Does the lawyer you are intending to engage to handle your conveyance have Body Corporate Law skills? Engage a law firm with Body Corporate law experience if you really want to be protected.

Key information, to determine what the go forward sinking fund body corporate levies may be, when you are considering purchasing a property in a community title development is:

• The Sinking Fund Forecast
• Minutes of Annual General Meetings and Extraordinary General Meetings of the Body Corporate for the last few years
• Minutes of Body Committee meetings for at least the last year

In my opinion it is best to get hold of this information before you indicate what you are prepared to pay for the property. Why? If significant sinking fund body corporate levies are coming this is going to have a downward effect on market value.

Once you have these documents what do you need to look at?

1. How up to date is the Sinking Fund Forecast?
2. Have major expenditure items in the Sinking Fund Forecast actually be carried out when scheduled by the forecast?
3. Has there been any additional recent major sink fund expenditure that was not forecast by the Sinking Fund Forecast?
4. Do the minutes hint at any other major work required on the building that is not allowed for in the Sinking Fund forecast?
5. Once these questions are answered you can start to make some estimates of what the sinking fund levies for the next few years may be.

This is an example of how practical our Property, Conveyancing and Body Corporate Lawyers are. We have lawyers with Body Corporate Law experience in both our Brisbane and Gold Coast offices.

More information: www.corneyandlind.com.au

Pazcuff Pty Ltd v Farmilo & Ors [2009] QSC 230

This recent Supreme Court decision (August of 2009) determined that the purchaser was able to terminate the contracts of sale as a result of the sellers’ failure to provide disclosure statements signed by the sellers (or person specifically authorised by the sellers to do so), before the contracts were entered into, as required under s 206 of the Body Corporate and Community Management Act 1997 (the Act).

s 206 of the Act provides:

• “(1) The seller of a lot included in a community titles scheme … must give a person (the buyer) who proposes to buy a lot, before the buyer enters into a contract to buy the lot, a disclosure statement.
• (2) …
• (3) The disclosure statement must be signed by the seller or a person authorised by the seller …”

The disclosure statements were simply not signed and provided to the purchaser with the executed contracts under cover of the seller’s solicitors letterhead.  The Court said that was not good enough under s206 of the Act.

Conveyancing is not simple. Much attention to detail is required and mistakes are very costly. Engaging our expert, experienced and careful Property Lawyers and Conveyancing Solicitors makes good sense.

If you are intending to purchase Queensland Community Title real estate these risks and the extra costs associated with them need to be considered as part of your Conveyancing due diligence. 

For Queensland Conveyancing, I generally recommend an additional special condition in Purchase contracts to allow say 14 days for an inspection of the Body Corporate Records which goes on to provide that if that the results of that inspection are not to your absolute satisfaction that you may terminate the contract and obtain a full refund of the deposit.

These costs are in addition to the budgeted administrative and sinking fund levies. For example:

• In Queensland at least, the possibility of a “contribution lot entitlement” adjustment application to seek to equalise these.
• Owners dragging their feet with payment of levies leading to frustration of maintenance or improvements and costly and time consuming body corporate debt recovery steps.
• Disputes within the Body Corporate over issues such as use of common property and pets resulting increases in levies.
• Does the Body Corporate have a Sinking Fund forecast and is it complying with it?

It makes good sense to speak with our Conveyancing Team before you sign a contract. Our Conveyancing Team deals with property right accross Queensland. We have offices in Brisbane and on the Gold Coast and so Brisbane Conveyancing and Gold Coast Conveyancing is particulalrly convienient if you want to come to our office. However, you do not need to come to our office and so whereever you are based, we can look after you.