Home Loan Newsletter - December 2016 - Harvest Financial Group

Interest rate announcement – December 2016

Today the Reserve Bank of Australia met to review the official cash rate. After cutting rates in August, the RBA have decided to leave rates on hold at 1.50% again this month. We expect that most lenders will leave their rates unchanged, in line with the Reserve Bank’s decision.

Major banks announce rate increases

Over the last 2 weeks, a number of major banks have announced increases to fixed and variable interest rates for both owner occupiers and investors. The banks have implemented these rate increases in response to rising international funding costs, exacerbated by the election of Donald Trump, and growing pressure on their net interest margins. If you have a loan through one of the major banks and would like to review it to ensure it remains competitive, please contact us for a free home loan health check.

Changes to NSW Strata Laws that came into effect on 30 November 2016

A number changes to NSW Strata Laws came into effect on 30 November 2016. These changes are designed to modernise strata laws to better align them with how people live today and into the future. In this newsletter we take a look at some of the key areas that have been updated or changed in the new laws.

Key changes for owners to be aware of

New model by-laws: A new set of model by-laws have been released including changes to the rules relating to the keeping of pets. All existing strata schemes are required to review their by-laws by 30 November 2017.

Renovations: Cosmetic renovations that involve common property no longer need approval and a new streamlined approval process has also been introduced for approvals for both minor and major work.

Electronic Communications: Electronic communications can now be used for official strata business including online voting, electronic meeting papers and calling in to meetings.

Collective sale of a strata scheme: Owners can now collectively sell or renew their block. For a collective sale or renewal to proceed, 75% of lot owners must agree to the sale or renewal and the Land and Environment Court must be satisfied that the sale or renewal plan is equitable.

Key changes for owners to be aware of

Tenant participation: Tenants can now elect a representative to sit on the strata committee if at least half of units in their strata block are tenanted.

Other key general changes for owners to be aware of

Disclosure requirements for strata managers: Strata managers are now required to disclose any third party commissions paid to them in the previous 12 months at the owner’s corporation AGM. In addition, a strata managing agent cannot accept any gift which is valued at more than $60 in relation to the performance of their duties without approval of the owner’s corporation.

Agency Agreements: The renewal of the appointment of a strata managing agent can now be only for a maximum term of up to 3 years. After this time, the appointment cannot be simply rolled over into a new 3 year term, a new negotiation must be conducted and a new agreement must be entered into.

For those who either own or are renting a property in another state other than NSW, we recommend that you review your strata agreements regularly to ensure they remain current and up to date.