When buying a unit title apartment, there are a few extra things you need to know before you make a decision.
Understand your responsibilities
Firstly, make sure you understand a unit owner’s responsibilities under the Unit Titles Act 2010. You can read more about these rules and responsibilities HERE. Do your research; gather information about the unit, the whole apartment building and body corporate before you commit. This includes weathertightness and earthquake strength considerations. Most of this information is contained in body corporate meeting minutes. You should look to obtain and assess the last 3 years of minutes, along with financial statements, long-term maintenance plan and any resolutions passed by the body corporate over that time.
Body corporate membership
When you buy a unit title, you become a member of the body corporate. The body corporate has its own set of rules, which you should review before purchase, as there may be some restrictions with regard to pets, short-term rental e.g. Airbnb, or even restrictions on materials used within your unit. In addition to your rates to the local and regional councils, you will have to pay body corporate levies which cover the maintenance of common property, as well as costs such as building insurance.
Under the Unit Titles Act 2010, sellers are required to provide a lot more information to prospective buyers. The information contained in the disclosure statements is intended to help provide buyers with information that can assist in their purchase decision. There are three types of disclosure statements. The first two: Pre-Contract Disclosure & Pre-Settlement Disclosure are MANDATORY.
Pre-contract disclosure statement
The seller must provide this statement to their real estate agent at the time of listing. This statement contains general information about unit title ownership, as well as specific details such as the levy amount for the unit, any upcoming maintenance, funds held by the body corporate, and whether the unit or common property has had any weathertightness problems.
Pre-settlement disclosure statement
The seller must provide this statement after entering into an unconditional agreement for sale and purchase, by no later than the fifth working day before the settlement date. This statement is usually organised through the seller’s solicitor and must provide the buyer a summary of the current fees and charges relating to the unit, whether there are any proceedings pending against the body corporate and whether there have been any changes to the body corporate operational rules. This comes in two parts, the statement and then a certificate. The statement must be signed by the owner and the certificate by the body corporate. The Act allows the buyer to delay settlement or cancel the sale if this is not provided on time.
Additional Disclosure Statement
The purpose of the additional disclosure statement is to provide body corporate records on maintenance, finances, insurance, contracting and governance. The seller must provide this statement at the request of the buyer, and the buyer must pay all reasonable costs associated. A buyer can request an additional disclosure statement at any time before the earlier of:
the fifth working day after the date the agreement for sale and purchase was entered; or
the tenth working day before the settlement date. If a buyer makes a request, the seller must provide the additional disclosure statement to the buyer within 5 working days of receiving the request.
If you have any questions or concerns about buying a unit title apartment, don’t hesitate to get in touch.