Purchasing a lot under a body corporate? Community title scheme? Body Corporate Record Search? Don't understand what it means? In this video John Gallagher, solicitor from Argon Law provides the information you need when purchasing a lot through a community title scheme, and what a Body Corporate Record Search is.
A key part in investigations is to commission a body corporate record search. Which involves an experienced agent attending at the offices at the body corporate manager to review the records of the body corporate. These include the minutes of the meetings of the body corporate and its members. The record includes all key contracts entered by the body corporate and expert reports commissioned by the body corporate. A review of such documents can reveal problems within the body corporate, including disharmony amongst the members, or the existence of defects in the body corporate assets or structures. These defects can result in increased levies, payable by the lot owners to the body corporate.
Some of the problems identified by a body corporate search don't actually give the buyer a right to terminate an existing contract. It's important to get the report before your sign the contract.
Why Reviewing Body Corporate Records is Crucial When Purchasing a Unit in Queensland
Units are increasing with popularity, especially in the Sunshine Coast where there has been a steady increase in strata properties due to limited land availability.
Buying a residential or commercial unit is a considerable commitment and there may be issues which are not ascertainable on a visual inspection of the premises, such as a dysfunctional body corporate committee, building issues and disputes amongst unit owners. Sometimes, buyers are purchasing a lemon, unaware of the dysfunctionality of the body corporate or upcoming major expenses such as lift replacement, roof replacement or substantial waterproofing works which need to be conducted and which have yet to be levied to the owners.
Reviewing body corporate records by obtaining a Body Corporate Records Inspection search is crucial when buying a unit in Queensland because it provides valuable information about the complex, the functionality of the body corporate, and any potential issues that may affect your ownership and investment.
The search will provide copies of information including meeting minutes, financial records, and internal communications, which can provide information on the following:
- Financial health: The financial records of the body corporate provide insight into the financial health, including the level of levies, outstanding debts, and future capital works plans. This information will help you to determine whether the body corporate is financially stable and whether there are any potential financial risks.
- Disputes and litigation: The records can reveal if there are any ongoing disputes or litigation related to the property. This information will help you to understand the potential risks associated with buying the property, and the extent to which these risks may affect your ownership and investment.
- Building maintenance: The records can provide information about the maintenance history of the property, including any defects or repairs that have been carried out. This information will help you to understand the condition of the property and whether there are any maintenance issues that may require attention in the future.
- Bylaws and regulations: The records will contain the bylaws and regulations that govern the property. These documents will help you to understand your rights and obligations as an owner, and any restrictions on the use of the property.
- Insurance: The body corporate is responsible for insuring the common property and any shared assets. The insurance policy details will be in the body corporate records, and this information will help you to understand what is covered and the level of insurance coverage.
Reviewing body corporate records is important to ensure that you make an informed decision about your proposed unit purchase. If you are considering purchasing a unit, please contact our experienced team at Argon Law to assist you with the pre-contract negotiations and conveyancing for your next investment.