Body Corporate issues when buying or selling - what you must do

This is a brief summary of what buyers and sellers must do during a sale transaction related to Body Corporate matters.

Vendor’s responsibility to provide disclosure
Owners often ask Capitol Body Corporate to prepare information for a Disclosure Statement, as this document must be included in any contract for the sale of a lot in a community scheme. Capitol can provide this information within 24 hours of the request and payment being made. A request form is available either on our website or by calling our office. This document is the responsibility of the vendor to supply.

The information for the Disclosure Statement details various pieces of information including the following:

Name of Scheme, CTS number, Lot number and Plan number
The Secretary’s name
The Body Corporate Manager’s name and contact details
Administrative Fund and Sinking Fund levies that have been determined by the Body Corporate for this lot for the current financial year and any that have been approved for the next financial year
Any additional special levies or insurance fund levies approved by the Body Corporate
Body Corporate assets required to be recorded – those with a value over $1,000
The total amount of the Interest Schedule Lot Entitlements and the Contribution Schedule Lot Entitlements and the number that has been allocated to this lot. This is important information, as the proportion of levies allocated to each lot is determined by these amounts.
The balance of the Sinking Fund as at the end of the last financial year.
Details of the Body Corporate’s insurances

As you can see, considerable information is available to purchasers and they can get a very good picture of what financial and administrative state the Body Corporate is in.

Purchaser’s responsibility
When the purchaser signs a contract and moves towards settlement, the purchaser’s lawyer should carry out a search of the Body Corporate, by requesting an Information Certificate (BCCM Form 13). This document is the responsibility of the purchaser to arrange and pay for, and is extremely important as it provides the purchaser with information regarding the amount owing by the vendor to the Body Corporate.

The purchaser’s lawyer then uses this information to calculate any adjustments at the time of settlement, so that the vendor pays for all Body Corporate debts before the settlement takes place. If this adjustment and payment of any debts is not made at settlement to the Body Corporate, the debt is passed on to the new owner of the lot. That is why this document is so important to obtain before settlement.

The certificate actually refers to this on the front page as follows:

Section 205(5) of the Act provides that the person obtaining this certificate may rely on it against the body corporate as conclusive evidence of the matters stated, except for errors reasonably apparent. The Body Corporate and Community Management Regulation provides that a new owner becomes jointly and severally liable for any contribution, instalment, penalty or other amount payable to the body corporate that is due but unpaid when they become the owner.

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