Law Change : Unit Titles and Additional Pre-Disclosure Requirements for Sale

If you own a commercial unit title property or are a landlord of such a property, there have been recent legal changes you should be aware of.

These recent changes impact the rules governing unit titles and their application to property owners.

Key points of these changes include:

•   Sellers are now required to provide more detailed information in the pre-contract disclosure statement before entering into a sale and purchase agreement.

•    Even after the sale agreement is signed, additional information is required before the settlement is finalized.

•    Buyers may delay settlement or cancel the sale under certain conditions if criteria are met.

The Unit Titles Act 2010 and its regulations now mandate that sellers provide comprehensive information to potential buyers. Additionally, buyers have enhanced rights if these information requirements are not fulfilled.

Before entering into a sale and purchase agreement, sellers must provide a pre-contract disclosure statement. This must include financial statements, details on maintenance issues, weather tightness, and related matters, as well as body corporate general meeting minutes from the past three years. The legal amendments also cover the governance of body corporates, including how meetings are conducted.

The changes elevate the standards for body corporate managers. Large unit titles (those with 10 or more units) must hire at least one body corporate manager, with the role now clearly defined in the legislation.

Moreover, the law ensures that proper planning is done for maintenance, requiring body corporates to maintain a long-term maintenance plan for at least the next 30 years. Additionally, a long-term maintenance fund must be established, and the Ministry of Business, Innovation, and Employment (MBIE) has been granted greater enforcement powers.