Body Corporate - Out, Owners Corporation - In

From 1 January 2008, there are changes big and small for body corporates in Victoria.

1. Body Corporates will be renamed Owners Corporation.
   
2. Every Section 32 Vendors Statement must contain a Section 151 Owners Corporation Certificate, being the old Form 3. It will not just be an option. It is mandatory. It will be a combination of the old Form 3 and the Minutes of the last Annual General Meeting.
   
3. The Section 151 Owners Corporation Certificate will cost $150, up from $55
   

Obviously there will be many other changes, but the above will be reflected in the conveyancing process.

The upside for consumers, is the much needed transparancy when buying a flat, unit or apartment. Currently or before, it was a dogs breakfast regime in terms of disclosure of body corporate information.

The downside for the consumer is the increased costs ($55 vs $150) and double this if both parties indepedently obtain a copy of the s151 Certificate.

The other downside is the vendor cannot provide a vendor disclosure statement in a hurry. The Owners Corporation Manager can keep you waiting for up to 2 weeks being the mandated time they must produce the certificate. Take into account time lost for ordering and postage, it could be 3 weeks. The government should look at reducing the turnaround time to 5 business days.

Agents beware. If a vendor engages you to sell his flat or apartment, instructions to prepare sales documentation must be done then and there. Lawyers can no longer turn out vendor statements with minimum supporting documentation as has been done in the past. The practice of vendors waiting for a firm offer from a buyer before instructing a lawyer is now fraught with the danger of losing the buyer altogether. Ipso facto, you can potentially be giving the buyer a 17 day cooling off period, being the sum of the 3 day cooling off and 14 days waiting for a section 151 owners corporation certificate.

Its one step forward and two steps back.

Section 151 Owners Corporations Act 2006

Division 3-Owners Corporation Certificate
151. Owners corporation certificate

(1) Any person may apply to the owners corporation for an owners corporation certificate.

(2) The application must be in writing and must be accompanied by the prescribed fee.

Note: The Electronic Transactions (Victoria) Act 2000 - enables this application to be made electronically.

(3) The owners corporation must issue an owners corporation certificate within 10 business days after it receives an application and fee under this section.

(4) An owners corporation certificate must

(a) contain the prescribed information relating to the owners corporation and a lot which must include the prescribed information relating to­

(i) fees payable in respect of the lot;
(ii) fees and charges that are imposed or proposed to be imposed on the lot;
(iii) fees and other money owing in respect of the lot;
(iv) insurance;
(v) repairs and maintenance;
(vi) the funds held by the owners corporation;
(vii) liabilities and contingent liabilities of the owners corporation including any liabilities or contingent liabilities arising from legal proceedings;
(viii) contracts, leases, licences and agreements affecting the common property;
(ix) services provided to lot owners and occupiers and the public;
(x) notices and orders served on the owners corporation;
(xi) legal proceedings to which the owners corporation is a party;
(xii) the manager;
(xiii) any appointment of an administrator; and

(b) be accompanied by­
(i) a copy of the rules, or, if the rules have been amended the consolidated rules of the owners corporation as recorded on the Register; and
(ii) a statement in the prescribed form providing advice and information to prospective purchasers and lot owners; and
(iii) a copy of all resolutions made at the last annual general meeting of the owners corporation; and
(iv) any other documents of a prescribed kind; and
(v) a statement advising that further information on prescribed matters can be obtained by inspection of the owners corporation register.

PART 15—AMENDMENT OF SALE OF LAND ACT 1962

219. Section 32 certificate

(1) Section 32(2)(h) of the Sale of Land Act 1962 is repealed.
(2) After section 32(3) of the Sale of Land Act 1962 insert—

"(3A) If the land is affected by an owners corporation within the meaning of the Owners Corporations Act 2006, the vendor must attach to the statement required by subsection
(1)(a) and to the contract—
(a) a copy of the current owners corporation certificate issued in respect of the land under the Owners Corporations Act 2006; and
(b) a copy of the documents required to accompany the owners corporation certificate under section 151(4)(b) of the Owners Corporations Act 2006.".

146. Availability of records

(1) The owners corporation, on request by a lot owner, a mortgagee of a lot, a purchaser of a lot or the representative of a lot owner or mortgagee or purchaser of a lot, must make the records of the owners corporation required to be kept under this
Division available to that person for inspection at any reasonable time, free of charge.
(2) The owners corporation may at the request of a person entitled to inspect the records and on payment of a reasonable fee provide a copy of any record of the owners corporation.

2-lot subdivisions

s.7 deals with 2 lot subdivisions and make certain exemptions for compliance under the Act. The anomoly is that even tho' you dont have to have insurance, you dont have to keep records &c. but when selling you must still provide a S.151 Certificate. Go figure.