The Amendment Act specifies new and fuller disclosure requirements for buying and selling unit title properties and requires a wider range of information to be provided to prospective purchasers. It also provides purchasers with additional rights if requirements are not met.
These disclosure requirements came into force 9 May 2023.
Stage 1: Pre-contract disclosure statement
The pre-contract disclosure statement provides prospective buyers with information about the property they are looking to buy. It includes basic information about the unit and the development.
There is now a distinction between a pre-contract disclosure statement for the sale of an existing development and an off-the-plans development, with each requiring different information to be provided to potential buyers.
Vendors must provide a pre-contract disclosure statement to buyers before a sale and purchase agreement is signed. The pre-contract disclosure statement should be completed as early as possible, preferably before marketing the property. You should explain this to your vendor. You will also need to talk to your vendor about how the required information can be collected and explain that they should seek legal advice before completing the form.
When you have the signed and dated pre-contract disclosure statement, provide it to all potential buyers as early as you can, for example, at open homes. At the very latest, it must be provided to the buyer before the buyer enters into a sale and purchase agreement. The buyer will acknowledge receipt of the pre-contract disclosure statement in the sale and purchase agreement.
The pre-contract disclosure statement must include certain prescribed information. A list of the new prescribed information can be found in Regulation 33 of the Unit Titles Regulations 2011(external link). The pre-contract disclosure statement can be completed using the templates created by the Ministry of Business, Innovation and Employment. These are examples of how to successfully provide the required information under Regulation 33.
Download pre-contract disclosure statement templates at unittitles.govt.nz(external link)
There was previously a prescribed form outlining the information required for the pre-contract disclosure statement - Form 18 from the Unit Titles Regulation 2011 – but this has been repealed under the Amendment Act.
There are consequences for the failure to make a pre-contract disclosure. If a vendor fails to provide the buyer with a complete and accurate disclosure, the buyer can cancel the sale and purchase agreement for the unit title property or delay settlement, (subject to strict notice periods).
Stage 2: Pre-settlement disclosure
Vendors must also provide a pre-settlement disclosure statement to buyers when a sale and purchase agreement has been signed and before the transaction has settled. This disclosure must be accompanied by a certificate provided by the body corporate that certifies the information in the statement is correct.
Like the pre-contract disclosure statement, there is different information required for the pre-settlement disclosure statement for off-the-plans sales, and sales of existing developments.
The purpose of the pre-settlement disclosure statement is to give the buyer additional information once the sale and purchase agreement has been entered into, and before settlement date.
The pre-settlement disclosure statement must include certain prescribed information. A list of that prescribed information can be found in Regulation 34 of the Unit Title Regulations 2011(external link). We recommend you use the pre-settlement disclosure statement templates.
Download pre-settlement disclosure statement templates at unittitles.govt.nz(external link)
Just like the pre-contract disclosure statement, there are also consequences for failing to provide a pre-settlement disclosure statement, or if it is incomplete or inaccurate.
The vendor must provide the pre-settlement disclosure statement no later than the 5th working day before the settlement date. If it is not provided by this time, the buyer can either:
- delay settlement until the 5th working day after it is provided, or
- cancel the sale and purchase agreement by giving 10 days’ notice.
Vendors should prepare this statement with assistance from their lawyer or licensed conveyancing practitioner and are expected to meet the related costs.
Additional disclosure on request
Vendors no longer need to provide an additional disclosure statement on request from a buyer. This requirement was repealed as part of the recent changes to the Unit Titles Act. A buyer can still request for further information should they want to, but there is no formal requirement by the vendor to provide it.