Swimming Pools and their Impact on Conveyancing and Leasing Practice in NSW
SUMMARY
Legislative changes require contracts for sale of land to have, where there is a swimming pool on the property or the common property in the case of a strata unit, a certificate of compliance OR a final occupation certificate and evidence of registration of the pool annexed to the contract.
Failure to do so will allow purchasers the right to rescind within 14 days of exchange without penalty. Aggrieved vendors may have a cause of action in negligence against solicitors and Agents.
In residential leasing situations these changes which are operative from 29 April 2015 Landlords whose properties include a swimming pool on either the property or the common property must provide to tenants either a certificate of compliance OR a final occupation certificate and evidence of registration of the pool. Failure to do so will allow tenants to rescind the lease at any time without penalty. Aggrieved Landlords may have a cause of action in negligence against the Agents who prepare the tenancy agreement.
Suggestion
- Always make detailed enquires of landlords and vendors as to swimming pools;
- Always advise clients to make sure they have registered their pool online;
- Always advise the client in writing of the necessity of having a certificate of compliance OR a final occupation certificate and evidence of registration of the pool.
- Always ensure certificate of compliance OR a final occupation certificate and evidence of registration of the pool are annexed to relevant contracts for sale of land before exchange occurs;
- Always ensure a certificate of compliance OR a final occupation certificate and evidence of registration of the pool are provided to prospective tenants before a residential tenancy is entered into.
Until quite recently the presence of a swimming pool barely caused a problem in a conveyance for either the Vendor, the Agent, or the Vendor’s solicitor. There were two reason why swimming pools were barely more than a minor inconvenience. The first reason was all contracts for sale of land contained a statutory warning on page 2a:
WARNING-SWIMMING POOLS
An owner of a property on which a swimming pool is situated must ensure that the pool complies with the requirements of the Swimming Pools Act 1992. Penalties apply. Before purchasing a property on which a swimming pool is situated, a purchaser is strongly advised to ensure that the swimming pool complies with the requirements of that Act.
The second reason was that most prudent conveyancing practitioners included a special condition in terms similar to the following:
In the event that a swimming pool is situated on the subject property, the Vendor does not warrant that such swimming pool complies with the requirements imposed by the Swimming Pools Act 1992 and the regulations prescribed therein, and the Purchaser agrees that upon completion, they shall comply with the requirements of the Act and such regulations relating to access to the swimming pool and erection of a Warning Notice. It is further agreed that this clause shall not merge on completion
The effect of these two practices was to render irrelevant the problem of non-complying swimming pools.
Recent legislative changes that take effect as of 29 April 2015 have changed the situation completely. At the end of this paper you will find the complete schedule 2 to the Swimming Pool Amendment Act 2012.
Section 3 of the Swimming Pools Act 1992 includes a very broad definition what is included in the expression ‘swimming pool’. A swimming is pool is defined thus”
“swimming pool” means an excavation, structure or vessel:
(a) that is capable of being filled with water to a depth greater than 300 millimetres, and
(b) that is solely or principally used, or that is designed, manufactured or adapted to be solely or principally used, for the purpose of swimming, wading, paddling or any other human aquatic activity,
and includes a spa pool, but does not include a spa bath, anything that is situated within a bathroom or anything declared by the regulations not to be a swimming pool for the purposes of this Act.
The broad nature of what is considered a swimming pools makes it very important to ask Vendors or Landlords more than just a basic questions such as ‘Is there a swimming pool on the property?’. It is important to find out what is situated on the property or the common property in the case of a strata sale.
Additionally it must be remembered that these legislative requirements apply to all manner of residential accommodation and such as normal homes, units, villas, hotels, boarding houses.
We will consider the effect of the legislative changes on contracts for sale of land and the associated conveyancing requirements first.
- SALE OF LAND
(a) Prescribed Documents
As of 29 April 2014 clause 16 of Schedule 1 of the Conveyancing (Sale of Land) Regulations 2010 will require a new prescribed document for contracts for sale of land, namely, a valid certificate of compliance or a relevant occupation certificate along with proof of registration of the pool.
(b) Effect of omitting to attach the Prescribed document
Sections 19 and 20 of Conveyancing (Sale of Land) Regulations 2010 (‘the Regulations’) allow purchasers to rescind the contract within 14 days of exchange in the event the vendor fails to annex a prescribed document notwithstanding any special condition to the contrary. The Regulations cannot be contracted out of.
If the vendors conveyancer or solicitor fails to include this new prescribed document and the purchaser rescinds within 14-days of exchange then an unhappy vendor who sustains a loss may have an action in negligence against the conveyancer or solicitor who prepared the contract.
Additionally if the omission is due to the actions of the Agent in situations where contracts are exchanged with no cooling-off period such as at an auction then the Agent may also be open to a negligence claim.
For this reason Agents who are aware of a swimming pool on either the property for sale, or in strata situations, a pool on the common property, should be diligent in communicating this fact to the vendor’s solicitor and checking that any contract they distribute contains this new prescribed document.
(c) What is a Certificate of Compliance?
This is a certificate issued by a local council or an accredited certifier and certifies the pool and the pool barrier complies with building regulations and pool safety laws. Local councils will usually charge a fee of about $150.00 to inspect and issue a certificate and a further $10.00 to register the pool. Private certifiers are free to set their own fees and these may be more or less than what is charged by a local council.
There is a website available for checking to see if the pool already has a certificate of compliance. The website where a search can be conducted is:
www.swimmingpoolregister.nsw.gov.au
The certificate remains valid for three years.
Registration on the register is mandatory and considerable fines may be levied against a property owner who fails to register their swimming pool. Fines of up to $5,500.00 may apply against owners who fail to ensure their swimming pools are compliant and on-the-spot fines of $550.00 may also apply. The fines will usually result from enforcement action taken by local councils who are in turn alerted by concerned neighbours or routine inspections.
(d) Occupation Certificate Instead?
If the pool is less than three years old there is no need to obtain a further certificate of compliance. Instead the Occupation Certificate is annexed to the contract as well as proof the pool has been registered on the swimming pool register noted above. If it has not then it should be registered and then the proof of registration is also attached to the contract for sale of land.
(e) Best Practice
In light of the foregoing we suggest the following procedures be adopted with a view to adopting a best practice approach:
- Always enquire of a vendor if the property has the benefit of a swimming pool;
- If there is a swimming pool check with the vendor to see if the pool has been registered and if the Vendor holds a current valid certificate of compliance or an occupation certificate that is less than three years old;
- Advise the vendors in writing that if the contract is exchanged after 29 April 2015 the new requirement will apply and the potential consequences of non-compliance;
- Recommend to the vendors that they give consideration to arranging a council inspection or an accredited certifier to provide a certificate of compliance to avoid delays in exchange if the property is still on the market after 29 April 2015; and
- Advise vendors in writing not to exchange non-compliant contracts after 29 April 2015.
- RESIDENTIAL LEASING
As noted in the material provided in Annexure A the legislation provides for mandatory registration and certificates of compliance or occupation certificates being supplied to tenants at the time of entering into residential tenancy agreements.
In the event the landlord fails to comply with these new provisions tenants would be allowed to terminate the lease without penalty.
The Agents who are responsible for the preparation of residential tenancy agreements must ensure that the agreements entered into after 29 April contain the new statutory provisions. They should also communicate the legislative requirements for swimming pool compliance to the landlord.
If the Agent fails to provide this new prescribed document to the tenant and the tenant rescinds the lease at any time an unhappy landlord who sustains a loss may have an action in negligence against the Agent who prepared the rental agreement.
For the foregoing reason we suggest the that leasing Agents adopt a practice and procedure similar to the practice outlined above for Sales agents.
Annexure A. Schedule 2 of the swimming Pool Amendment Act 2012
SWIMMING POOLS AMENDMENT ACT 2012 – SCHEDULE 2
SCHEDULE 2 – Amendment of other legislation
2.1
2.2 – Conveyancing (Sale of Land) Regulation 2010
Schedule 1 Prescribed documents
Insert after clause 15:
16 If the contract relates to land on which there is a swimming pool within the meaning of the Swimming Pools Act 1992 to which that Act applies, a copy of either of the following in respect of the swimming pool:
(a) a valid certificate of compliance issued under that Act,
(b) a relevant occupation certificate within the meaning of that Act and evidence that the swimming pool is registered under Part 3A of that Act.
Note: A relevant occupation certificate is an occupation certificate issued under the Environmental Planning and Assessment Act 1979 that is less than 3 years old and that authorises the use of the swimming pool.
2.3 – Residential Tenancies Regulation 2010
Schedule 1 Standard Form Agreement
Insert after clause 40:
[Cross out this clause if there is no swimming pool]40A. The landlord agrees to ensure that at the time that this residential tenancy agreement is entered into:
40A.1 the swimming pool on the residential premises is registered under the Swimming Pools Act 1992 and has a valid certificate of compliance under that Act or a relevant occupation certificate within the meaning of that Act, and
40A.2 a copy of that valid certificate of compliance or relevant occupation certificate is provided to the tenant.
Disclaimer: The information in this article is correct as at 25 November2014. This information is not to be taken as legal advice and at all times we recommend you seek independent legal advice regarding your own individual circumstances from your legal representative.
For further information, please contact:
Elizabeth Pecipajkovski Solicitor Phone: (02) 9267 6263 Email: Elizabeth@jemfish.com.au
Greg Jemmeson Partner Phone: (02) 9267 6263 Email: Greg@jemfish.com.au