26 Sep Buyer Beware – New rules proposed for seller disclosure in strata
Buyer Beware – New rules proposed for seller disclosure in strata
New rules are proposed by QUT and the Queensland government for seller disclosure in a body corporate.
This Final Report presents the recommendations of the Commercial and Property Law Research Centre (Centre) formulated after consideration of submissions received in response to the Queensland Government Property Law Review Issues Paper – Seller Disclosure in Queensland (Issues Paper, released on 12 February 2014) and the Interim Report: Seller Disclosure in Queensland (Interim Report, released on 21 July 2016).
So what does this mean for a body corporate if these recommendations come into effect?
Under current laws:
A disclosure statement containing specified information to a prospective buyer must be supplied with your contract of sale. This is provided by the seller of the lot. A purchaser can currently request an information certificate prior to purchasing the lot which confirms any annual levies you will be required to pay and any outstanding amounts. The recipient of the information certificate is able to rely on it as conclusive evidence against the body corporate of matters contained in the certificate.
Most of the information contained in a disclosure statement and information certificate relate to the financial liability of a prospective buyer upon becoming the owner of the lot. Much of this information is unique to lots in a body corporate.
New Proposed laws:
A body corporate certificate must be supplied with your contract of sale. This is provided by the seller of the lot. This body corporate certificate combines the current disclosure statement and information certificate.
What’s proposed to be in a body corporate certificate?
The certificate should provide a buyer with lot-specific information related to levies, exclusive use and the sinking fund. It will also provide an opportunity to inform a buyer about key aspects of owning a lot in a body corporate.
The proposed form can be viewed here
The centre advises that the body corporate certificate provides an opportunity to inform a buyer about key aspects of the particular scheme and community titles schemes in general. The objective is to educate a buyer about what to expect particularly in relation to financial obligations and behavioural expectations.
First the Centre recommends a general statement to the effect that:
- the certificate contains important financial and other information about the operation of the body corporate and the buyer’s responsibilities as a lot owner;
- the buyer is entitled to rely upon the accuracy of this certificate in relation to the financial information;
- a buyer should undertake further inquiries with the body corporate to obtain all information about the lot and affairs of the body corporate.
The certificate should also provide:
- information about the obligation of lot owners to pay levies to the body corporate;
- information about how the levies are calculated;
- information about the obligation of a lot owner to comply with the bylaws for the scheme and examples of the types of behaviour that may be regulated by bylaws; and
- an explanation about rights in relation to common property.
For all the detail on the proposed changes you can read the full report
Have your say:
As always you can have your say on these important changes.
Written submissions are invited in response to the proposed statutory seller disclosure regime set out in this Final Report.
The closing date for submissions is 10 November 2017.
Where to send your submission
You may lodge your submission by email or post.
The email address for submissions is: email@example.com
Alternatively, you can post your submission to:
Property Law Review
C/- Strategic Policy
Department of Justice and Attorney-General
GPO Box 149 BRISBANE QLD 4001
These submissions will be considered by the Queensland Government in formulating a position on the Final Report’s recommendations.
Simon Barnard is the Managing Director and Principle of Hartley’s Body Corporate Management which is a medium sized strata firm established in 2004 at Sherwood and now operating out of Graceville, Newstead, North Lakes and Bribie Island.
Simon is in his 5th year as President of the Board of Strata Community Australia (QLD) and was recently recognised for his service to the industry with a fellowship of the organisation.
Simon also sits on the SCA National Board and is engaged at an International level through many consultative groups and associations.
He meets regularly with the Industry Stakeholders group which is convened by the Commissioner for Body Corporate and Community Management and the Office of the Attorney General and actively engages at all levels of government.
Simon has recently been invited to represent the Strata industry on the QLD Government Ministerial Housing Consultative Committee tasked with advising on developing and delivering quality housing outcomes for people and communities.
His contributions at an International, National and State level involve working with key stakeholders and government to ensure lot owners, industry employees, suppliers and Bodies Corporate needs are addressed through Government policy reform, education and training.