Selling a Unit Title property where there is no active Body Corporate

If you are considering selling a unit title property where there is no “active” body corporate in place, it is important to note that the same rules apply to an “inactive” Body Corporate as to an “active” one.

When selling a unit title property, the vendor needs to supply the following to the purchaser as part of the sale:

• a pre-contract disclosure statement;
• a pre-settlement disclosure statement;
• insurance details; and, if requested by the purchaser,
• an additional disclosure statement.

Where there is no active Body Corporate, many parts of the pre-contract disclosure statement will not be applicable.  In that case, the words “not applicable”.  

At the very least, owners within a unit title complex should have a joint insurance policy covering all units, with ‘levies’ being the insurance premiums split between the owners in proportion to their respective ownership interests.  This is because if one property within the complex is damaged, the others are likely to be affected. 

The vendor will also need to provide a pre-settlement disclosure statement to the purchaser at least five working days before settlement.  This needs to be signed by all owners in the complex, if there is no active Body Corporate.  A vendor should ensure they allow sufficient time to get all these signatures before the deadline, especially if one or more owners is likely to be hard to contact.

If you are part of a unit title complex and are concerned that there is no active Body Corporate, or that the Body Corporate is not operating as it should be, it would be worthwhile discussing the situation with your legal advisor.