send it to all contract holders to be sure!
If you have any questions or would like any more information about our vendor models (which ensure low cost due diligence for interested parties and an easier sale for you), please get in touch on on 1300 253 761 or email us at email@example.com.
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