Selling a Unit Title property
You must make certain disclosure statements to prospective buyers when you are selling an apartment or townhouse on a unit title.
Summary of important things to know
Apartments, townhouses, and other unit title properties are governed by the Unit Titles Act 2010.
Under the Act, you must provide specific disclosure statements before selling your property.
You need to give these statements to buyers even if you don’t have a functioning body corporate.
There can be consequences if this information isn’t shared with buyers.
What is a unit title?
Owning a unit title means you own a defined part of a complex (such as an apartment, a townhouse, a carpark, or storage space) and you share common areas like lifts, lobbies, or driveways with other owners.
The Unit Titles Act 2010 governs the development and management of unit title properties in New Zealand. Tenancy Services regulates and provides information on the Unit Titles Act 2010 on their website.
Disclosures you must make
Under the Unit Titles Act 2010, sellers must provide certain information to buyers when they are selling a unit title.
You’ll need to give buyers two signed disclosure statements at different stages of the process. Buyers can also ask for certain additional information you’ve both signed the sale and purchase agreement.
The disclosure statements help buyers understand what the body corporate does, who is responsible for running the property, the financial status of the property and the buyer’s rights and responsibilities when it comes to buying the property.
For more information, visit the Tenancy Services website here.
Pre-contract disclosure statement
You’ll need to give buyers a ‘pre-contract disclosure statement’ before signing a sale and purchase agreement. Talk to your lawyer or real estate agent about preparing the pre-contract disclosure statement. Having it ready to go before you start marketing your property will help prevent delays in the sale process. You’ll need to pay any costs involved in preparing the statement.
A pre-contract disclosure statement includes information about:
- unit title ownership
- the unit plan
- ownership and utility interests
- fees and levies
- funds held by the body corporate
- upcoming maintenance or building improvement plans
- any weather-tightness problems.
You can provide some of the information a buyer can request under the ‘additional disclosure statement’ in the pre-contract disclosure statement rather than waiting to see if the buyer asks for it.
Pre-settlement disclosure statement
After you accept an offer, and before settlement, you’ll need to provide a ‘pre-settlement disclosure statement’. This is typically certified by the body corporate confirming the information in the disclosure statement.
As the owner of the property, you must provide this information, and are responsible for making sure the information is correct. Talk to your lawyer about the implications of any information you provide.
A pre-settlement disclosure statement includes information about:
- the unit number and body corporate number
- the body corporate levy for that unit
- how the levy is paid and when
- whether any levies are outstanding and, if so, how much
- whether there are legal proceedings pending against the body corporate
- whether there have been any changes to the body corporate rules.
Contact your body corporate to get the information required for the disclosure statements. You can give the body corporate written authorisation to work with your lawyer so they can get this information on your behalf.
Additional disclosure statement
The purpose of the additional disclosure statement is for buyers to see body corporate records on maintenance, finances, insurance, contracting and governance. Because this information may affect their decision to buy the unit, they will most likely ask you for this before they sign a sale and purchase agreement.
Providing this information at the pre-contract disclosure stage will give you more time to resolve any concerns raised.
If there isn’t a functioning body corporate
All unit title properties, no matter how big or small, are governed by the Unit Titles Act 2010 and have a body corporate made up of the unit owners in the unit title property.
The disclosure statements must be given, even when selling a small unit title property, where there is no functioning body corporate.
If there isn’t a committee or nominated chairperson of the body corporate, all the unit owners will need to sign the disclosure statements.
Inform your tenants
If you’re selling a tenanted property, you must let the tenants know at the beginning of the process, so all parties are aware of their rights and responsibilities.
You can find more information on preparing a tenanted property for sale here.