Unit Titles Act 2010
It is universally accepted that a purchaser acquires not just a unit, but also membership of the body corporate when they purchase a unit title. The purchaser effectively acquires membership of the body corporate, which is like a club. The body corporate may pass operational rules, elect committee members and raise levies to administer the common property. Understanding that you (as a purchaser) are buying into a collective arrangement is important. As a purchaser it is important that you take time to understand how the body corporate operates and what the current issues associated with the unit/common property are.
Section 146 of the Unit Titles act sets out that before a buyer enters into an agreement for the sale and purchase of property, the vendor must provide a pre-contract disclosure statement. The statement must set out:
- What the current body corporate levy is;
- The period that the body corporate levy covers;
- The proposed maintenance for the year following settlement;
- The balance of every bank account, as at the date of the last financial statements;
- Whether the unit is or has been the subject of a claim under the Weathertight Homes Resolution Services Act (WHRS) 2006 or other civil proceedings relating to water penetration.
- An explanation of the unit title property ownership, unit plans, ownership and utility interests, body corporate operational rules and the cost of obtaining an additional disclosure statement.
Section 147 of the Unit Titles Act 2010 requires the vendor to provide a pre-settlement disclosure statement to the buyer no later than 5 working days before settlement. The statement must contain a certificate given by the body corporate certifying that the information in the statement is correct. The following information is required to be provided:
- The unit number;
- The current body corporate levies, the period of cover and when the payment is due;
- Whether any levy is unpaid;
- Whether there are any metered charges;
- Whether legal proceedings have been issued for any unpaid levy;
- Whether any repair costs for building elements or infrastructure contained in the unit are unpaid.
- Whether there are any proceedings pending against the body corporate;
- Whether there have been any changes to operational rules since the pre contract disclosure statement.
When disclosure is not made:
If disclosure is not made the purchaser may delay the settlement date pursuant to section 149 of the Unit Titles Act 2010. If a pre-settlement disclosure statement is not provided after the fifth working day before settlement, the purchaser may postpone the settlement date to the fifth working day after the date on which the disclosure statement was provided.
Alternatively, the purchaser may cancel the agreement pursuant to section 151 of the Unit Titles Act 2010 by giving 10 days’ notice in writing to the vendor.
If the vendor becomes aware that the information in the pre-contract or pre-settlement disclosure statement was inaccurate, the vendor must provide a statement correcting the statement within five working days. If the correction happens within five working days before settlement, the purchaser may postpone the settlement date until the fifth working day after the corrected statement was provided.