Commercial Property Management in Australia - Essay Example

Commercial Property Management in Australia Executive Summary One of the most important areas of commercial activity is the property market. The regulation of this area has been a challenge for the legislators in every country around the world. In this context, the reason for the difficulties appeared during the creation of appropriate legal rules can be justified by the existence of many issues in the specific area that cannot be located with accuracy and as a result their regulation is also a very difficult task to perform. Current paper examines specifically the commercial property management in Australia and its interaction with the legal rules of the country as they have been formulated in accordance with the principles of common law and the statutory law. Paper begins with a brief analysis of the specific subject with an effort to explicate the reason for the interaction observed between the Commercial Property Management and the law (as distinguished between common law and statutory law). The characteristics and the consequences of this interaction are also a subject of analysis to the introductory part of the paper. Furthermore, the paper presents the key principles which operate in the Commercial Property Management sector of Australia trying to emphasize on two particular aspects: the influence of common law and that of the statutory law. At a next level, the key Occupational Health and Safety Provisions applied in the Commercial Property Management Practice in Victoria (Australia) are presented and analyzed to the best possible level in order to present their similarities and their points of differentiation. It has to be noticed that among the numerous Acts applied in the specific area the following two have been chosen for analysis: the Victorian Occupational Health and Safety Act 2000 and the Victorian Occupational Health and Safety Act Regulation 2001. A reference to the recent Occupational Health and Safety Act 2004 is also being made in order to present the level of development of the legal rules regarding the specific sector. Finally, the role and the function of the Victorian Workcover Authority is presented and analyzed as of its contribution to the resolution of the problems appeared in the Commercial Property Management area. Introduction One of the most important sectors of modern economies around the world is property management particularly the one related with the commercial market. The specific field of activity seems to have common elements among the states of the international communities; there are however certain points and issues that tend to be differentiated among the particular countries. In this context, the regulation of the commercial property management tends to present specific characteristics in accordance with the ethics, the culture and the general legal environment of the country involved. Specifically, in the legal area the above differentiations can reach significant levels especially when the country involved has developed a particular legal environment and does not follow the rules set by the international community (to the level that such an initiative can be acceptable by the community’s authorities and institutional bodies). In the specific paper, the commercial property management in Australia has been formulated and operate in accordance with the principles of common law although there are also legal texts generated through the statutory law which are also accepted as ‘tools’ for interpretation and evaluation. Of course it cannot be denied that the recognition of common law as well as the existence of detailed legislative texts can have a significant impact to the homogenous development of commercial property management in the country. However, there are issues that have to be taken into account when examining the level of influence of the general legal environment to the above described area, like the existence of numerous obstacles when trying to create a common practice of behaviour in the commercial property management area. I. Overview and analysis of the LAW pertaining to Commercial Property Management in Australia Ia. Common Law and Equity Common law has a significant influence on the structure and operation of property management. The reason for that can be found to the fact that law is applicable at a first point to the majority of human activities. On the other hand, specifically for the property management there are certain issues that can be resolved only based on the principles of law. The Managing Agency Agreement is a feature which is regulated by the Law of Contract which can be considered for this reason as directly applicable to the property management. The property management proposal is also another type of contractual agreement in which the law of Contract will have to be applied. The interaction between the property management and the common law does not limited to the area of Contract Law (Mark, 2001). More specifically, the Managing Agent is obligated under the Common Law to provide his services in accordance with the rules included in the Professional Code of Ethics. In this context, in case that an agent will proceed to a breach of the existed contractual agreement there may be demands from the client’s side while a series of relevant legal rules could also be applied (like the Property Stock and Business Agents Act 1941 or even the Crimes Act 1900 (as amended). Furthermore, the duties of the agent as recognized in the common law principles prove the existence of a close connection between the common law and agent’s initiatives. Referring specifically to the duties of agent in the context of common law, it should be noticed that the agent is obligated: a) to perform obligations under the contract and to follow the principal’s instruction, b) to act in person and not delegate authority, unless expressly permitted to do otherwise by the principle, c) to take due care of the principal’s property and so on. The above issues prove that the relationship between Commercial Property Management and the common law is close and the two sides should interact constantly in order to achieve the highest possible result. Ib. Statutory Law The legislative texts which are applied on the Commercial Property Management of Australia are the following ones: a) the Conveyancing and Law of Property Act 1898, b) the Leases (commercial and retail) Act 2001, which is referring to many parts on the Commercial Property Management; and indicative example could be the article 57 of this law which provides the requirements for the appointment of new valuer if conflict of interest disclosed. More specifically, in accordance with the specific article: (1) If a valuer appointed to work out the market rent for a lease has an interest that could conflict with the proper working out of the market rent for the lease, the valuer must tell the parties to the lease and the Magistrates Court, in writing, about the conflict (including details of the conflict) within 5 days after being appointed to work out the rent; in the article (4) that follows it is stated that: for this section, the valuer is taken to have an interest that could conflict with the proper working out of the market rent for the lease if the valuer has or has recently had an interest, whether direct or indirect, in commercial property ownership or commercial property management. Another important legislative text referring to the Commercial Property Management is the Agents Act 2003 which is related with the rights and the duties of agents when they participate in the property market. An example of the importance of agents to the design and the completion of a contractual agreement is included in the article 81 which states that: "pre-contract information", for an agent acting for the buyer or seller of land, means information about: (a) any relationship, and the nature of the relationship (whether personal or commercial), the agent has with anyone whom the agent has referred, refers, or expects to refer, the seller or buyer to for professional services in relation to the sale or purchase; and (b) whether the agent receives, or expects to receive, any benefit, whether financial or otherwise, from a person whom the agent has referred, refers, or expects to refer, the seller or buyer to for professional services and, if so, the amount or value of the benefit; and (c) the amount, value or nature of any benefit anyone (other than the buyer or seller) has received, receives, or expects to receive, in relation to the sale or purchase, or for promoting the sale or purchase, or for providing a service in relation to the sale or purchase, of the land. The above Act to the extension that it sets the rights and the responsibilities of the Agent, it can also be used for the connection of Commercial Property Management with the principles of Common Law (Civil Law or even Tort law). A legal rule that could be directly or indirectly applied to the Commercial Property Management is the Land (Planning and Environment) (Compliance) Amendment Act 2003. Moreover to the above, there are numerous Acts that could be applied in the case of Commercial Property Management, like the following ones: a) the Accident Compensation Act 1985, b) the Accident Compensation (Occupational Health and Safety) Act 1996, c) the Accident Compensation (WorkCover Insurance) Act 1993, d) Workers Compensation Act 1958, e) Occupational Health and Safety Act 1985, f) Occupational Health and Safety Act 2004, g) Dangerous Goods Act 1985, h) Equipment (Public Safety) Act 1994, i) Road Transport (Dangerous Goods) Act 1995, j) Road Transport Reform (Dangerous Goods) Act 1995 (Commonwealth) and k) Mines Act 1958 II. Key Occupational Health and Safety Provisions which affect Commercial Property Management Practice in Victoria (Australia) IIa. Victorian Occupational Health and Safety Act 2000 One of the most significant legislative texts of Australia regarding the Health and Safety is the Occupational Health and Safety Act 1985. The specific Act has been alternated many times in order to be adapted to the needs of each particular occasion. In current paper, the version of the Act which is presented and analyzed as of its content is the version no. 051. The specific version presents the amendments made on the above legal text at 22 November 2000. The specific Act includes a series of provisions related with the Occupational Health and Safety. Moreover, it has been formulated in order to cover every possible issue in its area of relevance. For this reason, it begins with a general review of provisions (articles 21 to 28) relating to Occupational Health and Safety (including the obligations of employers, of the self-employed, the manufacturers and the employees). The Act continues (articles 29-37) with the Occupational Health and Safety Representatives and Committees referring to all the particular issues that may arise in a workplace regarding the Health and Safety. On the other hand, a reference to the inspectors (part 5 of the Act) and the improvement and prohibition notices (as related to the work provided by the latter, part 6 of the Act) helps to resolve a series of problems that usually appears in the workplace. One of the most important parts of the Act (apart from the 3rd part – obligations of employers) is the 7th one which refers specifically to the legal proceedings which take place in cases that the rules included in the Act are not followed by the relevant parties. The above part as formulated and applied by the governmental bodies has significant importance for the rights of the workers. At the same time the rights of all the other parties (as appeared in a workplace) are also been protected in accordance with the general principles of law and the code of practice (article 55) which is also recognized as having an increased power of enforceability. IIb. Victorian Occupational Health and Safety Act Regulation 2001 The Occupational Health and Safety (Plant) Regulations 1995 have been modified in June 2001 and the new legal text (with the relevant modifications included) constitutes the Victorian Occupational Health and Safety Act Regulation 2001. The specific Regulation has as main objective to protect people at work against risks to health or safety arising from plant and systems of work associated with plant (article 101). In this context, a series of obligations is being set for designers and manufacturers of plant (articles 301-405) while there are also provisions that impose specific duties to importers and suppliers (articles 501-606). The employers are also forced to follow certain rules related with the hazard identification, risk assessment, control of risk generally as well as regarding a specific plant, articles 702-715). The very important differentiation of these Regulations from the previous mentioned Occupational Health and Safety Act 2000 is that employers have increased responsibilities regarding the training, information and instruction of employees generally while they are also obligated to consult health and safety representative in certain circumstances (article 715). Another important feature of these Regulations comparing the Act 2000 is that every activity regarding the plant construction, even from the stage of its design has to meet specific requirements and to be approved by the relevant authorities in advance (i.e. before the commencement of any relevant designing or constructing activity). It should also be noticed that the above presented legislative texts are referring in fact to different aspects of the workplace activities with the first one to be more general while the second (the one related with the works associated with plant). IIc. Occupational Health and Safety Act 2004 On 1 July 2005, the Occupational Health and Safety Act 2004 came into effect. The new Act is the outcome of a major review of the 1985 Act [1]. The duty of employers to consult is one of the most significant changes introduced by the OHS Act 2004. Under the new Act, from 1 January 2006 employers will be required to consult with all employees who are, or are likely to be directly affected by proposed changes to the workplace that may affect their health and safety [1]. In terms of the above legal text, consultation has been considered to be the two way conversation between employers and employees that involves: a) Sharing information (information must be made available in a timely way and in a form that can be understood by employees); b) giving employees a reasonable opportunity to express their views (employees should be encouraged to play a part in the problem solving process); and c) taking those views into account (employees should help to shape decisions, not hear about them after they are made). Furthermore [1], section 28 of the OHS Act 2004 provides a duty for designers of buildings and structures which are going to be workplaces to make sure that the design does not pose risks to people using the workplace for a purpose for which it was intended. This duty will operate from 1 July 2006 and will apply to any design started after that date. IId. The role of the Victorian Workcover Authority The Australian government has created an authority (the Victorian Workcover) which has as its main task to secure the health and safety of all people participated in the country’s workforce. In this context, WorkSafe Victoria [1], as the occupational health and safety arm of the Victorian WorkCover Authority, manages the regulatory functions in relation to preventing workplace and work-related deaths, injuries and disease and enforces Victoria’s occupational health and safety laws. WorkSafe uses a Constructive Compliance Strategy in its compliance and enforcement activities, which balances a combination of positive motivators and deterrents to improve workplace health and safety. By using an integrated approach to enforce Victoria’s OHS laws, WorkSafe combines the use of one or more enforcement measures (for example, issuing an improvement or prohibition notice) with the provision of advice and guidance material [1]. On the other hand, it is noticed [1] that integral to WorkSafe’s Constructive Compliance Strategy is the recognition that real and sustainable improvement in workplace health and safety is achieved primarily by the active involvement of employers and employees in hazard identification, management and elimination. On the other hand, WorkSafe Victoria has the authority to grant licences for a series of works in sites. Licenses are issued for 28 types of work including scaffolding, rigging, operation of cranes, hoists, forklifts and pressure equipment [1]. However, in order for the organization to grant a specific licence, there are certain requirements that need to be met by every interested applicant. In this context, WorkSafe Victoria has introduced proof of identity to ensure that explosive and HCDG (High Consequence Dangerous Goods) licences are only granted to applicants who have the required qualifications, training and experience. Specifically, for individuals that apply for an explosive or HCDG licence or for nominated directors or persons responsible for security for a non-individual applying for an explosive or HCDG licence, it is required that an Identification Form – Natural Person will be completed. As for the organizations that apply for an explosive or HCDG licence they are required to complete Identification Form – Non-Individual and supply it along with the required supporting material to WorkSafe [1]. The whole procedure has to take place only once. Conclusion The role of legal rules to the formulation and the operation of Commercial Property Management has been proved to be significant. More specifically, the particular legislative texts (as being adopted by the Australian Government) seem to influence the structure and the performance of the Commercial Property market through their interaction with its management sector. Moreover, a thorough examination of the specific management area has proved that the main actors to the above interaction are the agents who have a series of rights but also of responsibilities when activating in the above area. Regarding another issue of the Commercial Property management, this of the existence of specific legal rules that are used to protect the rights of workers in commercial property sites, it has to be noticed that the relevant legal framework is of a high significance for the parties involved. More specifically, the examination of the legislation related with the Commercial Property Management (both directly and indirectly) proved that the almost all issues that could appear in the specific sector have been predicted by the legislator and there are specific rules that offer the appropriate solution in accordance with the general principles and ethics applied by the Australian courts. References Dyer, A. (1999). International Recognition and Adaptation of Trusts: The Influence of the Hague Convention. Vanderbilt Journal of Transnational Law, 32(4): 989-1009 Garvey, J. I. (1993). Judicial Foreign Policy-Making in International Civil Litigation: Ending the Charade of Separation of Powers. Law and Policy in International Business, 24(2): 461-501 Mark, S. (2001). Harmonization or Homogenization? The Globalization of Law and Legal Ethics - an Australian Viewpoint. Vanderbilt Journal of Transnational Law, 34(4): 1173-1200 Paul, E. (1999). Australia and Southeast Asia: Regionalisation, Democracy and Conflict. Journal of Contemporary Asia, 29(3): 285-302 Schiveley, R. (2000). Negotiation and Native Title: Why Common Law Courts Are Not Proper For Determining Native Land Title Issues. Vanderbilt Journal of Transnational Law, 33(2): 427-453 Vandell, K. D. (2003). Tax Structure and Natural Vacancy Rates in the Commercial Real Estate Market. Real Estate Economics, 31(2): 245-260 Acts Version No. 051 Occupational Health and Safety Act 1985 Act No. 10190/1985 (Version incorporating amendments as at 22 November 2000) Version No. 020 Occupational Health and Safety (Plant) Regulations 1995 S.R. No. 81/1995 (Version incorporating amendments as at 15 June 2001) Accident Compensation Act 1985 Accident Compensation (Occupational Health and Safety) Act 1996 Accident Compensation (WorkCover Insurance) Act 1993 Workers Compensation Act 1958 Occupational Health and Safety Act 1985 Occupational Health and Safety Act 2004 Dangerous Goods Act 1985 Equipment (Public Safety) Act 1994 Road Transport (Dangerous Goods) Act 1995 Road Transport Reform (Dangerous Goods) Act 1995 (Commonwealth) Mines Act 1958 Web sources http://www.workcover.vic.gov.au/ [1] http://www.bloorstreet.com/300block/ablawleg.htm [2] Read More