From today 01 August 2013, amendments to the Body Corporate and Community Management Act 1997 (BCCM Act) take effect. Buyers will now need to conduct more thorough due diligence because sellers are no longer required to provide:
• a copy of the Community Management Statement (CMS); or
• the extent to which annual contributions payable by the owner of the lot are based on contribution schedule entitlements or interest schedule entitlements.

Though aimed at reducing the current disclosure fees and speeding up contract preparations, purchasers of lots in community titles schemes have lost some protection.

A Community Management Statement (CMS); contains information that is vital to understanding the liabilities, rules and regulations that are imposed on each lot in the scheme.

The amendments also omit the provisions which entitled a purchaser to terminate a contract on the basis that the seller failed to give the purchaser a copy of the community management statement, or did not strictly comply with the relevant disclosure requirements (e.g. gave the purchaser an out-dated community management statement), or a new community management statement has since been recorded which materially prejudiced the purchaser.

From 1980, lot entitlements were for the most part regulated by the Building Units and Group Titles Act (“BUGTA”). There was no set basis for calculation of lot entitlements, however most developers calculated lot entitlements using the proportionate value of each lot by default.

In 1997, the Body Corporate and Community Management Act (“BCCMA”) came into force. The BCCMA required that lot entitlements must be equal, except to the extent to which it is just and equitable for them not to be equal. This presumption favoured the wealthy because the owners of larger more expensive apartments were obliged to pay the same Body Corporate levies as the owners of apartments of lesser value.

In 2011, a Bill was passed that allowed anyone affected by the changes imposed by the BCCMA to re-adopt the calculation of lot entitlements based on the proportionate value of each lot. This favoured the owners of lesser value lots who could force bodies corporate to shift larger entitlements to owners of higher value lots.

On 19 March 2013, the Body Corporate & Community Management Amendment Bill 2012 was passed. This Act allows owners who had entitlements reversed under the 2011 amendments to be adjusted back to the 1997 system of entitlements being equal and only different in limited circumstances. Lower value unit owners, pensioners and people on fixed income are likely to feel increased financial pressure.

What Buyers Can Do: Seek independent, experienced valuation, legal & investment advice.


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