Mark Fowler (6 November 2014)
As anticipated, the Commonwealth Government has enacted further amendments to the National Rental Affordability Scheme Regulations 2008 (Cth). The amendments make alterations to the requirements for valuations, to the capped increase for variations of rent and other related changes. The amendments were registered today and take effect from 04 November 2014. A brief overview of certain aspects of the amendments is as follows.
The key aspects of this round of amendments include:
- an ability for the Secretary to extend the date for lodgement of a Statement of Compliance where satisfied that there are reasonable grounds to do so;
- changes to the ‘permitted valuation period’ which the Department describes as ‘allow[ing] greater flexibility for Approved Participants to submit Market Rent Valuation documentation (by extending it to 26 weeks – beginning 13 weeks before and ending 13 weeks after the actual first available for rent)’. The amendments also permit extensions to the date for lodging a Market Rent Valuation where the Secretary is satisfied that a reasonable excuse exists.
- permitting an increase in the market rent (against which the applicable reduction in rent must be determined) in each NRAS year by
- for the fifth and eight years of the applicable NRAS incentive period, the amount of the market valuation taken at the end of the respective preceding NRAS incentive period year; and
- for other NRAS incentive period years, by indexation against the NRAS market index.
- certain provisions that relate only to the 2013-2014 NRAS Year and which outline conditions which must be met in order for the Statement of Compliance and valuation to be accepted.
Please note this is an indicative (and not exhaustive) coverage of the changes which are detailed in length.
We are currently assessing the full effect of the amendments but release this update today to ensure NRAS Approved Participants are made aware of the commencement of the changes immediately.
As outlined in our update concerning the September 2014 amendments to the Regulations, Approved Participants may wish to review their existing contractual arrangements (both with developments entities and investors) to ensure such contracts are consistent with the newly updated laws. Particular regard should be had to any conflict between an existing contractual undertaking and the new statutory requirements with a view to ensuring:
- that the parties are not locked into performing the repealed law by their contract; and
- that the contract allows sufficient leeway for performance of the new regulatory obligations without breaching their contractual obligations.
DISCLAIMER: This update contains general information only. The information is not all inclusive and should not be considered to be legal advice. You should always obtain legal advice for your specific circumstances before relying on general information.