Unit title guidance
The Unit Titles Act 2010 includes disclosure requirements for buying and selling unit title properties. This page outlines what your obligations are and the types of disclosure required.
Unit Titles Act 2010
The Unit Titles Act 2010 includes disclosure requirements for buying and selling unit title properties such as apartments and townhouse developments. Vendors must supply formal disclosures to buyers at three separate stages of a transaction:
- Before any sale and purchase agreement is signed.
- Before the settlement date.
- If additional disclosure is specifically requested by the buyer.
These disclosure requirements only apply to unit title developments. You can tell if a property is a unit title development because the record of title will state either ‘stratum in freehold’ or ‘stratum in leasehold’. If in doubt, check with a lawyer or licensed conveyancing practitioner.
For more information, and to read the Unit Titles Act 2010, visit the Unit Title Services website here.
Unit Titles Amendment Act changes to disclosure
Law changes to the Unit Titles Act 2010 passed by Parliament on 9 May 2022 have implications for licensees, property owners, building managers, and developers.
Amendments to this Act aim to improve the information provided to prospective buyers of units; as well as governance of multi-unit properties and higher density complexes.
This legislative change highlights that licensees need to be fully aware of your disclosure obligations, and the potential consequences for vendors if inadequate pre-contract disclosure is provided.
The Act’s full name is the Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Act 2022 (Amendment Act). It comes into force by Order in Council, or two years from the date of Royal Assent which was on 9 May 2022. There is more here.
Unit title ownership, also called a 'strata title' or 'stratum estate', is most common in buildings with multiple owners. We have information about unit title ownership on the Settled website here.
The three stages for disclosure
The pre-contract disclosure provides prospective buyers with information about the property they are looking to buy. It includes basic information about the unit and the development.
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 and be in the prescribed form (Form 18 of the Unit Titles Regulations 2011). A list of the prescribed information can be found in regulation 33 of the Unit Titles Regulations 2011.
You can download the prescribed pre-contract disclosure statement form from the Unit Title Services website here.
Vendors must 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.
The pre-settlement disclosure must be provided 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.
The purpose of the pre-settlement disclosure statement is to give the buyer a summary of the current fees and charges relating to the unit and information on whether there are any proceedings pending against the body corporate, and if there have been any changes to the body corporate operational rules.
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. Unlike the pre-contract disclosure statement, there is no prescribed form to use for the pre-settlement disclosure statement, but we recommend you use the pre-settlement disclosure statement template available here from the Unit Title Services website.
Vendors should prepare this statement with assistance from their lawyer or licensed conveyancing practitioner and are expected to meet the related costs.
The vendor must provide additional disclosure statements if requested by the buyer. The buyer can either require a full additional disclosure statement or request some but not all of the information that would otherwise be in that statement. The buyer may request this at any time before the close of one of these two dates (whichever occurs first):
- The 5th working day after the date the sale and purchase agreement was entered into
- The 10th working day before the settlement date noted in the sale and purchase agreement.
If the additional disclosure statements are not provided within five working days, the buyer can either:
- delay settlement until the 5th working day after the date the additional disclosure statement is provided: or
- cancel the sale and purchase agreement by giving 10 days’ notice.
If the buyer requests a full additional disclosure statement, keep in mind that there is prescribed information that must be included in that statement. You can find a list of the prescribed information in regulation 35 of the Unit Titles Regulations 2011. There is no prescribed form to use for the full additional disclosure statements, but we recommend you use the additional disclosure statement template available here on the Unit Title Services website.
Vendors should prepare this statement with their lawyer. The costs incurred in preparing this disclosure statement should be met by the buyer.
What this means for you
Talk to your vendor about the need to provide a pre-contract disclosure statement as early as possible and preferably before you start marketing the property.
Show your vendor the recommended pre-contract disclosure statement (Form 18) and discuss how the information can be collected to complete it. Explain to your vendor that they must sign the pre-contract disclosure statement and that they should get legal advice if they are unclear about what this means.
Encourage your vendor to provide serious prospective buyers with as much relevant information about the body corporate as they can. This may mean that your vendor will be disclosing more than is legally necessary at the pre-contract stage, but it will help prospective buyers to make a more informed decision about their purchase. This will reduce the risk of the transaction falling through later.