Real estate: 5 Minute Fix 12

By the Real Estate Team
10 Dec 2020
Get your 5 Minute Fix of real estate news. This issue: Project Remediate: NSW cladding remedy; NSW to phase out stamp duty; ACT body corporate changes; QLD POA update; QLD COVID-19 Retail Lease Legislation; WA off-the-plan transfer duty rebate extended; QLD: Amendments to the Queensland Community Titles Scheme legislation and a recent case in WA involving COVID-19 disputes and the treatment of an expired lease.

Project Remediate – a landmark regime to remedy the cladding crisis in NSW

As part of the NSW Government's 2020-21 Budget, it established a three-year "Project Remediate" program aimed at fast-tracking the removal of combustible cladding on hundreds of at-risk buildings across the State.

The Government has committed to providing interest-free loans to building owners as an incentive to remove unsafe cladding in apartment buildings. Currently, an estimated 225 buildings are known to the Cladding Taskforce to contain unsafe cladding.

Building owners will be contacted and invited to participate in the program and applications are expected to open in March. In order to be eligible, a building must be a residential apartment building (class 2) in NSW, multi-use buildings included. A successful applicant must have been confirmed by the Cladding Taskforce as having a high-risk combustible cladding façade that requires remediation.

Project Remediate is designed to provide financial and technical support to owners to manage their building's rectification process. Under the plan, building owners can access a project assurance service to support the owners through the remediation process and oversee construction to ensure that rectification work is done to a high standard. Minister for Better Regulation and Innovation, Kevin Anderson, suggests that the project will generate "thousands" of jobs in the construction sector. This would provide needed economic relief in light of the effects of the COVID-19 pandemic.

NSW to phase out stamp duty

Information on the proposed stamp duty changes for New South Wales were published by the Sydney Morning Herald online on 17 November 2020

"Mr Perrottet said the state’s stamp duty system was centuries old and needed to be overhauled to give residents a modern tax system.

The government will seek community consultation on its proposed model to replace the transfer tax until March, which would give people buying a property the choice between paying stamp duty upfront or opting for the smaller annual property tax.

The present stamp duty concessions for first home buyers would also be replaced with a $25,000 grant, with the option of using the money on refurbishing the property.

Mr Perrottet said he wanted stamp duty overhauled "as soon as possible"."

WA: Off-the-plan transfer duty rebate extended

The Western Australian Government has temporarily expanded the Off-the-Plan Duty Rebate to apply to contracts entered into between 4 June 2020 and up to 31 December 2020 where construction has already commenced. To be eligible the contracts must be for the purchase of a new unit / apartment that:

  • is within a multi-tiered strata development; and
  • is currently under construction.

The rebate is for 75% of the transfer duty paid on the acquisition, capped at $25,000.

The existing 75% off-the-plan transfer duty rebate (capped at $50,000) for pre-construction contracts remains in effect. This rebate applies to contracts to purchase a new residential unit / apartment entered into between 23 October 2019 to 23 October 2021 where construction has not yet commenced.

These rebates are separate to the building bonus grant scheme (capped at $20,000) which is available for persons entering into a pre-construction contract for:

  • a new home on vacant land; or
  • an off-the-plan apartment/unit as part of a single tier development.

VIC: Victorian Budget 2020/2021 – Land tax and stamp duty changes

The Treasurer delivered the 2020/2021 budget on 24 November 2020 and as part of the Victorian Government's "Big Housing Build" initiative, the Victorian Government announced:

  • a 50% land tax discount for eligible new build to rent developments; and
  • an exemption from the absentee owner surcharge for eligible new build to rent developments.

The discounts are to take effect from the 2022 land tax year and will be in place until 1 January 2040.

No guidance has been announced as to what will qualify as an "eligible" new build to rent development.

It was also announced that there would be a:

  • 50% waiver of stamp duty on new residential property; and
  • 25% waiver of stamp duty on existing residential property,

for contracts entered into from 25 November 2020 to 30 June 2021 (for properties with dutiable value of up to $1 million).

The previously announced 50% stamp duty concession for commercial and industrial properties in regional Victoria has been brought forward and will apply to contracts entered into on or after 1 January 2021.

For further information, please visit: Victorian State Budget Revenue Measures 2020.

VIC: Essential fire safety measure clarity and Retail Leases Act amendments

The Retail Leases Amendment Act 2020 is in full force and effect, and amends both the Retail Leases Act 2003 (Vic) and the Building Act 1993 (Vic).

Provisions relating to essential safety measures are now included in the Retail Leases Act 2003 so that, if agreed by the parties:

  • a retail lease can require a tenant to pay for costs associated with the repair and maintenance of essential safety measures, or essential safety measures costs associated with the installation of a fitout for which the tenant is paying; and
  • if the tenant will conduct the essential safety measure on behalf of the landlord, that work does not affect any obligation of the landlord as an owner of the building to comply with the Building Act 1993 and regulations.

A consequential amendment has also been made to the Building Act 1993 to prevent a tenant recovering such costs from a landlord if the tenant has agreed to pay those costs under its retail tenancy lease. 

Other changes made to the Retail Leases Act 2003 are:

  • the timeframe for a disclosure statement and a copy of the proposed lease to be provided to the tenant has been extended to 14 days (section 17(1));
  • landlords are required to return security deposits within 30 days after the end of the lease (section 24(1)(d));
  • a landlord must provide a tenant with at least 3 months' written notice before the last date for exercising the option to renew. The amendment also specifies the information that a landlord is required to provide (section 28(1A));
  • a right for a tenant to request an early assessment of the market rent review to assist the tenant in making an informed decision when exercising an option to renew (section 28A); and
  • a 14 day cooling off period for tenants exercising an option without requesting an early rent review (section 28B).

To consider further how your lease may be impacted by these changes (and, in particular, what administrative processes landlords may need to revise accordingly), please click here and here.

VIC: Court of Appeal confirms retail leases cannot fall out of the Retail Leases Act 2003

On 16 October 2020 in Verraty Pty Ltd v Richmond Football Club Ltd [2020] VSCA 267, the Court of Appeal of the Supreme Court of Victoria confirmed that if lease falls within the scope of the Retail Lease Act 2003 (Vic) at the time it is entered into, it cannot cease to be subject to the Act as a result of a change in circumstances eg. occupancy costs increasing above $1 million per annum.  

Further details of the decision and our consequential recommended actions can be found here: Once a retail lease, always a retail lease? Yes, Victorian Court of Appeal confirms.

ACT: Commencement of the Unit Titles Legislation Amendment Act 2020 (ACT)

The first stage of the ACT Government's amendments to the Unit Titles Legislation Amendment Act 2020 commenced on 1 November 2020.

The transitional period ends on 1 July 2021.

QLD: Amendments to the Queensland Community Titles Scheme legislation

The Queensland Government recently passed amendments to the Body Corporate and Community Management Regulation Modules. The amendments are to commence 1 March 2021 and a summary of the key changes can be found here

QLD: Update to POA forms effective 30 November 2020

On and from 30 November 2020, the new version of the Queensland enduring power of attorney form (Form 2 version 4 and Form 3 version 4) came into effect.

Any enduring power of attorney signed by a principal on or after 30 November 2020 must be in the new form.

Will this invalidate a current power of attorney?

The change only impacts the previous versions of the Queensland enduring powers of attorney that have not been signed by the principal prior to 30 November 2020. Previous versions of the enduring power of attorney forms which were signed prior to 30 November 2020 will continue to be effective.

Any Queensland enduring power of attorney forms signed on or after 30 November 2020 must be in the latest approved form.

Registration of powers of attorney

If a previous version of the Queensland enduring power of attorney forms is signed by the principal on or after 30 November 2020, the Queensland Land Titles Registry will not be satisfied that the enduring power of attorney is valid in accordance with the Powers of Attorney Act 1998 and it will be rejected unless a declaration of validity from a court of competent jurisdiction is deposited with the power of attorney.

QLD: Introduction of the COVID-19 Emergency Response and Other Legislation Amendment Bill 2020

The COVID-19 Emergency Response and Other Legislation Amendment Bill 2020 was passed by the Queensland Parliament on 2 December 2020.

The Bill proposes to amend the existing COVID-19 emergency response contained in the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 to:

  • replace the regulation expiry date from 31 December 2020 to the "COVID-19 legislation expiry day" (30 April 2021 or such other day as prescribed by a regulation) to allow further time for resolution of disputes;
  • clarifying that the restriction on the landlord taking a prescribed action against a tenant extends beyond the response period and the extension period, but only in relation to a failure by the tenant to:
    • pay rent;
    • pay outgoings; or
    • remain open during the hours required under the lease,

      during the response period or extension period (section 12).

  • clarifying that a right for party to negotiate rent under an affected lease is limited to rent payable during the response period and the extension period.

The definition of response period and the extension period remain unchanged and consequently, the current rent relief provisions will not be extended past 31 December 2020.

WA: COVID-19 disputes and expired leases

The lease between McMillan Investments (WA) Pty Ltd (Tenant) and Edensilk Pty Ltd (Landlord) was to expire on 1 March 2020. As part of the COVID-19 negotiations permitted by the regulations the term was extended to 1 September 2020 and the Tenant was granted a rent reduction.

The parties did not reach an agreement as to the period of time that the rent was to be deferred.

The Tenant claimed that the lease was not varied in accordance with the COVID-19 Code of Conduct and that the Landlord was required to offer the Tenant a deferral of rent and an extension of the lease for a period of not less than 24 months.

The Landlord asserted at a directions hearing that the lease had expired (1 September 2020) and that the Tenant was no longer a party to a lease under which the Code of Conduct would apply and that the application should be dismissed.

The Tribunal determined that:

  • prior to the lodgement of the application in the Tribunal the parties were negotiating the rent relief applicable under the COVID-19 regulations;
  • the Landlord and Tenant were parties to a Code of Conduct Dispute (as defined in section 14(1) of the COVID-19 Act) at the time the application was lodged; and
  • in accordance with section 16 of the COVID-19 Act, a party to a Code of Conduct Dispute may apply to the Tribunal to have the dispute determined.

Consequently, the application was correctly lodged and the Tribunal has jurisdiction to determine the matter.

Interestingly, the Tribunal member noted that there remains a question as to what powers the Tribunal may have where there is no longer any lease in place and that any such scenario would likely be determined based on its facts.

Citation: McMillan Investments (WA) Pty Ltd and Edensilk Pty Ltd [2020] WASAT 123.


Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.