“For us it’s ultimately improved and simplified the compliance around disclosures to make all strata related information easily available and clearly laid out, and ensures that the information is explained by the sales agent to any buyer who’s purchasing a strata property.’ Said Scott Fletcher of Realmark Urban.
Scott commented that the changes improve the security for both the buyer and seller of strata properties but in particular, ensures the buyer is well-informed before making their decision to purchase.
At a high level the seller will need to provide the prospective buyer/s with the following information to ensure they are compliant:
•Estimated strata levy contributions over a 12 month period;
•the most recent statement of accounts of the strata scheme;
•any amount already owed to the strata company by the current lot owner;
•the minutes from the most recent annual general meeting of the strata company or any extraordinary general meeting that’s been held since;
•a full set of the scheme’s by-laws;
•information about any termination proposal received by the strata company.
As you may be aware, properties that are part of a strata scheme with 10 or more lots are also now required to have a 10-year maintenance plan and reserve fund put in place. This requirement also applies to schemes with a large replacement cost of $5 million for building/s or improvements on the common property. Schemes do however have the next year to implement these changes, which means some properties being sold will not yet be required to include this planning document in the disclosure.
There is also some extra information if the seller is the developer of the strata scheme. Sellers will have to provide prospective buyers with more information, using the prescribed disclosure form and a general information form. Some of the new forms released by Landgate include:
•Precontractual Disclosure Statement to the Buyer (replaces Forms 28 and 29)
•Schedule 1 and Schedule 2 By-laws (these have been rewritten)
•Part B Statements (note this is used if in the Precontractual Disclosure the seller is unable to provide minutes of meetings or financial accounts then the seller must make a statement as to why there is a form sets out suitable reasons e.g. the scheme is a 2-5 lot scheme and the scheme is not required to keep minutes.)
Even after a contract is signed if certain changes occur, the seller may need to advise the buyer, these are referred to as notifiable variations. You should liaise with your lawyer, settlement agent and real estate representative if there have been changes to a strata scheme that you are selling as soon as practicable to ensure that you provide the required information in time.
We’ve found majority of owners don’t have all of this information readily available and in some cases find it stressful acquiring all the required documents to fulfill the new disclosure.
Some strata companies are now offering to supply this documentation at a fee to the seller. For Realmark strata owners, we store all of this information for you for free in our Owner Portal. We recommend as part of your preparing to sell checklist, you request access to this portal if you haven’t already and check that all of the relevant documents are there. You can request access by contacting your strata manager today.
We hope we’ve been able to shed some light on what is required to be provided to buyers when you’re selling your strata property. Our strata managers and sales representatives have been participating in regular training and learning so that they’re equipped to answer any questions or are able to help you successfully sell your property when it comes time.
You can learn more at www.strata.wa.gov.au/.
The above information is general in nature, please obtain advice specific to your circumstances before acting.