After years of consideration and debate, the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Act passed into law on 9 May 2022 and will be incorporated into the Unit Titles Act 2010. Most amendments will take effect on 9 May 2023, including one of the key sets of amendments, to the disclosure regime when units are bought and sold. The amendments to disclosure aim to improve the information provided to prospective buyers of units and will have implications for buyers, sellers, owners, developers and managers.

As a result, there will be a number of improvements to the pre-purchase disclosure regime, including:

  • Pre-contract disclosures require more complete details. With this the ability to request additional disclosures will be repealed (as the information that buyers were able to request at the buyer’s cost, are now required to be provided at the seller’s cost). The additional details include, for example, whether the body corporate is involved in any legal proceedings, the body corporate’s financial statements and audit reports, minutes of general meetings, the body corporate levies, details of insurances held by the body corporate and a copy of the long-term maintenance plan.
  • Broader parameters for buyers to delay or cancel settlement if pre-contract disclosure or pre-settlement disclosure are provided late, are incomplete, or not provided at all.
  • Separate requirements for pre-contract disclosure statements for “off-the-plan” units. The requirements acknowledge that much of the information to be provided may only be draft or estimated at that stage, however.

Disclosure information must be provided to the extent that it is capable of being provided. For example, the seller of a unit cannot be expected to provide annual general meeting minutes for the past 3 years if the body corporate has only existed for 2 years.

Sellers need to be fully aware of their disclosure obligations, and the potential consequences for sellers if inadequate pre-contract or pre-settlement disclosure is provided. However, the buyer cannot cancel if the seller has done what they can to provide a complete and accurate statement or if the information does not exist or if the missing or wrong information does not substantially alter the benefit or burden of the parties.

The changes to the disclosure regime take effect on 9 May 2023. Owners, developers and managers should prepare now, however, as they will need to be in a position to comply as soon as the Act comes into force.

If you are a buyer, seller, manager, developer or anyone else with an interest in anything relating to unit titles we can help you navigate these changes.