In 2009 the Government introduced two separate safety requirements for anybody selling a property on which there is a residential premises.  All properties that have a residence must be fitted with two RCD’s and hard wired smoke alarms that are sold since that time.  This applies to residential properties in the city as well as farming properties.

The difficulty with farming properties is that there are often more than one residence and sometimes one or more of these are semi-derelict.

If any of the residences are not intended for further use, then the Buyer and Seller can come to agreement that the residence will be demolished either before or after settlement and if it is after, the Buyer must provide their intention in writing that the residence will be demolished within six months of the date of settlement.

It is also possible to partially demolish the residence for alternative uses (e.g. storage of chemicals or other products), but it needs to be clear that the residence is no longer able to be used for that purpose.

The regulations apply to all residential premises on properties which are being sold.  The RCD regulations come under Part IV of the Electricity Amendment Regulations 1947 and the Smoke Alarm Regulations come under Part VIII Division III of the Building Amendment Regulations 2012.

Penalties for breach of these regulations are up to $15,000 for individuals or $100,000 for a company and we are aware that the Electricity Safety Authority have audited the records of property sales and checked residences for compliance in the past.

We note that this legislation also applies to the lease of any property which has a residence as well and the obligations are the same as for a sale.

Some sale contracts provide clauses specifying that RCD’s and smoke alarms are a condition of the contract and oblige the Seller to satisfy those obligations prior to settlement.  This will enable the Buyer to insist on that work being completed prior to settlement.  Without the clause in the contract it is difficult to force a Seller to comply with the regulations, even though the penalty can readily be enforced against them.

There is no legal obligation to have RCD’s in workshops and shearing sheds on farms but a good standard of Occupational health and safety suggests that any wise farmer will have them installed for their own safety and the safety of their family and employees.

Take home message

If you are selling or buying a property on which there is a residence then you should ensure that the Seller complies with his obligations and if there is any doubt, you should ensure that there is a clause in the contract obliging the Seller to install RCDs and hard wired smoke alarms, and have a qualified electrician provide a safety certificate.  This will satisfy the requirements and also be a safe environment for the Buyer.