Apartment Sales in a Body Corporate

July 2022

Read Time: 6 Minutes

The Do’s and Don’ts of Selling in a Body Corporate

If you’re selling in a Body Corporate there are extra considerations to be made. Here’s everything you’ll need to know for a smooth property sale of your unit titled property.

What Documents Do I Need When Selling in a Body Corporate?

It’s important to ensure your paperwork is in order before selling your property in a Body Corporate. Make sure you have the following documents prepared:

  • A copy of the registered title of your property. Check that the names of the proprietor and mortgagors are correct, and your utility interest / unit entitlement is shown correctly. Your solicitor can help you with this.
  • Your Council LIM
  • Documents relating to the Administration of your Body Corporate
  • A pre-contract disclosure statement to provide to buyers before a sale and purchase agreement is signed.
    • The content of this statement is prescribed at section 146 of the Unit Titles Act, and it covers basic information about the unit and the development.
    • You can obtain the information and the template for this from your body corporate (a charge will apply), but you as the Vendor must sign it to confirm it is correct.
    • This portion of the Act has been amended to add to the information which must be provided, but the amendments don’t come into effect for a couple of years.

Once you have an unconditional sale & purchase arranged, and before you settle you will need to procure:

  • A pre-settlement disclosure statement to provide to the buyer when a sale and purchase agreement has been signed and before the transaction has settled.
    • This must be accompanied by a certificate provided by the Body Corporate certifying the information is correct.
    • This statement must be provided no later than the fifth working day before the settlement date.
    • Your body corporate manager will also charge for this additional service, and you need to give your manager at least 2 working days’ notice of the need for the statement.

What Body Corporate Information Do I Need to Provide?

While the section 146 pre-contract disclosure statement provides some information about the unit and the development, potential buyers will want to know as much as possible about the Body Corporate they’re buying into. You’ll need to be able to provide the following details:

  • Your Body Corporate's unit plan;
  • Your Body Corporate's operational rules;
  • Minutes of all meetings (including annual general meetings and any extraordinary general meetings) for the past three years;
  • Your Body Corporate's financial statements for the same period;
  • Your Body Corporate's budgets for the same period (these will usually be with the meeting minutes);
  • Your Body Corporate's long term maintenance plan (if it has one);
  • The most recent levy invoice & statement for your unit.

Read about How Decisions Are Made in a Body Corporate.

Is Marketing Different When Selling in a Body Corporate?

Yes, the marketing process is different when selling in a Body Corporate. While ‘For Sale’ signs are often used in the realty market, this is often not the case with Body Corporate properties. In most unit titled developments, the external building envelope or property where a ‘For Sale’ sign might be displayed is common property, and so body corporate rules control whether or not signage may be used. Additionally, running open homes within a secure complex requires much more co-ordination, and usually the attendance of at least two people while open homes are underway.

You must also be upfront with potential buyers about any restrictions that might impact on them, such as restrictions in your complex on pets.

Are there any “Don’ts” When Selling in a Body Corporate?

When selling in a Body Corporate, it’s important to remember:

  • Don’t hide information from your realty consultant or prospective purchasers. It’s not worth it – there are important disclosure obligations for vendors and you risk being sued for knowingly concealing relevant information.
  • Don’t skimp on good legal advice, or wait until you’ve signed a Sale & Purchase Agreement to get it. Good legal advice is always a great investment, and it’s important to check that your legal adviser is familiar with the Unit Titles Act.
  • Don’t hand out all your Body Corporate information to everyone who attends an open home. While the unit plan and Body Corporate rules are in the public domain, your Body Corporate’s minutes (and often, personal details contained in those minutes), financials and maintenance plan are not. Respect your neighbours, and only hand out this information to those with a serious interest in your property.
  • Don’t forget to seek permission from your body corporate for anything that impacts on the body corporate – like a pet approval for your purchaser, if that’s required.

How Can I Answer Questions About Weathertightness ?

Buyers often seek a guarantee that a unit in a Body Corporate is weather tight. Your Body Corporate Manager cannot provide such guarantees – it is up to you to provide your would-be purchaser with any Body Corporate minutes where such matters have been discussed. Please be aware though, that your body corporate manager’s duties do not include meeting with or providing information to prospective purchasers, or liaison with your real estate agent.

While a prospective purchaser needs to do their own due diligence, you as the vendor have a positive legal obligation to provide the purchaser with all relevant information, and not doing so can land you in a very expensive legal action.

If you're selling a unit in a complex with known or suspected structural or weathertightness issues, get good legal advice before entering the sales process. There are important issues to think about including disclosure and who bears responsibility for remedial levies. Failure to obtain good legal advice can prove very costly, even if you believe that your building is completely sound.

Of course prevention is always better than cure. Your best bet is to be part of a Body Corporate that places a high value on long-term maintenance.

Read about Healthy Homes in a Body Corporate.

How Can Crockers Help You?

Some real estate agents are more familiar with the subtleties of selling a property in a Body Corporate than others. It’s important that your agent understands the nature of your title, the obligations that come with it, and the specific requirements that apply to selling a property in a Body Corporate. The Crockers Realty team are experts in the special nature of Body Corporates and community titled properties.

While most properties that have a common ownership element are unit titled, not all are: other forms of title may also have communal funding requirements, such as an incorporated society to which owners of the property must also belong, or a cross lease syndicate which arranges for joint insurance of the building.

Crockers Realty Consultants are well versed in all the variations of a title. Inevitably, your Crockers Realty Consultant will need to obtain information from your Body Corporate Manager which cannot be released without your permission. To facilitate this, give your Body Corporate Manager written authorisation to communicate with your Crockers Realty Consultant. The alternative is for you to act as a go-between, which can be time consuming for you.

As part of our service, if your Body Corporate is with Crockers Body Corporate Management and you list with Crockers Realty, your due diligence pack containing information that prospective purchasers need to see is free of charge.

Our Consultants are licensed under the Real Estate Agents Act 2008 and are incredibly knowledgeable about the provisions of the Unit Titles Act. To make things easy, we will provide you with an ‘Approved Guide’ outlining the processes you need to follow when buying or selling a property.

You can find more information about your rights and responsibilities in the sales process at www.reaa.govt.nz or contact Crockers Realty on sales@crockers.co.nz.

 

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