On 20 June, the Unit Titles Regulations 2011 came into force. As is not uncommon with “consumer protection” type legislation, a scheme that is designed to protect members of the public imposes considerable obligations on persons involved.
There can be no doubt that the legislation regulating the operation of properties with Unit Titles needed substantial improvement. The review process has taken many years and there has been considerable consultation. There appears to be general consensus that the new Unit Titles Act has considerably improved the law controlling the administration of Unit Titles. There are now however quite a number of additional obligations imposed on parties involved with Unit Title properties.
Some of these obligations are imposed on any vendor of a Unit Title property. Any failure to comply with these requirements could have serious consequences.
A vendor is now obliged to make a pre contract disclosure before any sale agreement is entered into. Not only that, a buyer may require additional disclosure which must be provided within five working days. Then the vendor is obliged to make a further disclosure or pre settlement disclosure no later than five working days before settlement. If the additional disclosure of the pre settlement disclosure is not made at the required time, the purchaser is likely to be able to postpone settlement. Also, if some of the required information is inaccurate, the vendor may need to correct the disclosure information and again the purchaser may be entitled to delay settlement. Perhaps even worse, if the required disclosures are not made the purchaser may be entitled to cancel the agreement. The pre settlement disclosure is likely to require information to be confirmed by the body corporate of the building complex so may not be able to be prepared quickly.
Much of the information that is required to be disclosed is information that any prudent purchaser of a Unit Title property would have required or ascertained in any event before the new regulations came into force, so to some extent one needs to question whether the rules needed to be this onerous. There are also likely to be situations where the vendor is unable to readily ascertain all the information. If the sale is wanted urgently by both parties there may be difficulty in complying with the time limits.
What is apparent is that any owner of a Unit Title property who is thinking of selling the unit should take advice at an early stage to ensure that all the required information is likely to be available at the appropriate time.