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Contractors license may be required for work done to rental properties

Discussion in 'Property Management' started by Xenia, 3rd Dec, 2015.

  1. Xenia

    Xenia Adelaide Property Manager Business Member

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    OK - this is from a good friend of mine who is into property manager training (actually he used to be employed as a general manager in my company).

    From his post on the SA property management community on FB:

    So South Aussie Property Managers....
    Owners may NOT be able to do their own repairs after all!
    Here's further proof that my 'source' might be right!
    An owner of a rental property is unable to perform repairs if they DO NOT have a licence as a building contractor!
    Apparently a landlord is being taken to court as we speak having 'breached' this new piece of legislation.
    Read it for yourself! I just tried CBS to clarify, but phones are in after-hours of course!
    If someone could clarify this with CBS further, that'd be great!
    Oh the fun this will give property managers letting their owners know.
    Times like these I wish I was a PM again!

    And this is the link:
    sa.gov.au - Building work contractor's licence
     
  2. Xenia

    Xenia Adelaide Property Manager Business Member

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  3. Scott No Mates

    Scott No Mates Well-Known Member

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    The important qualification is what the legislation says...

    "
    A person must be licensed as a building contractor to carry on the business of either:

    • performing building work for others
    • performing building work with a view to the sale or letting of land or buildings improved by that work".
    Unless the lessor carries on a business then a licence is not required.

    There is recent case law of a lawyer selling a property for a client but it could be demonstrated that this sale was incidental and not the business of the lawyer.

    @Xenia
     
    Last edited: 3rd Dec, 2015
  4. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Having a quick read, minor domestic works under $12k are exempted
     
  5. thatbum

    thatbum Well-Known Member

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    Yeah I don't believe this at all. It doesn't make any sense.

    I'll wait and see the actual case info I suppose.
     
  6. willair

    willair Well-Known Member Premium Member

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    That's the way it reads,just means another grey area..
     
  7. Xenia

    Xenia Adelaide Property Manager Business Member

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    yeah kind of waiting to see myself but just put here out of interest and discussion
     
  8. melbournian

    melbournian Well-Known Member

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    For Victoria if u're doing plumbing or electrical work you have to be licensed.

    With other trades there aren't really any licenses for e.g If u're doing painting u can do a million dollar contract as long as u only do painting. For works involving multiple trades like say painting plus carpentry, landscaping and a bit of plastering the limit is $5000. You are required to be a registered builder to do or project manage multiple trades once h reach that amount. You would rarely see handyman dare charge more than $5000 as once it is over that figure u need to be a registered licensed builder.
     
  9. Chilliblue

    Chilliblue Well-Known Member

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    Pretty similar to NSW
     
  10. Be Developer

    Be Developer Property Developer Business Member

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    @Xenia

    Good post!

    One simple problem, property managers in SA requires no qualification or licence.:(:(:(:(:(
     
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  11. Phar Lap

    Phar Lap Well-Known Member

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    A few things…

    You said read it for yourself, so, a link to this supposed landlord being taken to court please?

    It's important to distinguish between "repairs" and the work that is performed by a licenced building contractor. For a start it is based upon the amount in $ the work will cost.
    So most "repairs" I would have thought would come under this requirement.

    You seem to be gleeful of the opportunity to punish landlords as a PM. :(
     
  12. melbournian

    melbournian Well-Known Member

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    have a quick read of the link didn't realize define works types. I mean if it was to plaster a few holes in the wall would i need a license ? i think i am pretty good at fixing holes in walls and ceiling although i have done it mainly for myself. Would be next to impossible to license all trades (unless the SA building commission is looking to rack up dollars)
     
  13. Perthguy

    Perthguy Well-Known Member

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    It's an interesting one for sure. Painting is included in 'building works' and it seems this applies if you are in the business of painting houses and selling them on for a profit. If you were buying houses and (for example) painting them and replacing the carpet and then on-selling them, it seems at a preliminary read, the legislation may apply. My question if that is true, how is this to be enforced? It is not feasible that every property transaction is examined to see if renovation works may have been completed prior to the sale and then how can they prove you painted it yourself and didn't get a licenced contractor. Then, if the contract is less than a certain amount, the painter doesn't have to be licenced anyway.

    Paint it yourself - you need a licence.
    Pay a contractor - if under $12k (likely), no licence required?

    It's really not adding up.
     
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  14. melbournian

    melbournian Well-Known Member

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    man luckily this is not enforced in melbourne . got a chinese crew i used regularly who can do 150-200sqm of floorboard laying at $1000-$1500. Would cost me 5 times that amount if i have to hire registered carpenters and maybe a week to get it done.
     
  15. Perthguy

    Perthguy Well-Known Member

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    Under $12k? You are ok! :)
     
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  16. Xenia

    Xenia Adelaide Property Manager Business Member

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    There may be some confusion here Be Developer and I'm glad you bought this up.
    Any property transaction that involves taking money from a tenant/purchaser on behalf of another person landlord/vendor requires a license and every real estate agent has to be licensed and have a trust account to operate.

    Trust accounts are audited by the ATO every single year to monitor embezzlement and ensure that agents are doing the correct thing. I can lose my license for 50 cents being unaccounted for. There are very strict rules for licensing in SA and not having a license is a breach of section 4 of land agents act.

    Those numbers RLA...... in my signature are my license number as a land agent for South Australia.
    That means that I am the licensed agent for my company ALEXA Real Estate pty ltd. The company becomes licensed when there is a licensed director.

    Now where the confusion lies is that I as the principal licensed agent in SA can hire someone to manage my properties that holds no qualifications and call them a property manager.

    There are property manager qualifications - cert 4 and my company is a training entity that can supply them to property managers that we train.

    However, it is not mandatory that I employ someone with a cert 4 by south Australian rules as long as they are employed under my company which is licensed, then they are OK. I take the rap of anyone doing anything wrong in my company because it is my license.

    If you wanted to operate as a property manager in SA, you can do so under someone like me but if you do not have a license for SA then you are not permitted to manage other people's properties as you cannot stand alone unless there is a license and a trust account behind you, either yours or another persons.

    Hoping that makes sense.
     
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  17. Xenia

    Xenia Adelaide Property Manager Business Member

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    Oh - that means that if I send someone into a property with a landlord and they dont have their own qualifications, as long as they have an employment contract or something binding them under my license, they can still be protected under me and my indemnity insurance.
     
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  18. Be Developer

    Be Developer Property Developer Business Member

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    @Xenia

    Pretty relaxed (and somewhat dangerous) rules in SA!!! We don't have such luxury in Eastern seaboard states.

    Property Manger = required qualification + Licence is must. (and PI insurance in most cases)
     
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  19. D.T.

    D.T. Adelaide Property Manager Business Member

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    Pretty thorough run through Xenia, thanks. You mention ATO auditing though whereas CBS advised us when we began it could be done by any suitably qualified accountant of our choosing.

    BeDeveloper - even in those other states, the PM wouldn't need their own PI insurance. The agency would just add the additional employee to their policy.
     
  20. Scott No Mates

    Scott No Mates Well-Known Member

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    Not quite.

    Certificate of registration is required to work in the industry, licence to open & manage the trust account (pm or sales). Certificate holder must work under a licensee.

    As a developer or owner you don't need to hold a licence or have any qualification eg council, government body doesn't need a licence to manage its properties and collect rent but a jv would as the jv is collecting rent on behalf of its partners.