Crime

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GUEST OBSERVATION
Imagine you have just bought a home. You have moved in and, during a friendly chat with the neighbours, you find out the property had been the <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2018-07-07/what-is-stigmatised-property-and-what-are-your-rights/9911608">scene of a serious crime</a> or <a href="https://www.aicnsw.com.au/our-dream-house-was-a-meth-lab/">used to manufacture</a> methamphetamine.
How would you react? Is this something you would want to have known prior to the sale? If you had known, would this have affected you decision to buy the property? And was the real estate agent or vendor <a href="https://www.domain.com.au/news/what-do-agents-have-to-reveal-about-a-home8217s-history-20170810-gxcm5k/">under any obligation</a> to let you know?
In most cases, the answer is (somewhat surprisingly to buyers) “no”. However, amendments to Victoria’s Sale of Land Act 1962 <a href="https://www.consumer.vic.gov.au/latest-news/sale-of-land-changes-in-effect-legislation-update">have now broadened the matters</a> that must be disclosed to buyers prior to a sale, including where a serious crime has occurred. Renters who find they have entered into a stigmatised property must resort to the consumer protection laws discussed below.
<h2>Why were the laws required?</h2>
The ancient doctrine of caveat emptor (let the buyer beware) still impacts on real estate transactions. It means the buyer bears the responsibility of making their own enquiries about the property.
Property inspections are usually confined to the physical condition of the property. While it would be possible, at least theoretically, to arrange for a person to investigate its “background”, this can be a difficult process, especially if such information is concealed or hard to come by.
As a result, each state and territory has introduced laws that provide for some level of disclosure to the buyer during the conveyancing process. The extent of disclosure required and the nature of matters that must be disclosed varies from jurisdiction to jurisdiction.
Furthermore, section 18 of the Australian Consumer Law <a href="http://classic.austlii.edu.au/au/legis/cth/consol_act/caca2010265/sch2#_Toc32223214">considers conduct</a> as misleading or deceptive where a matter is not disclosed but, in the circumstances, there is a reasonable expectation it would be.
The problem is that while disclosure may be required in matters involving, for example, a structural fault or a road-widening proposal, such information is confined to physical issues affecting the property.
However, what happens when the matter involves not a physical defect but a psychological or stigmatising one, such as a murder, for example? Such information may be of considerable importance to potential buyers who, for personal or religious reasons, would find living in a property where such an event occurred intolerable. On a more mercenary note, the impact on resale value of the property <a href="http://journalarticle.ukm.my/7237/1/115-293-1-PB.pdf">could be significant</a>.
<h2>The nature of ‘stigmatised’ property</h2>
Concern about the effect of stigma on property is not a recent phenomenon. Courts in several jurisdictions, including Australia, <a href="https://api.research-repository.uwa.edu.au/portalfiles/portal/1218611/3632_3632.pdf">have had to grapple</a> with buyers who had discovered, after purchase, that the property had been the scene of a serious crime or criminal activity, a suicide had occurred, persons had been suffering from certain illnesses, or a sex offender lived nearby.
In one case a young man had murdered his parents and sister in their Sydney home. The property was later sold to a young couple. After discovering the tragic events that had occurred in the home, they sought to withdraw from the sale on religious grounds.
There was a <a href="https://www.theage.com.au/national/estate-agents-fined-over-triple-murder-house-20041220-gdz86g">significant amount of criticism</a> of the real estate agent for not informing the buyers about what had occurred there. After considerable public pressure and an investigation by the NSW Office of Fair Trading, the contract was set aside.
On a more ethereal note, there have been a series of cases in the United States where buyers have sought, in some cases successfully, to have a sale rescinded <a href="http://zillow.mediaroom.com/2019-10-29-Selling-a-Haunted-House-Heres-What-You-Need-to-Know">because the house</a> was (allegedly) haunted or the subject of <a href="https://casetext.com/case/stambovsky-v-ackley">paranormal activity</a>.
<h2>Disclosure laws regarding stigma</h2>
The Victorian legislation clarifies obligations for estate agents and vendors regarding <a href="https://www.consumer.vic.gov.au/latest-news/sale-of-land-changes-in-effect-legislation-update">the disclosure of “material facts”</a>.
In summary, an estate agent or vendor cannot knowingly conceal any material facts about a property when selling land. The legislation is supported by guidelines that clarify the nature of a material fact. This includes circumstances where, during the current or previous occupation, the property was the scene of a serious crime or an event that may create long-term potential risks to the health and safety of occupiers of the land.
Specific examples include extreme violence such as a homicide, the use of the property for the manufacture of substances such as methylamphetamine, or a defence or fire brigade training site involving the use of hazardous materials. Relevant factors can include the reaction of other potential buyers to the fact, including their willingness to buy in light of the revelation.
Significant penalties and even imprisonment await vendors and real estate agents who do not comply.
<h2>Will the laws work?</h2>
As with any new legislation, we will have to wait and see how this plays out. However, some preliminary comments can be made.
First, it will be interesting to see how the term “knowingly” is interpreted. Could an agent or vendor avoid the provisions if they merely suspect an issue but do not look further into it? The term “wilful blindness” comes to mind.
Second, a fact can be material in either a general or a specific sense. The general sense seems straightforward, as it refers to information most people would consider when deciding whether to buy a property.
However, how serious must a crime be to be material? What if the situation involves cultivation of marijuana rather than a more egregious substance?
More complex is where a material fact may be of importance to a specific buyer but not buyers generally. For example, in the case discussed above, the buyers’ religion made it impossible for them to live in a home where a violent murder had occurred. In this case, the onus seems to be on the prospective buyer to ask questions about matters of concern to them.
<h2>What now?</h2>
Although one suspects that buyers of an allegedly haunted house might not succeed under this legislation, the laws address a significant gap regarding disclosure of psychological considerations in the purchase of a property rather than the traditional physical ones.<img src="https://counter.theconversation.com/content/132766/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/eileen-webb-95332">Eileen Webb</a>, Professor of Law and Ageing, School of Law, <a href="https://theconversation.com/institutions/university-of-south-australia-1180">University of South Australia</a>
This article is republished from <a href="https://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/when-your-house-has-a-disturbing-history-what-should-buyers-be-told-about-its-past-132766">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

When your house has a disturbing history what should buyers be told

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Charterhill SMSF accountant George Nowak has pleaded guilty in the District Court of South Australia to 17 counts of aggravated deception and 1 count of dishonest dealings with documents. 
Nowak’s bail was revoked on 24 February 2020. The matter has been adjourned to 19 March for further submissions on sentencing.
Mr Nowak entered the plea during the third week of his criminal trial on these charges.    
ASIC investigated Mr Nowak's conduct in dealing with members of self-managed superannuation funds, who were undertaking property purchases offered by companies of which he was a director, including EJ Property Developments Pty Ltd.
Charges laid against Nowak concern the misappropriation of $1.2 million in SMSF monies by not holding those funds in a designated account and by not applying those funds towards the intended property purchase.
The matter is being prosecuted by the Commonwealth Director of Public Prosecutions.
Sentencing submissions are listed for 24 February 2020.
The charges of aggravated deception contrary to section 139(a) of the SA Criminal Law Consolidation Act 1935 each carry a maximum penalty of fifteen years imprisonment.
The charge of dishonest dealings with documents contrary to section 140 of the SA Criminal Law Consolidation Act 1935 carries a maximum penalty of ten years imprisonment.
Mr Nowak was the founder of the Charterhill group of companies. The following companies in the Charterhill Group have been placed under external control:
<ul>
<li>Lending Solutions International Pty Ltd – liquidators appointed (Andrew Heard and Anthony Phillips of Heard Phillips)</li>
<li>Nova Real Estate Pty Ltd – external administrators appointed (Andrew Heard and Anthony Phillips of Heard Phillips)</li>
<li>EJ Property Developments Pty Ltd – receivers and managers appointed (Michael Basedow and Leigh Prior of Pitcher Partners)</li>
<li>Financial Wellness Pty Ltd – receivers and managers appointed (Michael Basedow and Leigh Prior of Pitcher Partners)</li>
</ul>
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Charterhill SMSF accountant George Nowak pleads guilty to dishonest dealings

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A Gordon Park real estate agent has been banned from working in the real estate industry for life and ordered to pay more than $80,000 in fines, compensation and costs after the Office of Fair Trading (OFT) took disciplinary action against him in the Queensland Civil and Administrative Tribunal (QCAT).
Martin David Moala Jones was co-jointly fined $15,000 with his company, Diligent Property Management Pty Ltd, and ordered to pay $18,087 in compensation and $47,767 in costs.
Mr Jones and his company were permanently disqualified from the industry and Mr Jones has been permanently banned from being an executive officer of any corporation licensed under the Property Occupations Act 2014.
The tribunal heard that Diligent Property Management’s corporation licence expired in May 2016 and Mr Jones had failed to renew it but had continued to operate the business until June 2017.
In November 2016, the OFT received a complaint from a property owner who believed he had not received all the rent money he was entitled to from Diligent Property Management.
The OFT investigation established a number of failures to comply with the law including that Mr Jones had not kept proper records, had not been properly appointed by his clients, and had mismanaged trust money.
Mr Jones’s failures led to a loss of his clients’ money. The OFT was forced to appoint a receiver over the trust property which found the trust account was overdrawn by more than $18,000.
Clients were compensated for their loss by the Agents Financial Administration claim fund, which is administered by the OFT.
Fair Trading Executive Director Brian Bauer welcomed the tribunal’s decision to permanently disqualify Mr Jones from holding a real estate agent licence or certificate.
“There is no place in the real estate industry for people who do not comply with the law,” Mr Bauer said.
“People trust real estate agents with their most valuable asset, their property, and the OFT will continue to take agents to task if they are found to be doing the wrong thing.”
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Gordon Park estate agent Martin Jones banned for life

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GUEST OBSERVATION
On the night the 2016 <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/2049.0" target="_blank">census </a> was taken, more than 116,000 Australians were homeless. This was a 30% increase from the decade before.
What has driven this increase is difficult to pin down, but research points to a lack of affordable housing, poverty and personal vulnerabilities such as trauma, mental illness and substance misuse as key factors.
We recently published a paper in the <a href="https://link.springer.com/article/10.1007/s10940-019-09407-y" target="_blank">Journal of Quantitative Criminology</a>, exploiting a rich dataset derived from tracking 1,600 disadvantaged respondents over approximately three years.
And we found people who have been incarcerated are at a greater risk of becoming homeless. But interestingly, the reverse isn’t true – homeless people are not at greater risk of incarceration.
Identifying similarities
Like the homeless population, Australia’s prison population has increased by <a href="https://www.propertyobserver.com.au/http://www.abs.gov.au/ausstats/abs@.nsf/mf/4512.0?OpenDocument" target="_blank">56%</a> in the past decade, from 25,968 to 40,577 people.
Social researchers and policymakers have long been aware of a strong association between incarceration and homelessness. Local and international <a href="https://journals.sagepub.com/doi/abs/10.1375/acri.39.1.20" target="_blank">studies</a> consistently report the homeless are over-represented in prison and ex-prisoners are over-represented among the homeless.
That such a strong association exists should come as no surprise.
Both populations share many similar characteristics – lower education levels, high rates of mental and physical illness and substance misuse, as well as high rates of economic disadvantage.
Yet, despite numerous studies, the question of whether this association reflects causal relationships has proven surprisingly difficult to answer.
One reason for this is that researchers have had to rely on samples of either prisoners or the homeless, and these samples are not suited to addressing questions of causality.
Are homeless people more likely to be imprisoned?
Our paper used data from <a href="https://melbourneinstitute.unimelb.edu.au/journeys-home" target="_blank">Journeys Home</a>, a study uniquely suited to shedding light on the relationship between incarceration and homelessness. Launched in 2011, Journeys Home not only tracks people exposed to homelessness and housing insecurity over time, but also it captures important information on their housing circumstances and contact with the justice system.
There is no universally agreed definition of homelessness, so we tested two different approaches – broad and literal.
Our broad definition included people sleeping rough, people in emergency accommodation, in boarding houses, couch surfing and people staying temporarily in a hotel or caravan park. This aligns with the way homelessness is commonly defined in Australia.
We found that homelessness, broadly defined, does not increase the risk of incarceration.
Being “literally” homeless is a more limited definition commonly used in the USA. It restricts the definition to those who were on the streets, in squats or staying in emergency or crisis accommodation.
Based on <a href="https://repository.upenn.edu/cgi/viewcontent.cgi?article=1118&amp;context=spp_papers" target="_blank">previous research</a>, we expected this form of homelessness would be linked to a higher risk of incarceration.
To our surprise, it wasn’t. Being literally homeless also has no effect.
Why might this be the case?
When we examined forms of contact with the justice system, we found being homeless does not increase the risk of being apprehended or held overnight by the police or sent to court.
This suggests homelessness does not lead to incarceration because it does not increase any type of contact with the justice system usually preceding incarceration.
Are ex-prisoners more likely to become homeless?
The answer is yes, but the immediate effect is modest.
Our research shows the risk of ex-prisoners becoming homeless increases significantly six months after release, and this increased risk persists for nearly another year.
Responding to the delayed and persistent effect of incarceration is important.
Policy interventions such as <a href="http://www.corrections.vic.gov.au/home/release/transition+programs/" target="_blank">Reconnect</a>, a transition and post-release support program, provide assistance for a short period (up to 12 weeks) following discharge. While this is clearly warranted, our results suggest the need to broaden and extend existing interventions.
Many ex-prisoners rely on family and friends in the immediate period following release. Many appear to enjoy a “<a href="https://www.tandfonline.com/doi/abs/10.1300/J076v43n01_05" target="_blank">honeymoon</a>” period of six months or so.
At that point, ex-prisoners’ housing starts to breakdown. Many start to couch surf or live in boarding houses, where there is limited housing security and they are exposed to poor living conditions.
Clearly, families provide important social support to ex-prisoners, but they often have limited resources. Based on our research, we feel that policy initiatives should consider ways of engaging and supporting ex-prisoners’ families, as well as funding extended settlement support programs delivered through a range of supported housing arrangements.
A focus on assisting families and extending settlement support programs is the next step in developing policy approaches. These would more effectively mitigate the extended risk of homelessness and housing instability that our research shows ex-prisoners experience.<img src="https://counter.theconversation.com/content/113570/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Guy Johnson, Professor, Urban Housing and Homelessness, RMIT University
Julie Moschion, Senior Research Fellow, Melbourne Institute, University of Melbourne
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/ex-prisoners-are-more-likely-to-become-homeless-but-the-reverse-isnt-true-113570" target="_blank">original article</a>.
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