How important are pre contract disclosure statements and what is the real estate agent's role in obtaining these?
It is vital that a pre contract disclosure statement (PCDS) is obtained as early as possible in the sale process when acting for a vendor who is selling their unit title property.
Under Section 146(1) of the Unit Titles Act 2010 (the Act), a PCDS MUST be provided to a purchaser BEFORE the agreement is signed and must be in the prescribed form. We have noticed that some contracts have conditions inserted whereby the vendor will provide the purchaser with a PCDS within 5 working days of the date of the agreements instead of the PCDS being provided prior to the signing of the agreement.
Whether or not a body corporate operates, the vendor is still legally required to provide a PCDS. If no body corporate operates, the vendor still must complete the PCDS.
The PCDS declares information in respect of levies (or in the absence of an operational body corporate payment, of insurance premiums) and long term maintenance plans (if any) and so is important for prospetive purchasers when completing their due diligence.
What can you do as agents?
Discuss with your vendor as early as possible the need for the PCDS and go over the prescribed form with them. Alternatively, request the body corporate manager or secretary (where one exists) to provide a PCDS as soon as possible. Body corporate management companies may charge a fee for preparing the PCDS.
You should include the PCDS in any marketing material. Encourage the vendor to provide as much information about the body corporate including levies, insurance, long term maintenance plan, accounts, budgets, minutes of any meetings, there is no harm in providing as much information as possible as generally a purchaser will request it further down the track.. Providing this information will help potential purchasers in making their decision about the property and reduces the risk of delays and complications at a later stage and, at the worst, non-compliance with the Act can mean a contract may come to an end.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.