When you’re selling an apartment, unit, townhouse or villa in a Community Titles Scheme (ie: with a body corporate) you are legally required to include a “disclosure statement” with the sales contract. This statement is a specially prepared document that outlines the property’s current standings with the body corporate.
A question that people often ask when selling an apartment, townhouse or unit in a strata scheme is: How do I acquire the disclosure statement for the sales contract?
In order to procure the disclosure statement you can start by contacting the Body Corporate management company. You’ll no doubt already know who this is, it will be the company that sends you the Body Corporate minutes and invoices every few months. It might pay to reach out to this company and just ask them how quickly and how much a disclosure statement will cost from them and give them a heads-up that you’ll be needing one soon. Typically, it will cost about a hundred dollars for such a statement to be provided – it’s not a huge amount of money… But keep in mind that in order for your contract to be valid, the Disclosure Statement can’t be more than 1 month old, so there’s no point getting this statement prepared from the outset as the sales process will probably be longer than 30 days. Instead – get a copy of your most recent BC Levy Notice (hopefully showing a zero balance) along with your latest Water and Rates bills, also all paid up (hopefully!). These will furnish your prospective buyer with evidence of the outgoings and the account standings at the time of the inspection, without having to spend money on a disclosure statement from the outset.
Also get a copy of the BC Financials and Minutes for the previous year and while you’re speaking to buyers you can make mention of all the things that have been paid for in the building. “We just painted the entire building six months ago, the lifts have all just been upgraded they’re good for another 20 years, the sinking fund is flush with cash, etc, etc”. Being the owner in the complex, you’ll likely be armed with far deeper knowledge of the operations of the body corporate and the building than an outside agent, so use this when you’re selling! Buyers will be impressed you have such a deep knowledge of the complex.
When presenting this information to the buyer, you can explain that you will, of course, have prepared a full disclosure statement from the Body Corporate, but it can’t be older than 30 days so you’ll do this and have it attached to the contract of sale.
An interesting strategy we’ve seen sellers employ effectively, is to present the buyer with an ‘Offer Document’. This is a very simple and unimposing 1-page document that allows the buyer to jot down their name, postal address, email, phone number, and the details of their solicitor along with how much they’d like to sign the contract for. We will provide you with a blank offer document that you can use for this very purpose. You can whip this out on the spot and, although it’s not legally binding, in the mind of the buyer, it implants them into the sales process and gives you a stop-gap-measure while you or your solicitor prepares the sales contract and disclosure statement and get these out to the buyer and their solicitor for signing. It can also ensure your sales contract is nice and clean without pages of crossed out offers scrawled all over it.
A good Body Corporate management company will produce your disclosure statement quickly and affordably. It’s not as difficult as you might think. Good luck!