02 DEC 2015
Queensland law requires a Disclosure Statement be attached to the Contract of Sale of any property that is part of a Body Corporate. While you may think this provides all the information you need on the Body Corporate, the statement doesn’t include everything a prospective buyer should be aware of before making an offer.
What’s in the Basic Disclosure Statement?
The Basic Disclosure Statement attached to the contract of sale will give you the following information:
- Whether there is a Body Corporate Manager or the Body Corporate is self managed;
- Whether there is a Committee or a Body Corporate Manager engaged to perform the functions of the Committee;
- What the current levies are;
- Whether there are any current (or proposed Special) levies;
- What the Assets of the Body Corporate are;
- Identify improvements on the common property for which the owner is responsible.
This Disclosure Statement provides only very basic information. There is more you need to know in order to be able to make an informed decision.
What does a Strata Report add?
The Disclosure Statement does not include the Implied Warranties owed by the Vendor. These warranties include any defects or “other liabilities” not disclosed in the contract, as well as a statement from the Vendor that there are no other circumstances in relation to the Body Corporate that will materially prejudice the Buyer. Some vendors will provide a separate Implied Warranties Statement, but this is not required by law, and many do not. A Strata Report will include this information.
The Strata Report will also include:
- Copies of Minutes of Meetings of the Body Corporate. These will give you an understanding of its operation and management – the last thing you want to be is in a poorly managed unit!;
- Copies of any recent Reports, such as on Workplace Health & Safety, pests, asbestos, and fire safety;
- Copy of the CMS (Community Management Statement) and Registered Plans. These will show any Exclusive Use areas pertinent to each of the Lots, and the By-laws of the Body Corporate. They will include things such as the Body Corporate’s attitude to Pets – you don’t want Brutus to have to be left at your old home when you move do you?;
- Details of any recent Adjudicator’s Orders and / or Court Orders that will affect the management of the Body Corporate;
- Financial Expenditure for the last 12 months;
- Any correspondence relevant to the Lot you are looking at;
- Details of recent approvals, such as Pool Safety, Fire Safety, and Certificate of Classification; and
- Whether the property was affected by the recent floods in Brisbane (for Brisbane properties).
These are important things to know if you are considering buying into a Body Corporate, as they affect the risks you take and the value you get from your financial commitment. The Strata Report will include all this information in a format that is easy to navigate, and you will be able to contact the report writer directly if you have any questions.