Does A Section 206 Disclosure Statement Expire?

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If you’re selling a lot in a body corporate in Queensland then you will need to provide your agent(s) with section 206 disclosure statement.  Some agents suggest that you get a disclosure statement as soon as you list your property, however it can be many months between listing your property and any actual contract for sale. Does the section 206 disclosure statement expire?

Yes, Disclosure Statements Expire

A disclosure statement, much like a certificate of currency, is really only valid for the day that’s its prepared. That’s because anything can happen at any time that may result in a levy being issued. For instance, the building may be flooded, or a tree fall on the roof, or suffer a major fire.

Alternatively it may be a staged development with new lots being registered, have land sold or resumed, or have gone through a lot entitlement change.

Body Corporates are complex and varied and so are the circumstances that affect the levies,which in term affect the validity of a section 206 disclosure statement.

Assuming nothing major happens to the body corporate, which in most cases it won’t, then the disclosure statement will still expire. Levies in a body corporate are issued every 12 months. At any given point in time the maximum length of time a disclosure statement will be valid is a year, after which the levies will change and a new statement will need to be obtained.

How Do I Know When A Disclosure Statement Expires

Most section 206 disclosure statements will note the financial year end and/or the period the levies are issued for.

The disclosure statement is valid up to the end of the financial year of the subject body corporate, and until the next levies are issued, which will be at the next Annual General Meeting (AGM), which must be within three months of the end of year.

Through this three month period it can sometimes seem like the disclosure statement has expired, which it has, but unfortunately there is no new information to replace the expired information.

In fact if you purchase a disclosure from some body corporate managers you may receive a disclosure that states the levies are nil. This is usually not because the levies are nil, but rather, no levies have been issued for the current financial year end.

How To Get the Most From Your Section 206 Disclosure Statement

  • Take note of when your body corporate has their AGM and request your disclosure immediately after.
  • Real estate agents want a disclosure on listing as one of the first questions potential purchasers ask is how much are the levies? A copy of the last levy statement is a good alternative to a disclosure, however, be aware that a levy statement is only for one levy issue and may not be indicative of the levies for a year.
  • Be prepared to obtain two section 206 disclosure statements during the sale if necessary; one at listing and one at time of contract if the previous disclosure has expired.
THE BASICS OF BODY CORPORATES

A little knowledge can go a long way


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