Anyone selling a unit has to abide by a strict set of new information rules since August 1. Picture: Tourism and Events Queensland.
Buyers of lots in community title schemes will no longer fear being ambushed by unknown fees and outstanding debts following new seller disclosure requirements from August 1.
Under the changes, bodies corporate must provide the seller, upon request and a fee, with a body corporate certificate (BCC).
In addition, bodies corporate must supply a Community Management Statement (CMS) which confirms the name of the body corporate and the regulation module that applies.
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Luxury waterfront apartments in a complex on the Gold Coast, Australia.
The CMS usually contains the registered by-laws, including those that grant exclusive use to lots within the scheme.
The heralded improvements will enhance transparency, consistency, and efficiency within Queensland’s community titles sector.
They will also empower buyers who will have greater upfront knowledge of the lot they want to purchase in a community titles scheme.
The BCC is a 10-page document that contains basic as well as intricate information relating to the lot being put up for sale.
The information includes how to contact the body corporate, accessing records and the regulation module (accommodation, commercial, smalls schemes or standard) that applies to the scheme.
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BCCM Commissioner Jane Wilson.
It will also provide financial information such as levies, insurance coverage and, more importantly, if there are any outstanding contributions or body corporate debts associated with the lot.
There have been many new owners in the past who claimed to have been blindsided by outstanding debts associated with their purchase.
If they had that information beforehand, they may have been able to negotiate the price down to compensate for the outstanding debt.
The new disclosure requirements will allow prospective owners to factor in outstanding debts before making an offer to buy.
Be mindful that even though the BCC contains vital information that could put a buyer at ease, it is not a silver bullet.
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Buyers still should conduct body corporate searches through a conveyancer for items not included in the BCC.
There are still reasons for the buyer to conduct body corporate searches through their conveyancer.
For instance, the BCC does not include information regarding:
- building defects
- body corporate expenses and liabilities
- past, present or future body corporate disputes
- court actions or orders made against the body corporate by an adjudicator, a tribunal or a court.
The 10-page BCC has been available for download from early July. It allows bodies corporate to familiarise themselves with the information required which came into effect on August 1.
It is incumbent on the seller to provide the BCC and CMS to the real estate agent when the property is listed for sale.
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The BCC is an ongoing document Ms Wilson says so only needs to be compiled once, and updated when amended by-laws are passed.
For bodies corporate, a lot of the information in a BCC will only need to be compiled once as it is an ongoing document.
It will only need to be updated when changes such as amended by-laws are passed.
The CMS has two schedules of lot entitlements – the Interest Schedule Lot Entitlements and the Contribution Schedule Lot Entitlements.
These two schedules determine how the running costs for the administration, maintenance and insurance of common property, and the cost of utility services (water/electricity), are shared between lot owners.
This will provide additional transparency on the costs and how they calculated for each lot.
To find out more about buying a body corporate property use this link.
* Jane Wilson is the Queensland Commissioner for Body Corporate and Community Management.
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