Apart­ment sell­ers have legal obligations

Kapi-Mana News - - NEWS/OPINION - ALANAL KNOWSLEYKN

If you own an apart­ment in a unit-ti­tled apart­ment block and are con­sid­er­ing sell­ing it, you need to know what your dis­clo­sure re­quire­ments are.

The dis­clo­sure re­quire­ments un­der the Unit Ti­tles Act 2010 al­low for three types of dis­clo­sure:

Pre- con­tract dis­clo­sure state­ment (com­pul­sory) – this is a state­ment that needs to be signed by the ven­dor be­fore an agree­ment for sale and pur­chase be­ing signed.

It in­cludes gen­eral in­for­ma­tion about unit ti­tles, as well as in­for­ma­tion spe­cific to your unit, in­clud­ing levies, any weath­er­tight­ness claims in re­la­tion to the unit or com­mon prop­erty, and amounts held in the Body Cor­por- ate’s var­i­ous ac­counts.

Pre- set­tle­ment dis­clo­sure state­ment (com­pul­sory) – this is is­sued by the Body Cor­po­rate within five work­ing days of set­tle­ment and shows the pe­riod levies are paid un­til, any amounts ow­ing to the Body Cor­po­rate etc. The Body Cor­po­rate or­gan­ises this.

Ad­di­tional dis­clo­sure state- ment (only at the re­quest of the pur­chaser and at the pur­chaser’s cost) – this state­ment records ad­di­tional in­for­ma­tion like con­tact de­tails for the Body Cor­po­rate com­mit­tee, con­tracts the Body Cor­po­rate has en­tered into etc.

If any­thing in the pre-con­tract dis­clo­sure state­ment changes be­tween the date you signed it and set­tle­ment (for ex­am­ple, if an an­nual meet­ing is held and new levies are set), you need to is­sue a cor­rect­ing state­ment.

If your apart­ment is not a unit ti­tle, do you still have to com­ply with the Unit Ti­tles Act dis­clo­sure re­quire­ments?

Only unit-ti­tled prop­er­ties are cov­ered by the Unit Ti­tles Act. Although less com­mon, there are apart­ments and townhouse com­plexes that are not unit ti­tled. They will gen­er­ally be com­pany share apart­ments, where a com­pany owns the land and build­ings and own­ers ac­quire shares in the com­pany rather than ti­tle to their apart­ment; or cross leases, where all own­ers ‘‘lease’’ their prop­erty from the other own­ers in the devel­op­ment.

When sell­ing a com­pany share apart­ment or a cross-leased prop­erty, the Unit Ti­tles Act does not ap­ply. That means there is no need for the dis­clo­sure re­quired un­der the Unit Ti­tles Act to be pro­vided.

There are still obligations on ven­dors sell­ing th­ese prop­er­ties to dis­close any de­fects or is­sues with the prop­erty, re­gard­less of what sort of prop­erty it is, but the spe­cific dis­clo­sure obligations from the Unit Ti­tles Act don’t ap­ply. Your legal ad­viser can help you through the process to make sure you, and the Body Cor­po­rate, meet your obligations.

If you are buy­ing a prop­erty, it is a good idea to get ad­vice be­fore you sign up. This is es­pe­cially so with apart­ments, be­cause of the ex­tra obligations on you as a unit owner.

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