Property guidance by Quay Law
Property guidance by Quay Law
Unit title guidance from Quay Law
Ian Mellett, Barrister and Solicitor, Quay Law
The pre settlement disclosure statement is the final piece of disclosure in a unit title sale. It confirms the body corporate position shortly before settlement, and together with the settlement statement, it determines how levies are shared between seller and buyer.
The seller must provide the pre settlement disclosure statement no later than five working days before settlement. Because the statement is accompanied by the required body corporate certificate, the request should be made well before that date, as body corporate managers may need time to respond.
Late or inaccurate pre settlement disclosure can entitle the buyer to delay settlement, which can have consequences for the seller’s own onward purchase or plans.
The pre settlement disclosure statement confirms matters such as:
The buyer’s lawyer will compare it with the pre contract statement and raise any differences.
Body corporate levies are usually apportioned between seller and buyer as at the settlement date, in the same way as council rates. If the seller has paid levies for a period extending beyond settlement, the buyer typically reimburses the seller for that portion. If levies are owing for the seller’s period of ownership, they are deducted from the seller’s proceeds.
The apportionment appears on the settlement statement prepared by the seller’s lawyer and checked by the buyer’s lawyer.
Where a special levy is proposed or struck before settlement, the question of who bears it depends on the terms of the Agreement for Sale and Purchase. The standard form agreement contains provisions dealing with this, and a buyer who learns of a proposed special levy during due diligence may seek to negotiate. This is a matter on which both parties should take advice.
Money paid into body corporate funds belongs to the body corporate. When you sell, you do not receive a refund of your contributions to the long term maintenance fund or any other fund. Those funds remain available for the building, and that benefit passes with the unit to the buyer.
What sellers of unit title property must disclose under the Unit Titles Act 2010, who prepares and signs each statement, and common mistakes to avoid.
Since May 2023 buyers may delay settlement or cancel if unit title disclosure is late, incomplete or inaccurate. How the process works for buyers and sellers.
How body corporate levies are set in New Zealand, what the operating, maintenance and contingency funds are for, and how special levies work.
We manage pre settlement disclosure and settlement for unit title sellers, so that levies are correctly apportioned and settlement proceeds on time.
If you are buying or selling a unit title property in Auckland, we recommend speaking with us before you sign an agreement. Contact Ian Mellett at Quay Law, Barrister and Solicitor, by completing our enquiry form below, or call us on 09 523 2408.
The information on this page is provided for general information purposes only and is not legal advice. Every transaction is different, and all matters should be discussed with the team at Quay Law.