The first quarter of 2017 has been a busy one for unit title properties. In March, public submissions closed on the government review of the Unit Titles Act 2010. The review is wide ranging, covering a variety of areas of current legislation and seeking to make improvements to the existing act (the previous review included very minor changes). The government has indicated that any changes will come into force from August 2017.
Of importance to purchasers of apartments are proposed changes around disclosure requirements when buying a unit title property. It is expected that disclosure statements (the legal document provided to owners when buying a unit) will provide greater transparency and include meeting minutes, financial reports and general governance matters. This should give purchasers a greater level of confidence when purchasing such a property.
Also under review is the on-going consideration of maintenance. Under the Unit Titles Act 2010, the body corporate is obliged to obtain a long-term maintenance plan, which must be updated every three years. The body corporate, however, has the option of choosing whether or not to fund the plan, and to what level.
Proposed changes may oblige owners to fully fund the projected costs included in the long-term maintenance plan. While many unit title properties do currently raise, and hold, funds for long-term maintenance, the changes proposed may increase the number of levies needing to be collected. We would suggest to prospective purchasers that they sight the long-term maintenance plan when considering buying into a property. This would give them an indication of how much funding may be required in the future. A comparison can then be done against what is currently included in the body corporate budget and current funds held.
We would always recommend that, if you intend to buy into a unit title property, you obtain as much information as possible before committing to the purchase. The body corporate management company should be readily available to provide information to the unit owner and to assist with any questions that you may have.