Section 206 Disclosure Statement Requirements Changed

Effective 1st of August, 2013 the Body Corporate & Community Management Amendment Act 2012 (second Amendment Act) changes re section 206 disclosure statements came into force.

The most important change is that section 206 disclosure statements no longer need to include a copy of the  Community Management Statement (CMS).

This will come as something of a relief to search agents, real estate agents and solicitors alike. Community Management Statements are often large (the largest I’ve seen is 244 pages long), and for the bigger buildings they change frequently.

Removing the requirement is a welcome bonus.

The idea of making sure a CMS is available to the purchaser, before they enter into a contract to buy, is a good one. There’s a lot of information there that savvy investors make themselves aware of.

That said, the onus of looking at the CMS should rest squarely with the buyer, not the seller or their agents.

Other changes to Section 206 Disclosure Statement

Disclosure statements documents should now be amended by removing the following provisions:

• The extent to which the amount of the annual contributions currently fixed by the body corporate and payable by the lot owner
• Statement to buyer regarding the contribution lot entitlements
• Acknowledgement that the buyer has received a copy of the CMS with the disclosure

In all other ways the disclosure requirements remain the same.

There is no transition period with these changes. All disclosures used in contracts on and from 1/8/2013 should be on amended forms and should not contain a CMS.

NOTE: The information contained here relates to lots in an already registered body corporate. If you are buying a lot in an unregistered body corporate, ie off-the-plan, please review disclosure requirements here.