Are you considering buying or selling a unit title property?
We can help guide you through the process — Contact NZ unit titles expert, Jennifer Edwards today to set up an appointment.
2 January, 2020 | Jennifer Edwards
A unit title development (“Unit Title”) is typically a multi storied apartment building, hotel or office tower. A Unit Title property can be either residential or commercial, or a mix of both.
The Unit Titles Act 2010 (the “Act”) came into force in June 2011 and was a major overhaul of the previous Unit Titles Act 1972. The Act introduced new disclosure requirements which affect all existing owners, potential purchasers and potential sellers of a unit in a Unit Title (also known as a “strata title” or “stratum estate”) which are all required to have what is called a Body Corporate.
The Act provides that the seller must provide certain information relating to the property to the purchaser before they enter into the agreement, after they’ve entered into the agreement (if requested) and before settlement. That information is known as:
Pre contract disclosure
Pre contract disclosure information includes (but is not limited to) information on the property such as the unit number, plan number, what a body corporate is, details of the body corporate rules and information on the title. The pre-contract disclosure information must be in the prescribed form set out in the Unit Title Regulations.
Additional disclosure information (if requested by the purchaser) could include (but is not limited to) the address of the body corporate and body corporate committee members, details of any contracts the body corporate may have entered into and details of any maintenance plan. A purchaser must specifically request additional disclosure information within a certain time period after entering into the agreement. There is no prescribed form for the additional disclosure information.
There is no prescribed form for the pre-settlement disclosure information however there is information that must be provided including (but is not limited to): the annual levy payable by the unit owner, the period covered by the levy, when the levy must be paid by, whether there are any legal proceedings pending against the body corporate, whether there have been any amendments to the body corporate rules. Generally the unit owner will complete the information that they have available to them and the body corporate will complete that information and certify that it is correct.
Consequences of not providing disclosure
The disclosure provisions of the Act cannot be contracted out of and the consequences for a vendor should they not comply with the additional disclosure and/or pre-settlement disclosure requirements are that a contract could be void or voidable by the purchaser. These disclosure requirements are also set out in the latest version of the Real Estate Institute and Auckland District Law Society Agreement for Sale and Purchase.
Notes for purchasers
If you are a purchaser, before you enter into an Agreement for Sale and Purchase for the purchase of a unit title property we recommend that you contact us to ensure your entitlements with respect to disclosure have been met.
Notes for vendors
If you are a vendor selling a unit title property then you should talk to us and your real estate agent about your disclosure requirement obligations, in particular the pre-contract disclosure requirements, before you sign the contract.
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