Since the beginning of 2018, we have had various enquires regarding the status of the amendments to the Unit Titles Act that had been expected to come into force in August 2017. With a change of government this has not yet occurred. Presently there are submissions for public review, and there are some thoughtful submissions to read, if you are interested. Scope Strata also provided a submission to the Ministry of Business, Innovation & Employment as part of this process.
Among others, there are proposed changes around disclosure requirements when buying or selling a unit title property. It is expected that disclosure statements (the legal document provided by vendors to prospective purchasers) will provide greater transparency and include body corporate meeting minutes, financial reports, and general governance matters. This should give purchasers a greater level of confidence when purchasing a unit title 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 (LTMP), 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 their LTMP. 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 LTMP 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 property’s body corporate management company should be readily available to provide information to the unit owner and to assist with any questions that a purchaser may have.
As always Scope Strata welcomes any questions that you may have on unit title property. Please feel free to call us to assist you further.