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.
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:
Pre-contract disclosure statement
You’ll need to give buyers a ‘pre-contract disclosure statement’ before signing a sale and purchase agreement. There are two types of pre-contract disclosure statements. One is for existing unit sales, and the other is for off-the-plans sales.
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 for an existing unit includes information about:
- weather tightness issues
- the body corporate’s financial statements and audit reports
- minutes of general meetings
- whether the body corporate is involved in any legal proceedings
- fees and levies
- upcoming maintenance or building improvement plans.
A pre-contract disclosure statement for an off-the-plans sale includes the following information, which is different to the sale of an existing title:
- summary budget
- proposed ownership interests
- estimated utility interests
- details of proposed service contracts (if any)
- draft operational rules (if any).
Pre-settlement disclosure statement
After you accept an offer, and before settlement, you’ll also need to provide a ‘pre-settlement disclosure statement’. This is typically certified by the body corporate confirming the information in the disclosure statement is correct.
As with pre-contract disclosure statements, there are also differences between what must be included in a pre-settlement disclosure statement for an existing unit sale, and one for an off-the-plans sale.
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 for a sale of an existing unit 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
- the interest rate on any money owing to the body corporate by the vendor
- whether any metered charges due to the body corporate are unpaid, and if so, the amount owed
- whether there are legal proceedings pending against the body corporate
- whether there have been any changes to the body corporate rules since the pre-contract disclosure statement was provided.
A pre-settlement disclosure statement for an off-the-plans unit sale must include:
- the above information required for an existing unit to the extent that it can be provided
- name and contact details of the body corporate manager (if there is one)
- insurance information that was required in the pre-contract disclosure statement for an existing unit
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 or real estate agent so they can get this information on your behalf.
Consequences for failing to provide pre-contract disclosure statement or pre-settlement disclosure statement
If you fail to provide complete and accurate pre-contract or pre-settlement disclosure statements, a buyer can cancel the sale and purchase agreement entirely. Or they can have settlement delayed until complete and accurate statements are provided.