Disclosure Statement & Body Corporates in QLD
Buying a real property is an important decision that involves a lot of paperwork and legal requirements. In Queensland, one of the legal requirements for purchasing a lot in a community title scheme is the disclosure statement. This statement contains information about the lot being purchased and the body corporate, and it is mandatory for the Seller to provide it to the Buyer before entering into a contract. This article explains the minimum information required in the statement and the role of the body corporate in a community title scheme.
The Disclosure Statement in Queensland
In Queensland, it is a legal requirement for a Seller to provide a disclosure statement to the Buyer before entering into a contract for a lot in a community title scheme. The statement contains important information about the lot being purchased and the body corporate. The following are the minimum information required in the statement:
• Current Levies for the Lot: The disclosure statement must include the current levies for the lot, which are the fees paid by the lot owner for the maintenance of common property and body corporate assets. The levies may vary depending on the size and location of the lot and the amenities provided by the body corporate.
• Real Property Description of the Lot: The disclosure statement must also include a real property description of the lot, which is a detailed description of the boundaries, zoning, area, and dimensions of the lot. The description must be accurate and match the title of the lot.
• Contact Details of the Body Corporate Secretary and Strata Manager: The disclosure statement must include the contact details of the body corporate Secretary and Strata Manager, who are responsible for the administration of the body corporate and the management of common property and body corporate assets. The contact details must include the name, address, phone number, and email address of both the Secretary and the Strata Manager.
The disclosure statement is usually created by the body corporate manager, who is a professional appointed by the body corporate to manage its affairs. The manager may charge a fee for creating the statement, which is usually paid by the Seller. The Buyer has the right to ask for a copy of the disclosure statement before entering into a contract and should carefully review the information contained in it.
The Role of the Body Corporate in a Community Title Scheme
The body corporate is a legal entity established when property is subdivided and registered as a community titles scheme. Its role is to administer common property and body corporate assets for the benefit of all owners and undertake functions required under body corporate legislation. The body corporate is responsible for the following:
• Management of Common Property: The body corporate is responsible for the management and maintenance of common property, which is the land and buildings owned jointly by all lot owners. Common property may include swimming pools, gardens, driveways, and lifts, among others. The body corporate is responsible for ensuring that the common property is well-maintained and safe for use by all lot owners.
• Management of Body Corporate Assets: The body corporate is also responsible for the management of body corporate assets, which are the assets owned by the body corporate, such as equipment, furniture, and tools. The body corporate must keep an inventory of its assets and ensure that they are properly maintained and used for the benefit of all lot owners.
• Collection of Levies: The body corporate is responsible for collecting levies and contributions from lot owners, which are used to fund the ongoing maintenance and upkeep of the common property and assets. These levies and contributions are typically based on the lot owner’s proportionate share of the total value of the scheme.
• Preparing financial statements and budgets: The body corporate is required to prepare and maintain accurate financial statements and budgets, which provide lot owners with an overview of the financial performance of the scheme. This includes details of income and expenditure, reserves, and future financial plans.
• Organizing insurance for the scheme: The body corporate is responsible for organizing insurance coverage for the common property and assets, as well as any liability insurance required for the scheme. This is important to ensure that the scheme is adequately protected in the event of any damage or other issues.
• Resolving disputes between lot owners: The body corporate is responsible for resolving disputes between lot owners, which can arise from a range of issues such as noise complaints, parking disputes, or issues related to the use of common property. This is typically done through the body corporate committee, which is made up of elected members who are responsible for making decisions on behalf of the scheme.
• Undertaking repairs and maintenance to common property and assets: The body corporate is responsible for undertaking repairs and maintenance to the common property and assets, which can include things like cleaning, gardening, painting, and repairs to buildings or other infrastructure. This is important to ensure that the scheme remains well-maintained and attractive to potential buyers or tenants.
What should a buyer know about Body Corproates before entering into a contract of sale?
Before entering into a contract of sale for a property that is part of a body corporate, a buyer should be aware of the following key considerations:
Body corporate fees: The buyer should be aware of the ongoing fees associated with owning a property in a body corporate, including annual fees, special levies, and other charges. These fees can vary depending on the size of the property and the facilities provided by the body corporate.
Rules and regulations: The buyer should review the rules and regulations of the body corporate to ensure that they are comfortable with the restrictions and requirements that may be imposed on them as an owner of the property.
Maintenance and repairs: The buyer should understand their obligations in relation to maintaining and repairing their property, as well as the common areas and facilities provided by the body corporate.
Dispute resolution: The buyer should be aware of the processes for resolving disputes with the body corporate or other owners, including mediation or arbitration.
Insurance: The buyer should ensure that they have adequate insurance coverage for their property, including public liability and building insurance (including flood coverage), as well as any additional insurance required by the body corporate.
By understanding these key considerations, a buyer can make an informed decision about whether a property that is part of a body corporate is a suitable investment and asset for them. It is also important to engage a qualified and experienced conveyancer or lawyer to assist with the conveyancing process and to provide advice on any legal requirements or obligations associated with owning a property in a body corporate.
What should a vendor know about Body Corproates before advertising their property to sell?
Before advertising their property for sale, a seller who owns a property that is part of a body corporate should be aware of the following key considerations:
Disclosure requirements: The seller must disclose all relevant information about the body corporate to potential buyers, including the annual fees, any special levies, the rules and regulations, and any pending disputes or legal proceedings involving the body corporate.
Maintenance and repairs: The seller should ensure that their property is properly maintained and repaired, as well as any common areas and facilities provided by the body corporate. Any outstanding maintenance or repair issues may impact the value of the property and deter potential buyers.
Compliance with rules and regulations: The seller should ensure that they are complying with all rules and regulations of the body corporate, including any restrictions on alterations or modifications to the property.
Financial records: The seller should ensure that all financial records of the body corporate are up-to-date and accurate, and that any outstanding debts or liabilities are paid before the sale of the property.
Dispute resolution: The seller should be aware of any disputes with the body corporate or other owners and take steps to resolve these before selling the property.
By being aware of these key considerations, a seller can ensure that they comply with their legal obligations, provide full disclosure to potential buyers, and maximise the value of their property. It is also important to engage a qualified and experienced conveyancer or lawyer to assist with the conveyancing process and to provide advice on any legal requirements or obligations associated with selling a property that is part of a body corporate.
FAQs
Q: What is a community title scheme?
A: A community title scheme is a development where individual lots are owned privately, but there are common areas and shared facilities that are collectively owned and maintained by a body corporate.
Q: What is a body corporate?
A: A body corporate is a legal entity that is established when property is subdivided and registered as a community title scheme. Its role is to administer common property and body corporate assets for the benefit of all owners and undertake functions required under body corporate legislation.
Q: What is a disclosure statement?
A: A disclosure statement is a document that a seller must provide to a buyer before entering into a contract for a lot in a community title scheme. The statement contains information about the lot being purchased and the body corporate, including the current levies for the lot, a real property description of the lot, and contact details of the body corporate Secretary and Strata Manager.
Q: Can a buyer waive their right to a disclosure statement?
A: No, a buyer cannot waive their right to a disclosure statement. It is a legal requirement in Queensland for a seller to provide a disclosure statement to the buyer before entering into a contract for a lot in a community title scheme.
Q: Who is responsible for maintaining common property in a community title scheme?
A: The body corporate is responsible for maintaining and repairing common property in a community title scheme. This includes shared facilities such as pools, gardens, and car parks.
Q: Can a lot owner be held responsible for common property maintenance?
A: No, individual lot owners cannot be held responsible for common property maintenance. This is the responsibility of the body corporate, which is funded through levies and contributions collected from lot owners.
Q: What happens if there is a dispute between lot owners in a community title scheme?
A: The body corporate is responsible for resolving disputes between lot owners in a community title scheme. This can include disputes over common property maintenance, noise complaints, and other issues that affect the community.
Q: Can a lot owner be a member of the body corporate committee?
A: Yes, lot owners are eligible to be elected to the body corporate committee at the annual general meeting (AGM). The committee is responsible for making decisions on behalf of the body corporate, including approving budgets, setting levies, and managing common property.
Q. Can a house be apart of a body corporate?
A. Yes, a house can be part of a body corporate if it is part of a community titles scheme.
Q .Do commercial body corporates have the same laws as residential body corporate?
A. Commercial body corporates are generally governed by the same laws and regulations as residential body corporates under the relevant state or territory legislation.
Q. How does the body corporate know the change of ownership has occurred in QLD?
A. In Queensland, when a property that is part of a body corporate is sold, the body corporate is notified of the change of ownership through a process called “change of ownership registration”. This involves lodging a Form 24 with the Queensland Titles Registry, which notifies the body corporate of the change of ownership. A BCCM form 8 is usually sent on behalf of the buyer to the Body corporate. Click here to access this form.
In Queensland, it is a legal requirement for a Seller to provide a disclosure statement to the Buyer before entering into a contract for a lot in a community title scheme. The body corporate plays an important role in administering the common property and assets of the scheme, and is responsible for a range of tasks including collecting levies and contributions, preparing financial statements and budgets, organizing insurance, resolving disputes between lot owners, and undertaking repairs and maintenance to common property and assets. It is important for lot owners to understand their rights and responsibilities, and to work together with the body corporate to ensure that the scheme remains well-maintained and attractive to potential buyers or tenants.
This is general advice only, for specific legal advice please contact your expert legal representative or solicitor.
