Misleading information in the SDA market
The NDIA is aware of misleading and deceptive advertising in the SDA market.
Some examples of problematic advertising include:
- Guaranteed return on investment or profitability
- Guaranteed occupancy
- SDA properties are more secure investments than other types of investments (i.e. recession proof investment, guaranteed income, etc.)
- SDA properties having secure government funding or are ‘government-backed’.
These types of claims may be false or misleading. Investment in SDA carries risk like any other investment and profitability depends on many factors including:
- Income from an SDA dwelling is not guaranteed as the property may be unoccupied or partially occupied for periods of time. Funding for SDA applies to the participant(s) NDIS Plan and not the dwelling and as such cannot be guaranteed.
- The NDIA is not involved with day-to-day management of SDA dwellings. Investors enter an arrangement with an SDA provider to find occupants and manage operations and transactions relating to the property.
- Enrolment of the dwelling as SDA can only happen once the enrolment requirements have been met and on completion of building.
- Whether a participant’s plan includes SDA, and how much SDA funding is included in the plan will depend on the participant’s individual circumstances and disability support needs.
- NDIS participants have choice and control over their housing and occupancy of a property depends on individual requirements. It is important to be aware that:
- the dwelling type may not meet individual NDIS participant requirements given its location, design and the quality of the dwelling
- a dwelling with multiple rooms may not attract multiple NDIS participants to reach full occupancy
- demand will vary in different geographic locations.
We continue to work collaboratively with the Australian Competition and Consumer Commission (ACCC), Australian Securities and Investments Commission (ASIC) and the NDIS Quality and Safeguards Commission (NQSC), as required to address any concerning market behaviours and act against those advertisers.
Advertising a dwelling as SDA
We have observed increases in advertisements promoting dwellings as SDA before their enrolment by the NDIA.
A dwelling is not considered an ‘enrolled SDA dwelling’ until:
- the dwelling is fully built and complete, and
- the NDIA approves the application to enrol the dwelling as SDA.
Any representation of a dwelling as an ‘enrolled SDA dwelling’ prior to this approval should be approached with care.
NDIS logo guidelines
The NDIA is responsible for maintaining the integrity of the NDIS and its brand.
Refer to the NDIS logo guidelines to ensure correct usage.
Contracts for building and managing SDA dwellings
When considering entering a contract for an SDA dwelling, you should read and understand the terms of the agreement. This includes any terms that may be unfair. Investors should seek independent advice before entering into an agreement.
Under the Australian Consumer Law, unfair contract terms are prohibited in standard form consumer and small business agreements. A term may be considered unfair if:
- it would cause a significant imbalance in the parties' rights and obligations arising under the contract ;
- it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term
- it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.
Investors should be cautious of any terms in an agreement that allow:
- for properties to be unoccupied or not occupied to capacity for long periods of time, without a right to terminate the agreement
- the SDA provider has wide discretion to change the terms of the agreement
- SDA providers have wide discretion to charge for goods or services relating to management or limits your ability to dispute charges
- SDA providers are able to acquire goods or services from related companies, without the consent of the investor
- an SDA provider to unnecessarily limit their liability for loss or damage to the property.
Seeking independent advice and resolving issues
When you are considering SDA investment, it is important to seek independent legal and financial advice before entering a commercial contract. Given the commercial nature of these contracts, other Government Agencies may also be able to assist you to resolve disputes arising under the contract.
Australian Competition and Consumer Commission
The Australian Competition and Consumer Commission (ACCC) is Australia’s competition, consumer, fair trading and product safety regulator. The ACCC accepts reports of consumer issues and provides information on the Australian Consumer Law including:
You can contact the ACCC on 1300 302 502 or make an enquiry .
Australian Securities & Investment Commission
The Australian Securities & Investments Commission (ASIC) is Australia's integrated corporate, markets, financial services, and consumer credit regulator.
Moneysmart is one way to identify any concerning behaviours within the market and is led by ASIC.
As a prospective investor in SDA, it is recommended that you engage with Moneysmart before making major financial decisions.
Moneysmart provides useful information for people considering making investment decisions including:
You can contact ASIC on 1300 300 630 or lodge a report .
National Disability Insurance Scheme Quality and Safeguards Commission
The NDIS Quality and Safeguards Commission registers and regulates NDIS providers. It was established to help uphold the integrity of the NDIS by ensuring providers adhere to the relevant codes of conduct and National Disability Insurance Scheme Act 2013 provisions.
As an SDA investor, you must either be an SDA registered provider or enter into an agreement with an SDA registered provider. When engaging with an SDA registered provider, it is important to know their obligations.
You can find more information about the NDIS Code of Conduct for NDIS registered providers via the NDIS Quality & Safeguards Commission website.
You can contact the Commission on 1800 035 544 or email.
Fraud
The NDIA and Australian Government are taking stronger measures to find and stop fraud and serious organised crime in the NDIS and other government programs.
Fraud is illegal and we have zero tolerance for anyone attempting to exploit the NDIS. Individuals or organisations found to be engaging in fraudulent activity will be removed from participation in the NDIS and may be referred to law enforcement agencies for investigation.
We are committed to protecting all NDIS participants’ safety and wellbeing and safeguarding the integrity of the NDIS.
All suspicious and fraudulent practices in the SDA market should be reported to us.
Disclaimer
This information has been developed jointly by the National Disability Insurance Agency (NDIA), the Australian Competition and Consumer Commission (ACCC), the Australian Securities and Investments Commission (ASIC) and the National Disability Insurance Scheme (NDIS) Quality and Safeguards Commission (NQSC) (the Contributing Authors) and released by the NDIA to provide general information only.
While this information has been prepared in good faith based on information currently available, the information may change, is not advice and should not be relied on for any act or failure to act.
The Contributing Authors are not responsible for the accuracy or completeness of this information and do not accept any liability in tort (including negligence), or for any other common law, equitable or statutory cause of action for any loss, damage, cost or expense suffered as a result of a person’s use of or reliance on any of the information.
Before making any decision using this information, a person should carefully evaluate the accuracy, currency, completeness and relevance of the information to their particular situation and should obtain appropriate independent professional advice.
