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Unit Titles & Bodies Corporate



We have previously advised our clientele on the impending changes to the Unit Titles Act by the introduction of the new Unit Titles Act 2010 (“the new Act”) and the implications on Unit Title owners. If you are the owner of a Unit Title property you need to be aware that the 15 month time period for adopting new Body Corporate operational rules is fast approaching.

The changes to the new Act are extensive however in particular we wish to draw your attention to the following:

Body Corporate Rules - the old rules of the Body Corporate formed under the Unit Titles Act 1972 continued to apply for 15 months following the date in which the new Act came into force (viz 20 June 2011) and expire on 20 September 2012 when the “Operations Rules” of the new Act will apply. To avoid having the mandatory rules imposed on the Body Corporate, the Body Corporate will need to adopt new Body Corporate Operational Rules at its next AGM whereupon the old rules can be disposed of.
It is important that the existing rules are reviewed. Many existing rules convey benefits or obligations on Unit Title owners – for example, not to hang clothes washing in certain areas of the development or not to house pets. Many of these rights and obligations might be lost on the simple adoption of the operational rules under the new Act. A comprehensive review of the existing rules should therefore be considered before the next AGM and certainly prior to the expiry of the 15 month transitional period viz 20 September 2012.

Remember, the 15 month time period for reviewing and adopting new Body Corporate operational rules expires on 20 September 2012.

Other Important Changes:

Register - the Body Corporate must keep and maintain a register of all unit owners and the units they own. Each unit owner is responsible for updating the Body Corporate on any changes to the information held in relation to their unit.
Operating Account – the Body Corporate must establish and maintain an Operating Account at a bank for the purposes of meeting expenses of the Body Corporate including management expenses, services and amenities, costs of statutory or regulatory compliance and ground rental or license fees relating to the land or common property. The Body Corporate may, by Special Resolution, nominate a person or persons to operate and administer the account specifying the manner in which it may be operated.
Long-term Maintenance Plan – the Body Corporate must establish and regularly maintain a long-term maintenance plan which must cover a period of at least 10 years from the date of the plan. The purpose of this plan is to identify future maintenance requirements and estimate the costs involved, support the establishment and management of the funds, provide a basis for levying owners of units, and provide ongoing guidance to the Body Corporate on future maintenance decisions. The Long-term Maintenance Plan must be reviewed every 3 years.
Long-term Maintenance Fund – a Long-term Maintenance Fund is required to be established by the Body Corporate to fund the Long-term Maintenance Plan unless the Body Corporate resolves by Special Resolution not to do so. This account can only be used for costs associated with the Long-term Maintenance Plan.
Optional Contingency Fund – the Body Corporate may establish one or more contingency funds to provide for unbudgeted expenditure.
Optional Capital Improvement Fund – the Body Corporate may establish a capital improvement fund to provide for spending that adds to or upgrades the unit title development if that spending is not provided for in the Long-Term Maintenance Fund.
Selling Your Unit?

In terms of selling a unit title property, there are 3 essential documents that must be prepared and produced at various stages during the sale process. The 3 essential documents are as follows:

Pre-Contract Disclosure Statement (Section 146)
Before a buyer enters into an Agreement for Sale and Purchase, the seller must now provide the buyer with a disclosure statement known as a Pre-Contract Disclosure Statement (“PCDS”). The PCDS must contain certain information regarding the unit title property, insurance, levies, Body Corporate rules, Body Corporate Chairperson and Body Corporate accounts.
Additional Disclosure Statement (Section 148)
Pursuant to Section 148 of the new Act, the buyer may request an Additional Disclosure Statement (“ADS”) before settlement. The ADS must be provided by the seller to the buyer no less than 5 working days prior to the settlement date and contain certain information as provided in the Act.
Should the buyer not require any further information regarding the unit title property, the ADS will not be required.
Pre-Settlement Disclosure Statement (Section 147)
Before settlement of the sale of a unit, the seller must provide a Pre-Settlement Disclosure Statement (“PSDS”). The information which must be contained in the PSDS is again set out in the new Act.
There are legal consequences on the seller for failing to provide the PSDS and the ADS within the timeframes prescribed by the new Act. The buyer may delay settlement until such time as the information is received or the buyer may cancel the Agreement to purchase.

All of the Disclosure Statement issues are matters that your Body Corporate Secretary or chairperson, Real Estate Agent and Solicitor will be able to assist you with in the even that you intend to sell your property.


The new Act requires a greater degree of diligence, involvement and compliance by all unit title property owners in terms of the Body Corporate structure and organisation and extensive disclosure when selling a unit.

We have completed an extensive review of the new legislation and its effect on existing Unit Title owners and the Body Corporate. We are familiar with the requirements of the legislation. It is our intention to provide from our office a Unit Title Owners and Body Corporate service to assist owners and Body Corporates through the changes under the new legislation. The first important points are to ensure that a meeting is held for the appointment of a chairperson and ensure that benefits (or obligations) contained in existing Body Corporate rules and conferred on Unit Title owners are preserved and not lost in the transition to the rules under the 2010 legislation.

We are happy to provide our assistance to you in relation to preparing and incorporating new operational rules for your development or any other Unit Title matter of concern.

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