CONSUMING MATTERS

December 2001

PRODUCED BY

THE CONSUMER AND TENANT RESOURCE CENTRE OUTER EAST

FUNDED BY THE CONSUMER AND BUSINESS AFFAIRS VICTORIA

LAY BY - YOUR RIGHTS AND RESPONSIBILITIES

Christmas decorations and advertisements have appeared in the shops already. Many consumers like to start early and put presents on lay-by. It has come to our attention that many traders and consumers are unaware of their rights and responsibilities when goods are sold under a lay-by contract.

Lay-by contracts are regulated under the Fair Trading Act 1999. Every lay-by contract must be clear and legible and in print at least 10 point in size. It must be signed by both the seller and the purchaser and contain the following details: · a full description of the goods · the price · the amount of deposit paid and the balance outstanding · when other payments are due · the amount of any cancellation fee or how that charge is to be calculated (must appear in bold writing and be reasonable)

A consumer can cancel a lay-by at any time, in writing, before the goods are delivered. The supplier must refund all money paid within 14 days, minus any cancellation charge. A consumer can challenge the fee if it appears to be unreasonable. If no cancellation fee is noted on the contract or the goods are delivered damaged then the supplier must refund all money paid. The supplier may cancel the contract if the consumer breaches the agreement. However, before cancellation occurs the supplier must inform the consumer of the breach and allow 14 days for rectification. The supplier can charge the cancellation fee if the breach isn't remedied and the charge is included on the contract.

GIFT VOUCHERS

Shoppers are warned to check the terms and conditions of gift vouchers before they purchase them this Christmas. Many shoppers buy a gift voucher thinking they can be used like cash, but unfortunately some discover that the vouchers contain time limits and restrictions on where and how they can be used.

Questions consumers should ask before buying gift vouchers this Christmas include: - Is there a time limit by which the value of the gift voucher must be redeemed? - Can the voucher be used at different stores and locations? - Will the holder be given change (or another voucher) if their purchase is less than the value stated on the voucher? - Are there any other restrictions on the use of the voucher?

Further problems arise if a store goes into liquidation, as the voucher-holder becomes just another unsecured creditor. Sadly, in some cases, people may be unable to redeem the value of their vouchers at all.

Many consumers had their fingers burnt a few years ago when Brashes went into liquidation. In that particular case, holders had to match the value of the voucher with cash. For example, if a consumer had a $50.00 voucher, they had to buy something worth $100.00 to redeem that stated value on the voucher.

Take those few minutes to check what the store's policy is and this may prevent disappointments.

TENANTS ON THE MOVE

With the introduction of the Government's First Home Buyer's Grant, the results have been far reaching. The desired affect has been achieved resulting in a very buoyant real estate market place. With the recent rise in property values more people, particularly investors, are selling their investment properties to realise their substantial profits.

This is all very well for the investor/home owner but the down side to this has been that tenant's security of tenure has become even more volatile. ABS statistics gathered in 2000 showed that 43% of tenants have moved 3 times or more in the previous 5 years, indicating a move on average every 20 months. Very few - 11% - had not moved in the previous 5 years. In the past 12 months these statistics may have changed.

At the Consumer and Tenant Resource Centre we have noticed a considerable increase in the number of queries from tenants about their rights when the Landlord is selling. We believe this is attributable to the boom in the real estate market. It is important to remember that tenants are entitled to privacy and quiet enjoyment of the rented property but with a property on the market this is sometimes hard to achieve. A rental property for sale always makes a tenant nervous - the not knowing if an investor will buy and keep them on or if they will have to vacate, yet again, is unsettling. Unfortunately many sales people are unfamiliar with or choose to ignore the Residential Tenancies Act, which requires 24hrs written notice of each and every visit. This often results in angry tenants because sales people are arriving with prospective purchasers with little or no notice. Remember that tenants are not expecting to gain anything from the sale of a property - unlike the landlord who is hoping to make a substantial capital gain.

At the Consumer and Tenant Resource Centre we suggest to tenants that when their property goes on the market to make contact with the selling agent and try and negotiate some guidelines for inspections, setting a couple of days in the week where only 1 hrs phone notice is required and possibly an open house once a week, and all other inspections with the required 24hrs written notice. If some mutual agreement can't be reached then the bottom line is the tenant can refuse entry to the sales person if the required 24hrs written notice is not given.

Compensation in the form of a rent reduction should be considered. If the tenant has lost their quiet enjoyment of the property and is also willing to negotiate inspections then it is only reasonable for them to expect compensation. We would suggest this be offered by the Estate Agent, which would lay the foundations for more mutually beneficial negotiations regarding inspections. At the end of the day, if compensation can't be negotiated then VCAT is the next step and in many instances these types of claims are looked at favourably.

The Landlord has everything to gain if they are considerate of the tenant and the interruption to their lives.

DON'T BE RASH….USE CASH THIS CHRISTMAS

Rudolph the in the red reindeer, Had a shiny credit card, And if you ever saw it, You would even say it glowed. Then just after Christmas Eve, The Credit man came to say, Rudolph with your card so bright, Pay your bill and you'll be right! Then all the other reindeers, Gathered 'round and laughed with glee, They had used cash and not credit, And they enjoyed their New Years Eve!

(Thank you to Consumer and Business Affairs for the above message).