Assigning appointments under the Property Occupations Act 2014

Assigning appointments under the Property Occupations Act 2014

The new Property Occupations Act 2014 brings changes that can affect the way assignments are handled.

The First change is that the new appointment Form 6 does not have any provisions in regard to the assignment.

All appointments are now assignable.
Looking at the new legislation there has been a dramatic change to how we handle assignments. Section 113 (2) of the Property Occupations Act 2014 states “The assignee must give each client written notice of the assignment within 14 days after the assignment”.

This potentially allows, in the case of a rent roll sale, for appointments to be transferred to a buyer without a Landlords knowledge, agreement or acceptance. The buyer would then be responsible for notifying the Landlords of the sale and transfer of the appointment.
It would be Best Practice of Real Estate Agency Sales that to follow this course of action would be extremely detrimental to all parties and that the Seller should always notify the Landlord prior to settlement and provide to the Buyer proof of notification of the sale or transfer of appointments.
The Landlord should always be notified prior to settlement of the transfer of their appointment and for the Seller to discuss with the property owner any questions or concerns they may have as well as the benefits for the Landlord in transferring to the new Agency.

To discuss further, please contact Kevin Hockey at Real Estate Agency Sales on 0413 879 986 or email kevin@reas.com.au

Is GST payable in the sale of a Rent Roll

Is GST payable in the sale of a Rent Roll

In the sale of a Real Estate Agency there is no doubt that the sale is a “going concern” whereby no GST is applicable to the sale.

In the case of the sale of a Rent Roll only there remains conjecture in regards to whether it is a “going concern” or not and therefore whether GST is applicable in the sale.

Having spoken to the Australian Tax Office (ATO) previously they were clear that for a sale to be defined as a going concern there are 3 factors which would define its suitability.
1. Premises
2. Staff
3. Equipment

For it to be a going concern the buyer would be required to take the premises, the staff that operate the rent roll and the equipment used to function the business.

Or does it…….

A number of accountants argue that the definition uses the words “if necessary” and if the buyer already has premises, staff and equipment then it is not necessary.

The problem is should the ATO choose to take action at any time the risk is always with the Seller. A contract can include special conditions whereby should a Court judgement in the future rule that the GST was applicable and must be paid, the Buyer by this time may no longer be in operation, may have moved overseas, gone into receivership or faced some form of tragic circumstances since the purchase and is now not contactable or able to be held accountable to the contract. Therefore the Seller would face the cost of the payment of gst.

Another issue may also be, should the ATO decide a fine is to be imposed for not paying the GST at the time, who pays the fine?

It is our position at REAS that a sale of a Rent Roll is not a going concern and that GST is applicable to the sale. The Buyer will then claim the GST back in their next BAS and be refunded (assuming they are registered for GST).

Should however, the Accountants for both the Seller and Buyer agree that the sale is a going concern and GST is not applicable we are happy for the contract to reflect the advise provided to their clients. However, both parties must agree.

Kevin Hockey
26.11.14

For more information regarding gst please click here –  http://www.reas.com.au/is-gst-applicable-in-the-sale-of-a-rent-roll

Are you Buying or Selling a Rent Roll?

Are you Buying or Selling a Rent Roll?

Then you need to talk to us at Real Estate Agency Sales!!

We are the experts in the Rent Roll sale process. It’s all we do.

Our services include:
• Contract advice
• Solicitor referral
• Finance referral
• Due Diligence
• Rent Roll sale management
• Rent roll purchase management
• Organic Rent Roll growth

Plus of course we will find the right buyer for your business and rent roll or register with us today if you are looking to purchase.

Contact us now on 3266 4242 or email kevin@reas.com.au

Finding the Right buyer

Finding the Right buyer

There is a lot to consider when selling a rent roll. It’s unlike any other type of business sale and has repercussions for both parties given common contract conditions for most sales.

Selling a Rent Roll is often not about finding any buyer but about finding the RIGHT buyer.

Real Estate Agency Sales will take the time to consider a range of factors that may affect the successful transfer of managements to a buyer and dealing with any retention conditions within the contract.

The right Demographics, the Location of both offices, the Size of the businesses, the Experience of the buyer and the Company Brands are all taken into consideration to ensure a smooth and successful transfer for both parties which provides value for money for Seller and Buyer.

If you are Selling or Buying contact Real Estate Agency Sales on 3266 4242 or email Kevin Hockey at kevin@reas.com.au

Selling your Rent Roll Privately

Selling your Rent Roll Privately.

Today I’ve had another private seller contact me wanting help with their contract. Generally I don’t mind assisting except when it comes to asking for access to my systems, that’s a part of the real value we provide.

However the question, “isn’t that part of a normal contract” or “what is normal in this situation” left me pondering about those questions.

When selling a rent roll there is no normal.

A contract is unique to every sale. It defines in writing what the Buyer and Seller agree to verbally with the assistance of their Solicitor, Accountant, possibly Bank Manager and of course the right Broker such as Real Estate Agency Sales. In each sale, the terms may be different. These terms may not just be defined by the Price, Deposit, Settlement dates, Due Diligence or Restriction conditions, they may also include numerous other matters and the exact wording of these Conditions in the contract may effect how they can be implemented.

Therefore by not being a party to the contract it is difficult to provide advice in many matters of a private sale.

Recently I had a call from a Seller who chose to sell privately, thinking he would be better off by saving on the commission of using our services. He rang to let me know he’d made a big mistake and wished he had used us. He lost managements in the transfer and the contract had left him open to misinterpretation and misrepresentation.

Some Principals feel they can sell themselves because they will have a Solicitor representing their interests however I learnt the hard way when I sold my office that not all Solicitors know or are experienced with the sale of a Rent Roll and the unique matters that occur in such a transaction.

A Rent Roll sale is unlike other business sales.

Solicitors specialise in varying areas of Law. If you are selling a Rent Roll you should ensure you use a qualified specialist Commercial and Business Lawyer who understands and has vast experience in dealing in Rent Roll sales. We would recommend talking with Jeremy Streten from Streten Masons Lawyers.

Our contract template has been carefully drafted over many years to reflect all the pertinent matters of a Rent Roll sale. Our systems, including relevant letters and materials to assist Sellers and Buyers, have also been designed over many years and are only available to Clients who choose to engage our services.

If you have sold privately please feel free to contact me if you need help but just understand by not being privy to what has been agreed to between the parties, what has been written into the contract and how it is worded it is difficult to provide solutions.

Contact Kevin Hockey at Real Estate Agency Sales any time on 3266 4242 or email kevin@reas.com.au

Independent Brands

Independent Brands

There is a battle occurring in the Queensland Real Estate market to be the premier brand across franchises. The once dominant brands of Ray White, LJ Hooker, Raine and Horne are now in a fight for supremacy from brands such as Belle, Place and McGrath.

However there’s another battle going on in competition too and that is coming from Independents. A recent article by Real Estate Business said “According to a recent franchising market report, once dominant brands such as Gloria Jeans are losing ground to a grass roots resurgence from local cafes.”

The report suggested shifts in consumer needs and a growing trend towards a more focused, individualised approach to business has seen franchising decline across a variety of sectors in recent years, and according to industry coach and head of the Real Estate Results Network (RERN) Michael Sheargold, real estate is included.

“Nowhere is the decline more prominent than in the real estate sector,” Mr Sheargold said.

He claims the appeal of an ‘individual approach’ is preferred by modern consumers over the sanitised corporate logos and methods.

At REAS we have certainly seen 3 changing trends in recent years. These trends include more agents working from home, more Property Management only businesses and an upward growth of Independent Real Estate Businesses.

A well branded and well marketed independent brand has many attributes to a local community. A negative of Independent branding is the use of the word Boutique. Our feedback is that it confuses consumers of its message, has no meaning and adds minimal value. Consumers have a mixed understanding regarding what Boutique actually means.

Instead of using Boutique in your branding, show value in your message of the attributes of being Independent. It’s your Independence that holds value, not that you are “Boutique”.

The funds saved by being Independent should not be used to reduce fees but instead used for your marketing budget to market your brand, create awareness and attract quality clients and staff.

Franchises however also remain a genuine option for many reasons and you should always keep your options open, complete your research and apply a strategy in line with your Vision, Culture and Brand you feel would best align with those aspects of the business you want to create.

Kevin Hockey

Why use a broker to sell your business or rent roll

Why use a broker to sell your business or rent roll?

This week I have had a conversation with a principal who related with me his disappointment that he sold his rent roll privately and didn’t use me as he originally intended. It was probably 2 years ago and we had been in discussion about selling when a buyer approached him directly and he figured he could save some commission which seemed a reasonable idea at the time.

Unfortunately, a lot of things went wrong and the contract didn’t protect him. He had no support or good advice and it cost him a lot, lot more than our commission.

This isn’t a rare occurrence. I have had similar conversations with other. I remember one transaction where I was told they chose not to use a broker and of 340 managements, 130 were lost. As a broker I know how to limit that likelihood to almost certainly never happening.

Using a broker such as Real Estate Agency Sales provides you access to a full market of potential buyers, our systems to assist you in the sale process, our contract which is designed from years of experience, our knowledge of market conditions and the best methods to ensure the right sale is effected and provide advice around the process, vendors, contract matters, financial matters and the best buyer for your business.

If you have any questions about selling, contact Kevin Hockey on 0413 879986 or email kevin@reas.com.au

Our website – 1

Real Estate Agency Sales’s website has been designed to be completely user friendly and provide potential buyers the fastest, simplest access to the information required to allow you to make a decision about purchasing.

It also upholds a strict requirement to protect both Sellers and Buyers personal information and maintaining the confidentiality of all parties involved.

Our Website provides you a complete automated process for confidentiality agreement access and the ability to receive the data you require within minutes. If you want to know about a rent roll for sale, it can be at your finger tips in moments.

REAS Website

Our website – 2

Want to know more about Buying or Selling a Real Estate Agency or Rent Roll. Our website has a lot of information to help you understand more about the process.

Review our Blog page and read all about the process. Check out our services page and see how else we can help your office grow, assist in your rent roll purchase or just get a better understanding of the equity in your business.

There are lots to see on our website. Check it out now

Agents - Most Trusted Opinion Poll

Agents – Most Trusted Opinion Poll

Another survey shows agents rating poorly in the most trusted professions by ranking 28th out of 30, below lawyers, talk back radio announcers and even below politicians.

Apparently we’re surprised by this because as an industry we have improved. I agree, I have no doubt that as an industry we have improved however is it just the Top 20-30% that have improved their skills significantly just widening the gap with the rest, leaving 70-80% of the industry still untrained and unskilled?

The issue of Trust with consumers lies in our system.

From a consumers perspective, and let’s not forget they buy a property every 7-10 years, they believe they can apply a level of trust in the agent. That’s natural, it’s what we are trying to do, however we do not represent the buyer, we represent the Seller.

The Seller is told “we work for you and we will look solely after your best interests”. As the sale process continues and the feedback begins based on buyers opinions the Seller then begins to question where the loyalty lies.

How can consumers understand and trust us when our role “represents” both parties?

The American system relies on a representative of each party. Agents act for Buyers or Sellers and each are paid by their client. Agents do not communicate with both parties.  Wouldn’t this provide consumers greater clarity around who they can trust and where loyalties lay?

We do have buyer’s agents here but the system is different and it’s not an indoctrinated culture like the USA.

Is there an opportunity here for us to recruit staff to act as buyers agents within our Agencies? Salespeople’s whose role it is to service a buyer and find a suitable property, negotiate on their behalf and be paid by the buyer?

www.rebonline.com.au/breaking-news/7525-less-than-1-in-10-believe-agents-are-trustworthy?utm_source=Real+Estate+Business&utm_campaign=Real_Estate_Business_Bulletin16_04_2014&utm_medium=email