NEW DISCLOSURE REQUIREMENTS FOR NSW SALES

and

WHAT QLD BODY CORPORATE RECORDS CAN BE ACCESSED

 

  1. New Disclosure Requirements for NSW Sales

 

Real Estate agents in NSW should be aware of a recent change to the Property and Stock Agents Regulation 2014 in relation to agents’ material facts disclosure obligations.

 

From 1 September 2021, agents must disclose any order that is in force under the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (the RAB) to prospective purchasers.

 

These orders can include a:

  • Building work rectification order – requiring the developer or builder to carry out or refrain from carrying out building work to eliminate, minimise or remediate serious defects or potential serious defects, or
  • Prohibition order – prohibiting the issuing of an occupation certificate for the apartment building, or its registration as a strata plan. The Building Commissioner may make such an order when:
  1. an expected completion notice was not given or was given less than 6 months before the application for the occupation certificate was made;
  2. an expected completion amendment notice was not given or was given less than 6 months before the application for the occupation certificate was made;
  3. a serious defect in the building exists;
  4. a building bond has not been given.
  • Stop work order – to ensure building work stops due to the likelihood of significant harm or loss to the public or occupiers, or significant damage to property.

Agents who are aware of a material fact set by the regulations, or ought to reasonably know, and fail to inform prospective purchasers (whether intended or not), face a maximum penalty of $22,000.

 

NSW Fair Trading is introducing these changes to restore confidence in the residential construction industry and to make sure that apartments being built are trustworthy. The Department will continue its compliance and enforcement role to ensure real estate agents are meeting their disclosure obligations to buyers. This will include targeted audits of agents who are selling properties where RAB orders have been issued.

 

  1. Qld Body Corporate Records that may be Accessed

 

What constitutes a “record of a body corporate” is much broader than the compulsory list of documents set out in the Queensland regulation modules, and has ramifications for the duties of a body corporate and the breadth of access allowed to an owner or prospective purchaser.

 

The Three categories

 

Consistent with the approach of department adjudicators, the Queensland body corporate legislation in effect creates three categories of records:

  1. records that must be kept;
  2. records that should be kept;
  3. records that are

 

‘Records’ are defined to include the rolls, registers and other documents kept by the body corporate under the Body Corporate and Community Management Act (Qld) 1997 and applicable regulation module. They include paper and electronic documents.

 

What records must be kept?

 

The body corporate regulation modules set out a long list of documents that a body corporate must keep, with varying requirements about the length of time each document must be kept.

 

Examples of these documents are:

  • accounting records for each financial year;
  • insurance policies;
  • orders made against or in relation to the scheme or body corporate;
  • correspondence received and sent by the body corporate;
  • minutes of committee and general meetings.

 

These are however, not the only documents that form part of the records of a body corporate.

 

What records should be kept?

 

A body corporate has a statutory duty to act reasonably in anything it does in carrying out its function given to it under the body corporate legislation and community management statement.

 

Acting reasonably, a body corporate would be required to keep:

  • additional maintenance records;
  • records relating to its obligations under workplace health and safety and fire safety legislation;
  • any other document retained by the body corporate for the purpose of discharging its functions.

 

If records are not kept that are records that a body corporate, acting reasonably, should have kept, then a department adjudicator may find that the body corporate has not acted reasonably in responding to an owner or prospective purchaser’s request to access records.

 

Records that are kept

 

There are often records that are kept by a body corporate that are beyond the scope of records required to be kept under the body corporate legislation.

 

These records also form part of the records of a body corporate and an owner or prospective purchaser may be allowed to access these records.

 

However, there are ways that a body corporate may withhold access to records under certain circumstances, and if a body corporate is unsure as to what documents constitute body corporate records or how to withhold access its records, it should seek assistance before or during the seven day turnaround time for record requests.

 

Article Written by Col Myers of Small Myers Hughes Lawyers

 

 

Liability limited by a scheme approved under Professional Standards Legislation

Disclaimer – This article is provided for information purposes only and should not be regarded as legal advice.