Bccm Amendment Act V2
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The Body Corporate and Community Management and Other Legislation Amendment Act 2010 introduces important changes for agents involved in the sale of community title lots. Key changes include requiring a Community Management Scheme Statement to accompany disclosure statements and introducing new information that must be disclosed. Agents should review and supplement existing disclosure statements to comply with the new requirements, which take effect upon the Act's assent. The Real Estate Institute of Queensland will also be releasing revised disclosure statement forms.
Bccm Amendment Act V2
- 1. Important information for agents involved in the sale of lots and proposed lots in Community Titles Schemes The Body Corporate and Community Management and Other Legislation Amendment Act 2010 (the BCCM Amendment Act) was passed on 6 April 2011 and will commence on assent. This is expected to occur in coming days. Agents should be aware of the following key amendments which the BCCM Amendment Act introduces to the Body Corporate and Community Management Act 1997 (the BCCM Act). 1. Provision of Community Management Scheme Statement If you are selling an existing lot, the section 206 disclosure statement must be accompanied by the Community Management Scheme Statement (CMS). The CMS must be provided to the buyer before the buyer enters into a contract. Failure to comply with this requirement will enable the buyer to terminate the contract at any time prior to settlement (section 206(7) of the BCCM Act). 2. New section 206 disclosure requirements The BCCM Amendment Act also introduces new information and statements which must be included in: • a section 206 disclosure statement (for existing lots); and • a section 213 statement (for proposed lots). (a) New requirements for section 206 disclosure statements The section 206 disclosure statement must state the extent to which the amount of annual contributions currently fixed by the body corporate as payable by the owner of the lot: (a) are based on the contribution schedule lot entitlements for the lots included in the scheme; and (b) are based on the interest schedule lot entitlements for the lots included in the scheme. The section 206 disclosure statement must also include the following statement: The contribution schedule lot entitlements and interest schedule lot entitlements for the lots included in the scheme are set out in the community management statement for the scheme. A copy of the CMS must also be attached to the section 206 disclosure statement. (b) New requirements for section 213 disclosure statement The section 213 disclosure statement must state the extent to which the amount of annual contributions reasonably expected to be payable to the body corporate by the owner of the proposed lot: (a) are based on the contribution schedule lot entitlements for the lots included in the scheme; and (b) are based on the interest schedule lot entitlements for the lots included in the scheme; and The section 213 disclosure statement must also include the following statement: The contribution schedule lot entitlements and interest schedule lot entitlements for the lots included in the scheme are set out in the proposed community management statement for the scheme. reiq.com.au 1
- 2. When will the new requirements apply? Given the date of commencement is not precisely known (it is anticipated that assent will occur somewhere between 8 to 10 days from 6 April 2011), the REIQ recommends agents consider complying with the requirements set out in paragraphs 1 and 2 immediately to avoid the risk of issuing non-complying disclosure statements. To this end, existing section 206 and 213 disclosure statements should be supplemented with the additional information and statements outlined in paragraph 2(a) and (b) above, as applicable. Meanwhile, where a section 206 disclosure statement is issued, a CMS should also accompany the supplemented disclosure statement. Buyers should also be asked to provide a signed acknowledgment confirming receipt of: (a) the supplementary disclosure information and (b) a copy of the CMS before entering into the contract. The status of contracts issued but not yet executed before commencement of the BCCM Amendment Act The BCCM Amendment Act contains transitional provisions dealing with contracts which have been issued but not signed by both parties prior to commencement. In these circumstances, after the commencement of the BCCM Amendment Act, a seller must provide a new disclosure statement in compliance with the new requirements set out in paragraphs 1 and 2 above. Alternatively, where a disclosure statement has been given (provided it was compliant at the time of issue), a written notice can be given to the buyer setting out the information outlined in paragraph 2 above. The written notice must be accompanied by the CMS. How do I obtain the CMS? A copy of the CMS may be obtained from the land titles office within Department of Environment and Resource Management (DERM), or from the seller. Agents should exercise caution when using a CMS provided by a seller. The REIQ recommends agents take necessary steps to ensure the CMS is the current version recorded for the scheme. A CMS can be obtained from DERM over the counter for a fee of $27.50. Alternatively, a CMS can be ordered over the telephone and mailed for an additional fee. Depending on the size of the CMS, the document may also be faxed to an agent by DERM for an additional fee. Revised form 206 disclosure statement The REIQ will be releasing a revised section 206 disclosure statement shortly. Other legislative amendments Following commencement, new legislative provisions will require a seller to give a buyer a copy of a new CMS if, after a contract for the sale of the lot is entered into but before it settles, a new CMS for the community titles scheme is recorded. In such circumstances, the seller must give the buyer a copy of the new CMS to the buyer within 14 days of the scheme’s new CMS being recorded. Where the above occurs, a buyer may terminate the contract for the sale of the lot if: • it has not already settled; and • the buyer would be materially prejudiced if compelled to complete the contract given the extent to which the new CMS is different from the CMS last advised to the buyer. The termination of the contract must be in writing and given to the seller within 14 days, or a longer period agreed between the buyer and seller, after the seller has given the buyer the new CMS. There are a number of other circumstances which will give rise to termination rights in relation to both contracts for the sale of lots and proposed lots. Agents should familiarise themselves with these new provisions which are contained in sections 28, 29, 30, 32 and 33 of the BCCM Amendment Act which can found at: http://www.legislation. qld.gov.au/Bills/53PDF/2010/BodyOLAmB10.pdf Revised Form 14 A revised BCCM Form 14 is yet to be released. The REIQ will keep members and Realworks users informed about the release of the revised version of this form. reiq.com.au 2