Unit Owners Association of Queensland Inc

Hints for buying a unit or townhouse
When you buy a unit or townhouse you become part of a body corporate, which is governed by the Body Corporate and Community Titles Act 1997 and the Accommodation, Standard or Small Schemes Regulation Module which is applicable to the scheme.

All owners are members of the Body Corporate and share the ownership of common areas such as pools, lifts and stairways. They share the financial responsibility for the maintenance of common property along with other anticipated long term cost such as painting. Contributions are usually paid quarterly in accordance with the contribution schedule. Before signing a contract the buyer should receive and sign a "Disclosure Statement". The statement lists the name of the secretary and/or body corporate manager, current annual contributions, lot entitlement, insurance details, improvements to common property that the owner is responsible for, the regulation module applying to the scheme and body corporate assets on register over $1,000.00.

It is recommended that you carry out the following:

a. Obtain a "Body Corporate Information Certificate" from the secretary or manager of the body corporate. The certificate sets out annual contributions, number of instalments, dates for payment, discount if any, penalty if any and any contributions unpaid.

b. Obtain a copy of the Community Management Statement from the Dept of Natural Resources. This document describes the scheme and any future development, it also includes the Interest Schedule, Contribution Schedule, By‑Laws and allocation of Exclusive use areas.

c. Check the Contribution Schedule entitlement of the lot you are purchasing and that of others to compare differences in contributions.

d. Conduct a search of the body corporate records.

e. Obtain copy of the minutes of the Annual General Meeting, financial statements and the current budgets.

f. Obtain a Certificate of Insurance

Ensure that the body corporate has in place:

1. Adequate insurance to cover common property, assets and placement of fixtures and fittings.
2. Public liability insurance at least $10,000,000.00
3. Office bearers liability insurance for committee is recommended
4. 10‑year sinking fund forecast to cover the current financial year and an anticipated amount to cover capital expenditure over the next 9 years.
5. Adequate funds in sinking fund to cover anticipated capital maintenance. (this reduces the need for a special levy).
6. Separate accounting records for administrative and sinking funds even if the funds are held in the one bank account.
7. Roll of lots and entitlements (details of original owner, current owner, contribution and interest schedule, lot entitlements & mortgagee in possession)
8. Register of assets (body corporate assets valued over $1,000.00)
9. Register of authorisations affecting common property (occupation authority given to service contractor or letting agent & improvements to common property made by an owner for their own benefit)
10. Register of engagement and authorisation (ensure that contracts with body corporate / building managers and service contractors are legal and current)
11. Register of allocations under exclusive use by‑law

Ensure there is not any:

1. Unpaid body corporate fees
2. Outstanding liability claims
3. Unpaid council rates
4. Adjudicator's orders concerning the scheme
5. Hidden or obvious defects in common property
6. Last but not least always seek legal advice before entering into any contract.

General:

You can ensure that quality fitting and fixtures (unless otherwise stated in the contract) such as curtains, blinds, light shades etc remain and are not changed from what was there when you inspected prior to signing the contract by taking photos. Also if buying a furnished unit or townhouse it is recommend that you have the brand and capacity of fridges etc written into the contract.

Make sure your solicitor forwards a Form 8 notifying the body corporate of change of ownership.

For further assistance

Join the Unit Owners Association of Queensland Inc Phone / Fax 3220 0959

Postal address GPO Box 2359, Brisbane 4001

Website: www.uoaq.org.au
Email: help@uoaq.com.au

OR Contact the Information Service of the Office of the Commissioner for Body Corporate and Community Management, Department of Tourism, Racing and Fair Trading;

Freecall: 1800 060 119
Fax: 07 32278023
Location: Level 8, 144 Edward St
Postal Address: GPO Box 1401 Brisbane Q 4001

Email: bccm@dtrft.qld.gov.au

Website: http://www.justice.qld.gov.au/bccm

These notes are for discussion purposes only and are not offered as and should not be taken as advice in any form. To obtain a more detailed understanding of the law, seek advice from a competent legal practitioner