21 November 2018 Sharon Fox-Slater
While the Airbnb juggernaut seems to show no signs of slowing, hosts are risking their finances by failing to ensure they have legal liability insurance.
The tragic death of a 4-year-old boy and the injury of a 7-year-old girl, who were playing on a homemade swing when it toppled down a slope at a property being rented via Airbnb on the Sunshine Coast in September, raised a question about legal liability at Airbnbs. The incidents shone a spotlight on the insurance gap that exists if the property owner (host) does not have specialist short-term landlord cover.
My client has home and contents cover
Ordinary owner-occupier insurance is generally insufficient to cover death and injury if the property is being rented, either through a standard lease or via a share accommodation platform like Airbnb. Most home and contents policies stipulate that there is no legal liability cover if the premises are being used to generate an income — and that includes rent.
Policyholders intending to use the property for Airbnb can ask if their insurer will extend cover, but as most insurers consider this “high risk”, there’s a good chance they’ll be refused.
My client has landlord insurance
Typical landlord insurance will only insure stays longer than 90 days and usually requires copies of residential tenancy agreements, which means it won’t cover short-term stays. Those with standard (fixed-term lease) landlord cover should confirm with their insurer if it is possible to switch to short-term cover if they go down the Airbnb route — it may not be, as not all landlord insurers offer cover for short-stay leases, and even if they do, they may specifically exclude Airbnb.
BTW: If your landlord thinks a bit of “secret squirrel” is best and they suggest keeping their plans to rent the property via Airbnb quiet from their insurer, they should think again. It is a requirement under the Insurance Contracts Act 1984 (Cth) for policyholders to notify their insurer if there is any change in circumstances, such as a decision to offer their premises for short-term rental. Failure to notify an insurer of a change in living conditions could be considered a breach of the contract and may void the policy.
What about host protection?
Relying on Airbnb’s Host Protection Insurance is fraught. Although it offers up to US$1 million in cover “in the event of a third-party claim of bodily injury or property damage” during an Airbnb stay, it generally only applies when the host or landlord has been at fault or been negligent in the circumstances of the injury.
In this specific case, there would be a need to prove that the owner of the property was aware, or should have been aware, that the swing posed a risk to children who used it, and in light of that knowledge, that they had failed to repair and maintain the swing or remove it. If it is determined that no one was at fault, then there would be no compensation payable.
If, however, it could be proved that the swing was clearly unsafe and the property owner should have been aware it posed a risk, but still failed to repair or remove it, then the children’s family could have grounds for a claim against the host.
So how can my landlord protect their legal liability?
The best way for a host/landlord to protect their legal liability when they rent their property via Airbnb is to have the right landlord insurance. Your landlords need a specialist policy that covers the risks associated with short-term leasing — including legal liability — and one which specifically covers renting via share accommodation platforms like Airbnb.
Hosts/landlords and their agents should reduce the risk of being responsible for damage to property or for compensation for an injured guest by making sure they take steps to avoid any liability in the first place. A key to this is ensuring the property is safe and well maintained.
Despite the best intentions, sometimes things don’t go according to plan and the host/landlord — and also possibly you as their agent — can face a compensation claim from a guest. Having a guest injured or worse on the property is bad enough; finding out that your landlord (and quite possibly yourself) could be legally liable but not insured could be a financial disaster.
So, it pays to make sure landlords hitching their wagon to the Airbnb star have the right short-term insurance in place, and that your Professional Indemnity cover is up to date, too.
Information for settlement agents
Source: 10/5/2018 Department of Finance website HERE
“The formal billing schedule for land tax assessments is generally between October and December each year. As such, a 'Certificate of Land Tax Charges' issued prior to an assessment will always be an estimate.
Consider whether any exemptions may apply to the property being sold.
Single ownership rate of land tax
A 'Certificate of Land Tax Charges' will include both the proportionate land tax and the single ownership figure. If you are a managing agent, the latter can also be obtained by inserting the unimproved valuation of the land and the appropriate assessment year into the land tax calculator.
If a 'Certificate of Land Tax Charges' is issued for a property with a memorial registered under section 76 of the Taxation Administration Act 2003, please contact the Recovery Branch to obtain important information.”
Source: 10th May 2018 AICWA e-Newsletter
The GST on property transactions measure has been introduced, as schedule 5 to the Treasury Laws Amendment (2018 Measures No. 1) Bill 2018.
The Government will strengthen compliance with the Goods & Service Tax (GST) law by requiring purchasers of newly constructed residential properties or new subdivisions to remit the GST directly to the Australian Taxation Office (ATO) as part of settlement. The measure will require the purchaser of newly constructed residential properties of new subdivisions to remit the GST on the purchase price directly to the ATO as part of Settlement for contracts on or after July 1, 2018.
You can access the legislation as introduced along with the explanatory materials by following this link HERE.
Change to Western Australian Registrar and Commissioner of Titles’ Joint Practice: Verification of Identity and Authority – fraud mitigation
31 January 2018
As foreshadowed and as part of their fraud mitigation strategy, the Western Australian Commissioner of Titles and the Registrar of Titles have updated their Joint Practice for Verification of Identity and Authority (VOI Practice) for paper-based transactions. The updated VOI Practice more closely aligns to the requirements for national electronic transactions. The changes seek to improve the integrity of information in the Western Australian Land Titles Register, reduce the risk of fraud and improper dealings, and remove confusion for customers and agents operating in both electronic and paper environments.
The key changes to the VOI Practice will:
• extend the requirement for verification of identity to property buyers and caveators lodging and withdrawing caveats;
• update the categories of documents needed to support verification of identity;
• update the procedures for conducting verification of identity in a foreign country; and
• improve the procedures for self-represented parties.
Makes me laugh that "the Federal Government will strengthen compliance" BY MAKING OTHER PEOPLE DO THEIR JOB!!!! Yet another coming tax trap for buyers of new properties. GST Withholding.
From 1 July 2018, the Federal Government will strengthen compliance with the Goods & Service Tax (GST) law by requiring purchasers of newly constructed residential properties or new subdivisions to remit the GST directly to the Australian Taxation Office (ATO) as part of settlement. Under the current law (where the GST is included in the purchase price and the developer remits the GST to the ATO), some developers are failing to remit the GST to the ATO despite having claimed GST credits on their construction costs.
The measure will require the purchaser of newly constructed residential properties of new subdivisions to remit the GST on the purchase price directly to the ATO as part of Settlement for contracts on or after July 1, 2018.
Changing the business mindset from Boomer property consumer to Millennial property consumer, is here, Don't lose sleep, this article might be of assistance.
Conveyancers - are you meeting the needs of your Millennial clients? By Bek Hayes, CEO AICSA
One of the largest generations in history is about to move into its prime spending years. Millennials are poised to reshape the economy; their unique experiences will change the way we buy and sell, forcing companies to examine how they do business for decades to come.
What keeps you up at night? For me, one of my biggest concerns is the impact of the Millennial generation on the Baby Boomer formed Association. Running an Association, meeting Member expectations, keeping it relevant, alive, innovative is no easy task – although I love a good challenge and I definitely have one!
The ‘modern’ Association was set up by Boomers for Boomers – and they are a world away from the digital native Millennials. Taking the Association into the future means significant change and change away from the post-WW2 model we are so familiar and comfortable with. Technology has driven change; the millennial generation is the first to have grown up in an always on fully digital world. Their passion for technology shapes the way they live and shop. They live and work by their smart device – the world has shrunk as social media platforms have expanded.
Landlords lose thousands in tax savings in new bill
It's no surprise therefore, that a bill slipped through unobtrusively on November 15 when the nation was focussed on the result of the same-sex marriage survey. However, many Australians who have bought a rental property this year or are thinking of buying a rental property will be affected by this change.
New Commonwealth Government legislation came into effect on 1 July 2017 requiring more information to be provided to the Australian Taxation Office (ATO) when ownership of a property changes. This applies to all buyers and sellers across Australia. The requirements are a COAG initiative to enable the ATO to develop consistent and comparable datasets in the national database, which will reduce tax error and increase tax compliance.
Every state and territory is implementing the data collection in accordance with individual state legislation. In Western Australia this initiative has been led by Landgate, supported by the Office of State Revenue.
Section 43A of the Land Tax Assessment Act 2002 provides a concession for the amount of land tax payable on subdivided lots owned at 30 June each year.
This concession allows subdividers to pay land tax and metropolitan region improvement tax on the lower undeveloped or englobo value of land holdings, rather than the full subdivided value of lots, for one year after the creation of the lots.
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